How Technology Lets Us Push Back The Day We Run Out Of Oil

from the peak-what? dept

In recent years, a confluence of factors including environmental concerns, geopolitical issues and worries about the scarcity of oil have led to record investments in green technologies as well as ethanol, whose green credentials are up for some debate. But all the same factors have also prompted fresh investment into the traditional energy industry as well. Paul Kedrosky points to a great article in the New York Times exploring the way the oil industry has greatly increased production levels at aging oil fields. The results are rather dramatic. Using new imaging technology and other engineering techniques, fields that had been good for just 10,000 barrels per day a few decades ago are now yielding over 80,000. And it's not just a matter of sucking oil out of the ground at a faster rate; companies actually have access to more total oil than they thought they could get out of these fields. It's important to keep these things in mind whenever people talk about things like Peak Oil or other neo-Malthusian theories of resource depletion. Typically, they all fall into a common trap. They look at the supply of a certain resource (Malthus, of course, originally talked about food production), and then calculate how much longer we'll have it based on an estimate of future demand. But the consistent mistake is in holding supply constant. As demand (and price) grow, technology often allows for the creation of more supply, even for a "non-renewable" resource like oil.
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  1. identicon
    Brian Carnell, 6 Mar 2007 @ 7:46am

    Oil Is a Funny Thing

    It's amusing to see the "we're ruining the world by burning fossil fuels" appearing in the same time frame as the "OMG, we're almost out of fossil fuels" stories.

    One thing the peak oilers hit on is low discovery of new oil, but of course there hasn't been much of a reason until very recently to go out and spend lots of money on discovering new oil or recovering additional oil from existing fields, given the low prices of oil that started to prevail early 1980s.

    Just look at the inflation-adjusted prices of oil starting in 1980 here: http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_Table.asp

    If it hadn't been for the somewhat surprising economic growth in China and political instability in a large number of oil producing countries, oil prices would probably still be around the $20-$25 inflation adjusted mark.

    The high oil prices we're seeing now will both a) encourage further exploration and reclamation efforts and b) further drive efforts to find cheaper oil substitutes.

    But I suspect Pete is close to the mark -- new oil discoveries/reclamation efforts will drive down the price of oil again in a few years and the issue will be the effects of the massive CO2 byproduct from all of this cheap oil.

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