Author: U.S. faces a reality check over oil
Gasoline at $2 a gallon may be just a pleasant memory in a few years as energy prices continue to surge, warns author Paul Roberts.
"There's still plenty of oil, but it's getting harder to find and it's not going to be the cheap oil we're accustomed to," said Roberts, author of "The End of Oil: On the Edge of a Perilous New World," which hit bookstores last month.
Roberts, along with other analysts and energy producers, will address supply, demand and pricing issues during events in Colorado this month.
U.S. crude oil consumption is currently 20 million barrels a day, which is roughly one-quarter of the world's daily production, according to the U.S. Energy Information Administration.
The U.S. imports slightly more than half its oil, with Saudi Arabia, Mexico, Canada, Venezuela and Nigeria the top five suppliers.
Domestic U.S. oil production peaked in the early 1970s and has fallen eight of the past 10 years, according to the Independent Petroleum Association of America (IPAA) in Washington, D.C.
At an IPAA conference this week in Colorado Springs, one conference session is titled, "Is the U.S. Running Out of Oil?"
The answer is "yes," said Roberts, who is based in Leavenworth, Wash. "Oil depletion is arguably the most serious crisis ever to face industrial society."
Roberts estimated that global oil production will peak within 30 years and then decline. Roberts said non-OPEC production - preferred by the U.S. because it is more politically secure - could peak by 2015. Meanwhile, the booming economies of China and India - and other industrialized countries - are competing with U.S. demand.
North America has large reserves of oil sands and oil shale, which are sources of petroleum that require special technologies for recovery. Suncor, a Canadian oil company that owns a refinery in Commerce City, claims that by 2010 it will produce 500,000 barrels a day from oil sands. That would be equal to about one-third of the average daily imports from Saudi Arabia.
Conventional oil fields in the U.S., however, are becoming harder to exploit.
"We've found a lot of the oil and gas fields already with our existing technology," said Kentucky oil and gas producer and IPAA board member Bill Daugherty of Daugherty Resources. "The new fields, by and large, are not as productive."
Drilling for natural gas is at a three-year high nationally, but U.S. production has been flat over the past several years.
"We are working harder and harder just to keep production levels constant," said Joseph Blount, chairman of the Washington-based Natural Gas Supply Association. "There is little short-term relief ahead for customers."
Not all traditional oil reserves face the same rates of decline. Non-OPEC oil, chiefly from the U.S., North Sea, Russia and Mexico, may tap out sooner than OPEC sources because the non-OPEC fields generally are smaller and have been exploited for longer periods, according to Roberts.
Roberts is an advocate of quicker development of alternatives to oil and natural gas, including hydrogen, wind and solar, coal gasification, and possibly more nuclear power.
Conventional energy producers say alternative and renewable energy sources are costly and less reliable than fossil fuels.
But Roberts said the fossil-fuel industry is not taking into account the eventual economic costs of carbon emissions and global warming from burning oil, gas and coal.
Staff writer Steve Raabe can be reached at 303-820-1948 or at [email protected] .
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