Is it the end, the beginning of the end, or just the end of the beginning?

One of the classes I never thought I'd take but was really glad I did in undergrad was Nuclear Engineering 100. I knew it was going to be a good class right away when the professor said on day 1: "I can't promise anything, but I try to blow up at least one thing during every class period." The thing I learned that was most interesting to me at the time was how to make a still (sadly, I have never put this knowledge into practice). I also got to do a presentation on how rockets work, a topic I picked for the sole reason that I wanted to use the headline "This IS Rocket Science". However, the most interesting thing I learned that has stuck with me was an analysis of the different forms of energy production and some speculation on what the near and long term future might look like. Among the things I learned: nuclear power plants aren't nearly as dangerous as they are perceived (not surprising coming from a class called Nuclear Engineering), solar power is good on a micro level but is unlikely to ever make up more than a minor portion of our power needs, coal is just about the worst possible way to generate power, and finally that the end of the oil age was coming a lot sooner than most people expected.

I remember very clearly the day we discussed oil, because I was completely taken aback by the figure presented to me. According to the latest estimates, at present consumption levels it was projected that there was approximately 60 years left of oil in the world. This included ~40 years from sources that we knew about, and a best guess of another 20 that were either undiscovered or to this point impossible to drill for (i.e. underneath the ocean floor). This was in the spring of 2000 that I was told this, and I just remember thinking "wow; we're talking about 2060 here. If I just slightly beat the national average lifespan we're talking about my lifetime here." But that was 8 years ago; a veritable eternity in terms of scientific progress. In addition, that was based on 2000 consumption levels, and with China and India on the rise that has increased markedly since then. So, I figured that this would be a good time to revisit this. Just how much oil is left in the world?

Well, to the surprise of probably no one, the answer is that no one really knows. I have tried to track down some hard numbers but all you really ever get from anyone is a range. So, I will go ahead and do what I was trying to avoid: use wikipedia for some quick, back-of-the-envelope type calcs. For the record, though, the other sources I consulted (which included American Theocracy by Kevin Phillips, Collapse by Jared Diamond, and The Weather Makers by Tim Flannery) also pretty much support the numbers in wikipedia.

Essentially, there are 2 problems that make calculating a hard number difficult and they have to do with the concept of "peak" oil and the rate of discovery. A good definition of the "peak" concept comes from American Theocracy: "Geologists define it as the point at which at least half of the field's reachable oil has been extracted. After this stage, getting each barrel out requires more pressure, more expense, or both. After a while . . . more energy is required to find and extract a barrel of oil than the barrel itself contains. By then, production becomes uneconomic - at least until the price of oil rises or the cost of extraction drops." This explanation is used to describe one particular oil field but can be expanded to discuss all oil in aggregate. Over the years, there have been numerous attempts to try and calculate the point when the world will hit "peak" oil production, and of course all of them have been wrong so far. A big part of the problem is that many of the world's largest oil fields are government-owned, and by and large these governments do not have an open-book philosophy on the data from these fields. As a consequence, we're left to largely speculate. Pessimistic projections say that oil may have already peaked or will in the next couple years, and very optimistic projections say it won't peak until 2050. The year 2030 is probably cited the most often and I imagine it is not just coincidental that it is around the mid-point of the divergent opinions. Obviously, the difference between oil peaking next year versus oil peaking over 40 years from now has tremendous implications on how urgent the situation is.

The other issue that is very speculative and causes significant variance in the overall oil supply number is the discovery rate. As the name implies, this is the measure for how often either previously unknown sites are discovered or where previously unextractable oil becomes feasible. Here again, depending on what you project the discovery rate to be has huge implications on the ultimate oil supply number.

So, with all this uncertainty, what's the bottom line? Basically, we get a huge range: between 2 and 3 trillion barrels of oil. The 2 trillion number represents the average finding of major oil surveys done since 1960. The 3 trillion estimate comes from a 2000 USGS survey. I would classify the 2 trillion estimate as generally realistic with a tinge of pessimism while the 3 trillion estimate is more on the side of wild optimism. This is because the worldwide discovery rate has been steadily falling since 1960 and the 3 trillion estimate counts on the discovery rate to suddenly and dramatically reverse itself. That seems unlikely, but of course that doesn't mean it won't happen. It should be noted, however, that the trend of falling discovery rates has continued in the 8 years since the USGS released their report.

So, if we agree that the actual amount of oil in the world lies between those two numbers, what does that mean in terms of years of oil left? Here again, we will have to make some assumptions about projected future use, but at least we have solid data on the current usage. Right now, world oil consumption from 2007 was just over 85 million barrels of oil per day. That translates into just over 31 billion barrels per year (these figures come from the US Energy Information Administration: http://www.eia.doe.gov/steo). If we apply just the current consumption to our range of estimates that works out to about 65 years (for 2 trillion barrels) and 97 years (for 3 trillion barrels). However, that figure is not very realistic since oil consumption has risen markedly from a little over 27 billion barrels per year in 2000 to the current 31 billion. That's almost a 15% increase in just 8 years. The EIA further projects global oil usage to rise by 1.2 million barrels per day in both 2008 and 2009, leading to annual global oil usage of over 32 billion by the end of 2009. Obviously the farther we get out from here, the fuzzier the numbers get. Just for the sake of simple math, lets assume that we rise to the level of 35 billion barrels per year and then level off (this seems likely to be a vast underestimate given the recent growth of China and India that shows no signs of abating soon). This gives us projections of 57 and 85 years, respectively.

So; all in all I'd have to say that the estimate of 60 years given to me back in Nuc E 100 seems to be just about right. Even though there is obviously all sorts of assumptions being made in the above calculations, there is one truth that is inescapably clear: the age of oil is ending, and faster than most people realize. Of course, I don't really think we will physically run out of oil. I have tried to phrase this analysis in isolation of the problem of climate change, but of course in reality they are inexorably linked. We cannot burn another 2 trillion barrels of oil over the next 60 years without disastrous environmental consequences. That is why it was nice to see McCain talk about attacking climate change earlier this week. The Democrats countered (with some justification) that it is just empty rhetoric, but given that even the rhetoric has been sorely lacking from the right even empty rhetoric still represents progress.

In summary, I hope if nothing else this clarifies my statement that I believe gas at $10/gallon would be a good thing. Both the climate change and oil problems can be likened to riding on a train that is heading for a ravine where the bridge is out. Maybe the ravine is still hundreds of miles away, but it is inescapable that if we continue on the present course we are assuring our destruction. In that context, I am in favor of anything that moves us towards stopping the train as quickly as possible. All other considerations (economic and political) are important but decidedly secondary.