Facts and information about the world's oil supply,
Fifty-four years after it was first released, Bob Dylan's song "The Times They Are a-Changin'" is relevant to the conditions that exist in today's world. Skyrocketing energy demands, global warming, and rapidly diminishing oil supplies were unknown or of little concern in 1964. But today these issues are of primary importance to our country because we must do something now, we can't wait! The times truly are "a-changin".
the present worldwide economic and political turmoil is the current
focus of attention, history has shown it will pass. And when it
does, oil will once again be our main concern. The world produced a record 100.3 million barrels
of oil and petroleum liquids per day in the third quarter of 2018,
an increase of 2.3 million barrels from a year ago and up 1.3
million barrels per day from the second quarter, the International
Energy Agency reported. Non-OPEC oil production is expected to
surge by another 1.7 million barrels per day in 2019. Right
now, due to the oil shale boom, the U.S. is producing more oil
than it has for many decades. As a result, oil prices have declined
from over $100.00 a barrel at the beginning of 2014 to a low of
$39.00 in September 2015. Likewise, gasoline prices during this
period have dropped from around $4.00 a gallon to less than $2.00
in some states! However, today oil is trading in the range of
$75.00 to $80.00 a barrel, and gasoline is approaching $4,00 a
gallon in some states. But, this will not last because oil shale
wells have a short life. The depletion rate is very high in these
wells (you are literally squeezing oil from a rock). Depletion
can be on the order of 80 to 90 percent over a couple of years.
So you have to constantly keep drilling new wells to meet the
production quota. And, like other fossil fuel sources, the oil
shale resource is limited. Experts estimate that the reserves
of shale oil will start declining in as little as seven (7) years!
I started this page in 2004 to stress the need for America to take advantage of our ability to supply our energy needs without importing oil. In spite of all the many alternatives available to us, we still depend on crude oil to fuel our economy.
With respect to alternative energy, we are only slightly better than we were when I started this page.
The fluctuating price reflects day-to-day events, but the long-term trend is up, up, and away. Crude oil is the blood of our economy, but it is a limited resource and unless we start replacing it with oil products from other sources such as algae, biomass, coal, oil shale, tar sands, etc. we are in for catastrophic consequences! Algae, biomass, and similar sources are renewable and permanent, while coal, oil shale, and tar sands will eventually be depleted.
This website has been created as a public service to make you aware of oil's future, and how it will impact your life and the lives of our children and their children. If you don't believe the "official" excuses for the previous upward trend of oil prices and its effect on our economy, the stock market, and related issues, read on to discover the real reasons. You will be rewarded with a wealth of knowledge and viewpoints. All of the information presented here is free, publicly available on the internet, and you are encouraged to click the links, read the info, and draw your own conclusions. For your convenience, links are presented where appropriate or at the end of each section. These links will open in a new window so you can return here, when you're ready, by closing that window. (TIP: Bookmark interesting links so that you can easily return to them later.)
Although global warming should be on our list of priorities, global warming falls well below other problems. At the top of the list is our dependence on petroleum that has caused immense social, political and economic impacts on our nation. If we start immediately replacing it with technologically available domestic sources, and then target eventual replacement of fossil fuels with renewable, sustainable substitutes, we can solve all the problems including global warming.
When faced with adversity, one of the strengths of America is our freedom and ability to unite as a people, taking action as needed to guarantee that freedom. It is hoped that this website will generate enough interest for people to think, talk to each other, and take action to change the future.
Thanks, in advance, for taking the time to read this information. If you find it helpful, please tell others about it, and send this page to at least 10 people - Click here to send Email. You can also send a letter to your representatives in Congress and the Senate, requesting their support for alternative energy solutions.
OK, what's the top problem?
Oil is the problem. Oil is a finite resource. Although recent news articles have predicted that new methods of oil and gas drilling (fracking) will produce huge quantities of oil, the Massachusetts Institute of Technology (MIT) published a report indicating that hydraulic fracturing to recover the oil in shale will boost U.S. production, but it won't bring energy independence. The MIT report further predicts that, at present rates of consumption, the reserves of shale oil will begin to diminish in as little as seven (7) years! Using new drilling techniques (fracking), the United States overtook Russia as the top producer of natural gas and surged past Saudi Arabia as the world's biggest oil producer. Some companies, however, worry that an Environmental Protection Agency (EPA) study on fracking could lead to added regulations that will crimp America's energy bounty. Currently, fracking is largely regulated by states, rather than the federal government.
Well, even though it's expensive, we won't run out of oil.... right?
Think of it this way. Imagine an enormous tank, big enough to hold all the oil in the world. It took millions of years for nature to fill that tank, and nature has almost stopped making oil. So whatever is in that tank is all we've got. Each year, we keep pumping more and more oil out of that tank, and eventually it will all be gone.
Yeah, but we've got hundreds of years left, right?
Wrong. Experts can't agree on how much oil is left in the tank. It all depends on their estimates of how much oil has been found, how much oil is "undiscovered", and how much can ultimately be recovered. But all the estimates indicate that the tank is about half empty, and that we will run out of recoverable reserves before the end of this century! "Peak Oil", once considered a novel theory, has now gained widespread acceptance. There is ample evidence from the Energy Information Administration that we have already reached the peak of world oil production, and demand will rapidly exceed supply in the near future!
In 2008, the world was consuming oil at a rate of 31.4 billion barrels per year, but total world oil production was only 30.8 billion barrels per year. In 2014 the world was consuming oil at the rate of 32.6 billion barrels per year, and total world oil production had increased to 32.9 billion barrels per year. With production outpacing consumption, you would expect the price of oil to decline according to the laws of supply and demand. In 2008 the price of crude oil was $96 per barrel. In spite of the increased production, by January 2014 it was selling for $105 - $107 per barrel. Based on the forecasts above, the "Pessimists" believe we will exhaust our reserves in 50 to 60 years, the "Probable" estimate is 80 years, and the "Optimistic" forecast is about 100 years. After world oil production peaks, it will decline rapidly as recovery becomes more difficult. By the end of this century, world oil production will be about equal to what it was in the years 1940 to 1950. If you want to check this out for yourself, you can read an assortment of articles by petroleum geologists, the Department of Energy, and other experts. Just click here for World Oil Predictions. To read about the profound effects of peak oil, see "The Oil Crash and You".
What about conservation, electric cars, and such?
These measures will definitely help to delay the depletion of the world's oil, but the optimistic forecast (above) includes savings from these initiatives. Currently, about 70% of the petroleum we consume is used for transportation. Light duty vehicles and freight trucks take the largest share while aircraft take less. However, from the standpoint of fuel efficiency, aircraft are the least efficient while light duty vehicles are the most efficient. Projections by the Energy Information Administration (Dept. of Energy) to the year 2035 show overall fuel consumption increasing by almost 7 million barrels per day with only slight changes in the distribution of use.
So, what does this mean?
It means that electric cars and hybrids will have a significant effect on petroleum consumption. All-electric vehicles powered by rechargeable batteries will help most to reduce oil consumption, because only 2% of our electricity is generated from oil. Electric cars are in production and are available for purchase. Though there may be some technology improvements in diesel-powered freight trucks, it is unlikely that we will see them powered by electric motors. Unless some huge improvements are made in aircraft power plants, they will continue to consume a large share of petroleum (2 million barrels per day) in the future. The Energy Information Administration is a good source of data in this area, especially their Petroleum Quick Stats. Their Energy Statistics is a particularly useful reference for all energy sources.
Where does our oil come from? Don't we have a lot of oil production in this country?
Yes, we are currently producing a lot of oil, but more than half of our known oil reserves are gone. Estimates in 2016 of U.S. crude oil proved reserves, as cited in the U.S. National Energy Policy, amount to 32.8 billion barrels including reserves in the Arctic Outer Continental Shelf, the Alaska National Petroleum Reserve, the Arctic National Wildlife Refuge, and the restricted areas of the Lower 48 States. At our present rate of production, these reserves would supply our needs for a little over 8 years! The U.S. is a good example of what is going to happen to the rest of the world.
Not only is the U.S. exhausting its reserves with increased production of crude oil, but the following graph shows that the world's liquid fuel supply is also dwindling rapidly. This Energy Information Administration projection shows that total world supply will drop from 86 million barrels per day (BPD) in 2012 to 43 million BPD in 2030. During the exact same period, world total consumption is projected to increase from 88 million BPD to 106 million BPD. The deficit in production will have to be met by (as yet unidentified) projects such as biofuels and synthetic fuels.
Nearly everything we use in our daily lives depends on oil in one form or another, from plastics to transportation fuels, clothing (synthetics), home heating oil, food production and delivery, and so on. The economic effects on our stock market would be equally as disastrous plunging the nation into a severe depression. The price of crude oil has a very significant impact on the stock market. An example is shown in the chart below. Steep increases in crude oil price correlate with a slowdown in the advance of the Dow Jones Industrial Average (DJIA). This five year comparison illustrates that during periods of small changes in crude oil price ($5 - $7 per barrel), the DJIA grew steadily (June 2002 to October 2003 and October 2005 to June 2007). However, during the two years from October 2003 to October 2005 oil prices rose from $30 per barrel to $63 per barrel, and the DJIA stagnated around an average of 10,100.
OK, I see the problem, it looks pretty grim.........
It doesn't have to be, there is a solution, and it would create thousands....maybe millions....of new jobs right here at home. The solution is biofuels (see below) and synthetic or alternative fuels.
Really? Tell me about it!
The answer has been here all along. Back in the late 70's and early 80's we had a government sponsored synthetic fuels program. Because we have enormous resources of coal and oil shale, we developed or improved technologies for making petroleum products from coal, oil shale, and tar sands. A lot of the technology is fully developed. For example, the Canadians have been extracting petroleum from tar sands for many decades. During World War II the Germans made gasoline from coal, and today South Africa is producing oil products and gasoline from coal. Worldwide, the oil shale resource base is conservatively estimated to be 2.6 trillion barrels and is located in about 26 countries. This oil shale is not amenable to hydraulic fracturing (fracking) and the oil must be recovered by retorting. About 2 trillion barrels, including both eastern and western deposits, is located within the U.S. That's about 77% of the worldwide resource. At 13 million barrels/day (current total imports) it would last more than 500 years! If we only recovered 20% of the resource, it would still last 100 years! Many U.S. companies have prepared detailed plans for utilization of our vast oil shale deposits in Western Colorado and Utah. They even built facilities to develop and test their shale-oil processes, and from the start, the synthetic fuel industry was designed to be environmentally friendly with no adverse effects.
During his administration, Pennsylvania's Governor Ed Rendell announced that his administration had cleared the path for construction of the nation's first commercial plant that would convert waste coal into zero-sulfur diesel fuel and home-heating oil. Similarly, Montana has been pursuing development of coal-to-liquids technology as a means of converting their significant coal reserves into synthetic gasoline and other fuels. At 120 billion tons, Montana's coal is, in liquid terms, one quarter the size of the entire Middle East oil reserve, enough fuel to power every American car for decades. And that's just Montana...total U.S. coal reserves are much larger! Proposed synthetic oil production has been competitive with world crude oil for more than five years. An article in the Wall Street Journal published in 2006 confirmed that oil prices then (about $50-$60 per barrel) had made oil-from-coal economically attractive. Since then, oil prices have risen dramatically to more than $75 per barrel!
But, the most promising technology is biofuel, an alternative renewable diesel, gasoline, or jet fuel made from algae. Biofuels can be burned in existing engines without any major modifications....just substitute biofuels for petroleum-derived fuels when filling your tank. Although biodiesel can be made from almost any vegetable feedstock (soybean, rapeseed, mustard, jatropha, palm oil), the highest yield feedstock for biodiesel is algae, which can produce 250 times the amount of oil per acre as soybeans. A great deal of research and study has been done on creating algae farms in desert areas of the U.S. such as the Sonora desert in the southwest and the Salton Sea in California. Sapphire Energy is a California-based company that is aggressively pursuing its goal of replacing imported oil with biocrude from algae. They have successfully demonstrated their technology by producing gasoline, diesel, and jet fuel for full scale testing. LiveFuels Inc. located in Menlo Park, California, is a national alliance of labs and scientists dedicated to transforming algae into biocrude. To date, the company has established pilot operations across the U.S., generated extensive intellectual property and is well on its way to producing an economically feasible and sustainable algal fuel. Solix Biosystems, based in Fort Collins, CO, is developing a cost-effective photobioreactor to optimize algae growth and oil yield. Photobioreactors can be used for CO2 removal from power plants to reduce greenhouse gases. Aurora Biofuels has successfully operated a pilot plant since August of 2007 that has consistently produced ASTM quality biodiesel. Aurora has operated a pilot-scale algae cultivation facility in Karratha, Western Australia, since May 2011, successfully demonstrating production of up to 15 tonnes of dried algal biomass per month. A quick summary of the benefits of using algae for energy conservation, using inexpensive open ponds to grow the algae, can be found here. To learn more about widescale biodiesel production from algae, click here.
Today, in the United States, transportation consumes 69% of our total petroleum supply and 28% of our total energy requirements. Just two initiatives, biofuels from algae and gasoline from coal could satisfy all of our current transportation needs and make us energy independent. This solution is greenhouse gas neutral since the CO2 generated from coal-to-gasoline facilities could be used to grow the algae feedstock for biodiesel.
So, what happened? Why aren't we doing it!
Well, these synthetic fuel plants are very expensive! They cost billions of dollars to build and operate. The initial product oil price would be in the range of $60 to $80 per barrel, but could be as low as $40 to $50 per barrel as the technology matures. (Click here for current crude oil prices!) In 1980, when we faced a situation caused by huge imports of foreign oil, the government established the Synthetic Fuels Corporation. Then Exxon, Chevron, Texaco, Union, Oxy, Mobil and others responded with huge investments in coal gasification, coal liquefaction, oil shale, tar sands, and other syncrude projects. Exxon even built a town to support its future oil shale workers. The government was ready to provide subsidies to allow these plants to compete with imported oil. Just when it seemed we were on the verge of going ahead, the world oil price was lowered, and the synthetic fuel program wasn't important anymore. So, President Reagan effectively ended the program in 1984. Not only did he cut the funding in half, but his bill required that synthetic fuels be competitive with world oil prices. The oil companies immediately abandoned their projects. Oxy kept going on oil shale for a few more years, but then was forced to quit because the price of oil remained low. It is important to note that our consumption and imports of petroleum decreased substantially while the synthetic fuel program was active. Even though imports have steadily declined as our domestic production has steadily increased, the price of crude oil has contined to rise.
OK, that's history, what can we do now?
Well, for one thing, we should continue with efforts to conserve, replace, or reduce consumption of petroleum. We could also use coal and oil shale to replace crude oil and to make petroleum products. To do that we would probably have to restart the synthetic fuels program and provide government subsidies as needed to get production started. We could then use naturally occuring oil mainly for petrochemicals and plastics, and stop wasting it on electricity generation and transportation fuel.
If we stop generating electricity with coal and oil, what would replace it?
We could increase the use of nuclear power for electricity generation, and replace older coal-burning power plants with nuclear. It's been proven to be safe! (Click here for safety statistics.) New reactor designs, such as the pebble bed reactor currently under construction in China, have virtually eliminated all possibility of nuclear accidents. You can read more about the pebble bed reactor here. For more information on safe nuclear energy click here. In 2002, the U. S. generated 20% of its electricity with nuclear power. During that same period, the U.K. generated 22% with nuclear. Germany generated 30% with nuclear, while Japan generated 35%. France generated 78% of it's power with nuclear, and Lithuania generated 80%. And since there are no greenhouse gases from nuclear power, we would greatly reduce the environmental impact. This link gives a complete breakdown of world nuclear power generation including capacity in megawatts. Or, you can click here for a graph of world nuclear generating capacity. And, if you want to learn about current methods of nuclear waste disposal, or plans for future handling of radioactive wastes in the U.S., click here.
In summary, biofuels and synfuels are the best large-scale solution with the potential to completely replace crude oil. All the energy needed to produce synfuels comes from the raw material oil shale or coal, and we have the world's largest supply of oil shale as well as very large coal reserves...enough to supply our needs for several hundred years. Environmental issues are controllable, and as the technology matures, these issues will be negligible. Finally, we must also pursue every other option to reduce our dependence on fossil fuels. These options include wind, solar, tidal, E-85, hybrid vehicles, electric cars, conservation, and increased nuclear electric generation.
What about global warming, won't fossil fuels make it worse?
Global warming is real, but it is NOT a climate crisis. There is no scientific basis for concluding the climate is doing anything unprecendented or dangerous. Experts in scientific forecasting procedures have found flaws in the models used by IPCC scientists to make their predictions of "dangerous manmade global warming". Climate is always changing... it has been continuously warming and cooling for the last 4,500 years! Any additional contribution of fossil carbon into the atmosphere over the next 40 to 50 years would be insignificant compared to the present levels. We are not going to die from global warming....we may be uncomfortable....but we won't die. However, if we don't switch to renewable fuels to supply our energy needs we will die.... soon...... economically, politically, and from wars waged to protect foreign crude oil suppliers.
I see how this problem affects me, but what can I do about it?
The first thing you could do would be to learn as much as you can by reading all the publicly available information. For example, the American Energy Independence website is an excellent reader-friendly source. Then, talk about it with your family, friends, neighbors, and anyone else who will listen. You can send this website address to everyone on your e-mail list. We need to spread the word and make everyone aware of the problem. (According to "The Oil Crash and You" by Bruce Thomson, 2009 was predicted to be the year when global oil supply first fails to meet global demand.) But, we also need to let everyone know that THERE IS A SOLUTION! Using technology and resources that already exist in this country we can satisfy America's immediate energy needs so that:
Ultimately, by the time fossil fuels are depleted, we will have perfected the use of permanent, renewable sources of energy to meet ALL of our energy needs, and we will be completely energy independent!
But, we must start now! Contact your representatives in Congress and the Senate and tell them we want to be free of dependence on foreign oil, whatever it takes. (Click here for a sample letter you can copy.) We're spending billions of dollars to protect our sources of foreign oil. Why not spend those billions of OUR DOLLARS on development of our own independent energy supply?
Thanks for taking the time to visit this website. If you found it helpful, please tell others about it.
Please help spread the word You are visitor number
Privacy Statement and other Legal Stuff
This website is a public service for informational purposes only. The views and opinions expressed here are strictly the author's. Visitors are strongly advised to read the data provided by the links that appear herein and to draw their own conclusions. All linked data is publicly available, and the providers of that data are solely responsible for its accuracy and reliability.
This privacy statement demonstrates this website's firm commitment to privacy. The website administrator will not ask you for, and does not want any personal information. If you elect to send email, the website administrator will not disclose, sell, or otherwise make your name or email address known to others. For your information, third-party advertising companies are allowed to serve ads when you visit this website. These companies may use information about your visits to this and other websites in order to provide advertisements about goods and services of interest to you. However, the information collected will NOT include your name, address, email address, telephone number, or similar personal data. If you would like more information about this practice or to "opt out" and know your choices about not having this information used by these companies, click here. The following discloses this website's data gathering and dissemination practices.
Upon Entering the website - Cookies: The website administrator does not compile information on the IP addresses that contact this website, and will not knowingly provide that information to others. Cookies don't reveal personal information. The only personal information a cookie can contain is information you supply yourself. Cookies can't read unrelated data off your hard drive. The help function on most browsers contains information on how to set your browser to notify you before accepting a cookie or to disable cookies entirely.
Links: This website may contain links to external websites that are not within this website's control. If you decide to use any of these external links, you will be connected to a site not covered by this website's privacy policies. It is recommended that you read their privacy statements, since they may differ from this website.
By visiting this website, you agree that your visit is governed by this Privacy Statement which may be revised from time to time.
The website administrator does not endorse any product or service offered or promoted by any of the commercial or non-commercial websites whose links appear herein. The commercial websites are listed herein at the sole discretion of the website administrator and are principally oriented toward energy or petroleum-related issues. The website administrator disclaims and waives any responsibility, in whole or in part, for any products, services or merchandise offered by the aforementioned commercial interests or any of their associated parties or entities.
Links are provided as a general information resource for the use of visitors to the website. The website administrator can not guarantee the suitablity of the information provided via these linked-to sites, and inclusion of these links does not constitute the endorsement of any organization. The links provided are maintained by their respective organizations and they are solely responsible for their content.
The information presented throughout this website is provided by the website administrator "as is" and without warranty of any kind, expressed or implied, including (but not limited to) any implied warranties of merchantability, fitness for any particular purpose, or non-infringement. While the information provided is believed to be accurate, it may include errors or inaccuracies.
The website administrator welcomes comments and suggestions from the user community. However, anything contradicting the stated policies and objectives will not be responded to or used by this website.