As I write this, oil prices have popped up over $100 again and I am staring at what are nearly $5 a gallon gas prices in lovely Southern California. I am told oil depletion is to blame. In truth, we will never run out of oil.
Prices
Oil prices are bouncing through the $100 mark again, much to my chagrin. This is translating in many ways to all of us whether it be at the pump or elsewhere. The question is why is this happening? Some of it is the war in Libya. Sorry, non-war. Some of it is speculation as investors look for something other than the fading dollar. What seems to be clear is this time it is not about oil supply. The supplies held by countries are actually showing rather large surpluses. So, should you dismiss supply arguments overall? No.
Peak Oil
You might think this is an article pounding on those who believe in peak oil. You would be wrong. I actually am one of those believers, although I must admit "believers" sounds rather cultish. Regardless, I do believe we are seeing a peak in world wide oil production. This does not mean that we are running out of oil. It simply means there will be less of it moving forward. This will cause price spikes, probably wars and general bad things until we convert to something else.
Run Out?
This begs a question, however. Will we ever run out of oil? I think not. Oh, perhaps in a million years or so, but not in our lifetimes by a long stretch. How can I say this if I believe in the concept of peak oil? It is simple. Peak oil does not suggest we are running out of the stuff, only that we will be able to produce less of it moving forward.
Perhaps a better way to say it is we are running out of easy oil. Oil in its liquid form is lighter than water. This mean is literally will float up to the surface of the ground in some areas where it is plentiful, such as in Nigeria. This form of oil is easy to produce because you simply cap it and send it down to refineries or ships for transport. It is also easy to produce a lot of it at once. I'm obviously oversimplifying, but this is the basic idea. Unfortunately, this is the oil we have peaked in and are seeing production rates drop for dramatically.
Other Sources
Fortunately, there are other sources of oil. The tar sands of Canada are an example. There is a huge amount of oil there, but it is in the form of muck. It is not easy to produce. It is also very difficult to produce a lot of it at once because there are massive amounts of water needed as well as processing and the like. We will be able to produce oil from it for a long time, but it will cost a lot more to produce. More importantly, there are real question about how much we can produce a day given the water and technical needs. This is true for shale and other sources as well.
Will we every run out of oil? Perhaps in the far distant future, but not in our lifetimes. That doesn't mean that we won't be paying a lot more for the unconventional sources we will need to tap to make up for the loss of easy crude as we move forward.
Patrick Sampson writes about peak oil for ThePeakOilQuestion.com
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