by John D. "Jack" Edwards
05-12-05
High fuel prices are highlighting an inescapable truth: a sustainable future
world energy supply is a must. If we plan ahead and begin making changes now, we
can avert a looming energy supply crisis some analysts believe could occur as
early as 2010.
It's been 20 years since the last giant oil field was discovered, and today most
oil companies are enjoying record profits without making big investments in
exploration and development of new resources. To meet projected world energy
demand by 2030, the industry would need to invest more than $ 100 bn annually in
exploration and infrastructure, according to some estimates.
Some experts believe as many as 2 tn barrels of oil could be produced from
oil shale deposits in Colorado, Utah and Wyoming -- possibly more than exists in
the Middle East. Investments in deposits in western US oil shales, Canadian tar
sands and Venezuelan heavy oil already have begun.
Demand is outstripping supply in all aspects of the energy industry. Fossil
fuels -- oil, coal and natural gas -- supply 85 % of global energy. Oil, the
single largest fuel used today, provides 40 % of the world's energy demand.
Oil drilling costs have increased in recent years, and nearly all the world's
usable drilling rigs are in use. Worldwide, there is not enough infrastructure
to produce, transport and deliver more crude. The US capacity to refine crude
oil was stretched to its limit before this year's damaging hurricanes, and is
now even more strained. That reduced refining capacity adds to the cost of oil
and to the cost of getting gasoline to consumers.
Exploration for and production of domestic crude oil are decreasing, but foreign
competition for energy is on the rise. The US consumes 25 % of the world's total
oil production, and China will soon consume more oil per capita.
International oil prices are affected by future oil demand, particularly for
light crude oil, which is easier to refine. Demand for oil is increasing as
populations and developing economies expand. China's economy is growing at a
rate of 9 %, India's at 6 % and the United States' at 4 %.
Taxes on crude oil and gasoline also put economic pressure on the price of oil,
which is compounded by the declining purchasing power of the dollar and economic
uncertainty bred by the Iraq War.
When oil supplies do begin to decline, a global energy supply gap could lead
to an energy crisis unless people begin to prepare now. When peak global oil
production is reached, the price of oil will rise as energy demand continues to
grow. People will be forced to use less fuel and to use it more efficiently.
In 1956, M. King Hubbert, a Shell Oil research geologist, predicted US domestic
oil production would peak in 1970 and then decline. He was right. Today,
pessimists predict world oil production will peak by 2010. Optimists, including
myself, cite unconventional Canadian tar sands, western US shale oil and
Venezuelan heavy oil as providing extra resources that will extend the peak of
world oil production to 2030 or 2040. After that, it is inevitable that oil
production will decline.
I believe world oil production will peak between 2020 and 2040, and the
United States' only way out of this fossil fuel "bear trap" is to encourage
increased use of sustainable, alternative less-polluting fuels. These fuels, in
order of economic viability, include: hydrogen fuel cells, nuclear, wind, coal
bed methane, solar, biomass, geothermal and hydroelectric.
Development of economically attractive alternatives to gasoline continues,
although alternatives still comprise less than 15 % of the world's energy
supply. Spurred by necessity, production and marketing of convenient,
competitively priced, renewable energy will become profitable during the next
several decades.
Government and industry must expand efforts now to accelerate the transition
from fossil fuels to renewable, less-polluting energy sources. More tax breaks
from the government would encourage the transition by improving the economicsof
alternative energy sources. Reducing atmospheric pollution, a major
international concern, is an added incentive for limiting fossil fuel use and
quickening the pace of change to renewable energy sources.
Continuous technology improvements, cost reductions, increases in efficiency of
energy production and use -- along with energy conservation -- will enable
renewable, less-polluting sources to dominate energy supplies in the next
century.
But we must act now.
Source: www.denverpost.com