World Energy (vol. 8 no. 1) carries a series of articles by the Chief Executives of the major oil companies. They stress the importance of oil companies in providing the essential fuels and raw materials for the modern world; their technological excellence; their deep concern for the environment; and their deep sense of responsibility. Yet they do speak of the magnitude of the challenge they face in meeting anticipated demand, rejecting any sense of fatalism. They try valiantly to convey a positive attitude as befits their position, but their tone lacks conviction.

The words of one of them are particularly telling. He opens by extolling the profit motive and ends by stating that he finds it exciting to try to make possible what seems impossible, adding that his first task is to “tell the truth” – the choice of the word task carrying the implication that it is not always easy to do so. In between, he makes the misleading statement that “There is no shortage of resources. From Proven Reserves alone, current levels of world demand can be met for at least 40 years in the case of oil, and at least 65 years in the case of natural gas”. While it is true that reported oil reserves stand at about forty times annual production, it is absurd to imply that production can stay constant from 40 years and then stop dead, when all oilfields are subject to decline during the latter part of their lives. Admittedly, doing the impossible is one of his stated strengths.

The executives could have been more forthright, revealing, for example, just how much their companies have actually found in recent years, which by extrapolation could indicate what they can expect to find and produce in the future. Their own production is faltering as they pass their individual peaks. Given that they have indeed been deploying the highest level of technological excellence which has enabled them to successfully produce oil in extremely deep water and map with great accuracy the smallest and most subtle geological prospects, it follows that they are already at the cutting edge, such that little more can be expected from still further technological progress. There is an irony about depleting a finite resource : the better you do the job; the sooner it ends.

(Reference furnished by Walter Younquist)

This is a plain text article extracted from Dr Colin Campbell’s ASPO Newlsetter 54 (June 2005). Any images, graphs and other non-text components are not shown here. To view this article in its full context and with non-text components, please download the PDF version of the full newsletter. You should look for article #553. PDF versions of all newsletters can be found in the newsletter downloads section.