World Oil Supplies Adequate to 2030 If...

Ronald Bailey | November 7, 2005

The International Energy Agency issued its World Energy Outlook 2005 report today which concludes that with sufficient investment ($17 trillion) in infrastructure and exploration that world oil supplies will meet demand at least until 2030.

The bad news? Most oil reserves are owned by governments and governments are not known for their business and investment acumen. Futhermore most of the increase in oil supplies will come from Middle Eastern countries whose devotion to liberal politics is somewhat limited.

Comments

|11.7.05 @ 1:06PM|#

...Middle Eastern countries whose devotion to liberal politics is somewhat limited.

I don't know if it's possible for understatement to be sublime, but if so, this statement qualifies.

|11.7.05 @ 1:17PM|#

But, but - I thought it was all running out Real Soon Now, heralding destruction and terror and anarchy!

|11.7.05 @ 1:18PM|#

I vaguely recall a funny post about "Peak Horse" some time ago. Could somebody repost that?

|11.7.05 @ 1:27PM|#

2030 ain't that far away in an 'I need an energy to run my economy' context.

|11.7.05 @ 1:27PM|#

Humongous,

It's easy to have such a misinformed opinion about the problem of Peak Oil if your only exposure to the concept comes from its critics.

|11.7.05 @ 1:30PM|#

Humongous, you've got to stop reading the sites of Peak Oil boosters, especially ones that come up in the top two when you google "peak oil".

VM|11.7.05 @ 1:32PM|#

Thoreau -

Stevo knows where it is. Jennifer posted it.

|11.7.05 @ 1:39PM|#

"Peak Horse" site:reason.com

|11.7.05 @ 1:51PM|#

What? Where? I keep getting praised for it and I don't even remember it!

|11.7.05 @ 1:57PM|#

Thanks, MikeP.

Jennifer-

You didn't even make the comment. Somebody else did, according to the link. But you are the person most associated with Peak Oil around here, so your name got attached to it.

It reminds me of interesting things I've heard about the names of mathematical theorems, and how sometimes the name we associate with a theorem today is not the name of the original discoverer, but simply the name of the person who included it in a textbook. Hell, optics is full of similar phenomena.

|11.7.05 @ 2:00PM|#

2030? That's it?

|11.7.05 @ 2:03PM|#

But, but - I thought it was all running out Real Soon Now, heralding destruction and terror and anarchy!

Well, 2030 is pretty soon, it seems to me. But not to worry, as I think that the arrival of destruction and terror and anarchy is on its own independent track, and will occur well before the oil runs out.

M1EK|11.7.05 @ 2:03PM|#

"world oil supplies will meet demand at least until 2030."

What a useless statement. World oil supplies will always meet demand, because 'demand' is a curve, and the price will just go up until enough demand dies off.

The proper way to phrase this is - how much oil do we expect to be 'demanded' at a given price point, or, conversely, what would the price be at the supply level we expect?

Anybody who says they can answer that question is a fool - there's too many variables. All the peak oil guys (well, the more credible ones) try to do is show that the SUPPLY may be peaking; this says nothing about price.

|11.7.05 @ 2:10PM|#

M1EK-

I agree. Statements like "Supply meets demand" are unremarkable. I haven't had a chance to read the article, but I'd be more interested in knowing about reserves or production capacities.

In any case, the next time I buy a car I expect that I'll be able to afford a hybrid. What I'd really love is a car that can run on several different fuels: Gasoline, biodiesel, and straight up grease (there are some guys who built a specialty car and drove cross-country on fast food grease). With a hybrid as well, to get the most mileage out of whatever fuel is in the tank.

fyodor|11.7.05 @ 2:11PM|#

For once I agree with M1EK. Supply always meets demand. At what price is the only valid question.

But I guess this is one of those linguistic quirks where words don't really mean what they literally mean. Like "at risk." How could anyone in the world NOT be "at risk" for just about everything realisticly possible? But of course "at risk" really means "at an especially high risk" or something like that. Likewise, I assume this talk of supply meeting demand probably means without the price skyrocketing.

|11.7.05 @ 2:14PM|#

What a useless statement. World oil supplies will always meet demand, because 'demand' is a curve, and the price will just go up until enough demand dies off.

Shoot. And I was hoping I could continue my daily 5W30 baths until at least 2030. I'd rather not switch to synthetic because it might irritate my sensitive skin.

|11.7.05 @ 2:16PM|#

M1EK: It might be better if you would please read the link before sounding off--the IEA price point is $35 per barrel by 2010 and $39 per barrel by 2030.

fyodor|11.7.05 @ 2:19PM|#

It might be better if you would please read the link before sounding off

But then OTOH, by sounding off, you got Ron Bailey to explain it to us without having to RTFA!! :-)

Guess it's essentially what I speculated about. Maybe there's some sort of threshhold assumption underlying use of "at risk" too?

|11.7.05 @ 2:21PM|#

M1EK,

Anybody who says they can answer that question is a fool - there's too many variables.

No, anyone who says they can answer it with exact certitude is a fool. You can of course come up with a reasonably accurate range though.

|11.7.05 @ 2:23PM|#

But then OTOH, by sounding off, you got Ron Bailey to explain it to us without having to RTFA!! :-)

fyodor-

Exactly!

|11.7.05 @ 2:29PM|#

So they're saying that oil will be very cheap in real terms through 2030, based on proven reserves alone. Music to my ears.

|11.7.05 @ 2:31PM|#

The Great Ape,

I dunno why that would be surprising. Markets and technology should tend to lower prices over time even if there are temporary spikes.

|11.7.05 @ 2:37PM|#

I dunno why that would be surprising. Markets and technology should tend to lower prices over time even if there are temporary spikes.

I'm not surprised at all. If "The Prize" taught me anything, it's to not worry about oil. 35-39 is great news for the next 25 years.

Shannon Love|11.7.05 @ 2:47PM|#

People have been making predictions about oil supplies ever since 1865 and they have always been pessimistic and wrong.

There are two reasons for this: (1) extraction technology evolves unpredictably. Nobody can estimate today what oil will be extractable 30 years from now. (2) Exploration is market driven. "Known" reserves of oil are merely those that the market will pay to find and develop within a short time window. Once companies find enough reserves for their needs over the next decade (at most) they stop looking.

Any predictions based on current technology and current reserves will always underestimate the available resource.

|11.7.05 @ 2:52PM|#

True, Shannon, but predictions can serve as useful baselines. A strong baseline can provide reassurance for people considering long-term investments. A low baseline can spur innovation in exploration, extraction technologies, and efficiency of use.

|11.7.05 @ 2:54PM|#

And thus Shannon Love ends the discussion.

|11.7.05 @ 2:56PM|#

I found this link afew days ago.

Interesting reading, although I've yet to follow up on it. You know, work and H&R take up so much of my time. :)

Shannon Love|11.7.05 @ 3:07PM|#

thoreau,

"predictions can serve as useful baselines..."

True, if anyone making the decisions pays any attention to them. I would be massively surprised if anyone in the actual petroleum business thought this analysis was worth the paper it was written on. As I said, people have been making widely inaccurate long-term predictions about oil supplies for the last 150 years. People familiar with this track record are not going to take this kind of prediction seriously.

Those in the oil industry who feel prey to the idea of the permanent shortage of oil in the early 80's got wiped out in the great oil crash. There is enough institutional memory in the business that they won't fall prey to that again anytime soon.

These kind of prediction do have political effect because the wider electorate does take them seriously because they are not familiar with the track record.

Which is yet another reason why government is systemically a poor decision maker.

|11.7.05 @ 3:22PM|#

Shannon Love is also showing why climate change and population growth modelling are untrustworthy.

|11.7.05 @ 3:23PM|#

In more important news, the Eagles have suspended TO for the rest of the year. Great news for Bears fans.

|11.7.05 @ 3:24PM|#

Dear Shannon Dougherty,
Why havent you called? Was it something I said/did? I'm beginning to think somethings amiss.

Love
urexcellency

|11.7.05 @ 3:31PM|#

The Great Ape,

With or without him this the Eagles were going to have a bad season. They should probably bench McNabb, get him his surgery, and start over next year.

|11.7.05 @ 3:36PM|#

Well, 2030 is pretty soon, it seems to me. But not to worry, as I think that the arrival of destruction and terror and anarchy is on its own independent track, and will occur well before the oil runs out.

Really? Awesome. I'm totally smiling behind my mask.

|11.7.05 @ 3:42PM|#

I think the point isn't whether oil supplies will last until 2030 or 3020, the point is, that the powers that be have decided to invest $17trillion to continue to support an antiquidated infrastructure to begin with, continuing a dependency upon a limited fuel source. I have read article talking about how an investment of under $1trillion would put us on the way to replacing fossil fuels, namely oil, by the end of the decade, and thats conservatively.
Personally, I think the whole thing is a crock, and am going to go finish installing the sails in the back of my truck.

|11.7.05 @ 3:48PM|#

Along Shannon's lines, there was an article at TCS a few days ago about Shale Oil, i.e., oil from petroleum soaked sand.

A large scale particulate separation process is expensive, but the result is very sweet/light, of the same quality as arabian crude.

Again, the production expense is the problem, but there is an absolute shitload of shale oil in the world today.

|11.7.05 @ 3:57PM|#

Call me snake,

Well, there are all manner of non-traditional sources of fossil fuels we could call upon. Lead in costs are high for these sources, but that has been true of any new industry.

|11.7.05 @ 3:58PM|#

Just about everyone here in Philly (who I talked to anyway) recognized last night's loss to the Redskins for what it was -- the end of the season. Sure there's 8 games left and a record of 12-4 would probably get us into the postseason, but it's been made abundantly clear over the past few weeks that this team just isn't good enough anymore to put together a legitimate winning streak of any kind.

So we're in rebuilding mode now, and we weren't going to keep T.O. next season anyway. At least this way, we won't have to deal with quite as much bullshit while we're losing. The next 8 games will serve to get Philly used to the idea of the Eagles sucking again.

|11.7.05 @ 4:00PM|#

Along Shannon's lines, there was an article at TCS a few days ago about Shale Oil, i.e., oil from petroleum soaked sand.

I think you are confusing Oil Shale with Oil Sands or Tar Sands.

There is already a large scale Oil Sands project in Northern Alberta. It is lagely a mining operation. They dig up the sand, haul it to a plant where the oil is extracted. The reserves in the Canadian tar sands are estimated to equal those in Saudi Arabia and already are a significant portion of Canada's production.

There are large reserves of shale oil in the western US and Australia. So far they have not been commercially exploited, but they have great potential if an economically feasible extraction process is developed. The most promising one involves injecting steam into one hole in the rock and pumping the oil out of another.

Any way they are two different situations. Tar sands are relatively close to the surface and are basically strip mined while oil shales can be quite deep.

|11.7.05 @ 4:03PM|#

The next 8 games will serve to get Philly used to the idea of the Eagles sucking again.

Is this sucking strong enough to yield new production from apparently depleted oil wells?

|11.7.05 @ 4:07PM|#

lowdog:

I've seen some writings along those lines before (regarding inorganic oil). However, I've long ago learned to not trust anything from a webpage where the entire article is centered.

|11.7.05 @ 4:07PM|#

You might have something there, MikeP. Maybe if we just call Freddie Mitchell out of retirement...

|11.7.05 @ 4:11PM|#

I queried mcnabb after the game as to his thoughts on yielding new production from depleted wells and he told me to read bill bonner's daily reckoning every day.

|11.7.05 @ 4:17PM|#

jf - yeah, I'm fairly sceptical about it myself, but I remembered hearing something about it a while back and googled it on Friday...that's all I came up with in about 5 minutes of searching. When I get more time, I'd like to just look about a bit more and see what I see, ya know?

|11.7.05 @ 4:22PM|#

Anybody here remember the 60s? Didn't think so. That's when many earnest, concerned young people began to question the sustainability of our oil supplies.

The old folk scoffed, of course. Scoff! Scoff!. Eventually the the young became old and took up the scoffing duties with more vigor than those who scoffed before them.

But none of that bothers me and furthermore I...Don't...Care! By 2030 I'll be dead. Dead, I tell you! Bwahahahahahaha!

|11.7.05 @ 4:23PM|#

Interesting reading, although I've yet to follow up on it.

You should follow it up with this. Bottom line -- even all old wells were refilling, they are not doing so at such a rate that it prevents the decline in production we are seeing year after year here in the US.

Some problems with the IEA report were noted on theoildrum.com a few weeks ago (the report was released today, but it is based on the publication critiqued in that post).

At the end of the day, not only is 2030 not so far off, but that prediction is based on some yet-to-be-determined technological advances that we are not certain to achieve (see: technology, fusion power).

|11.7.05 @ 4:31PM|#

The worlds oil supply is no doubt unlimited. We will never run out, all we have to do is increse exploration to find more oil. We have got to drill anywhere and everywhere so we can get more cheap oil for our SUVs.

|11.7.05 @ 4:32PM|#

Interesting quote from AP:

"You wear these clothes, with this color skin and you're automatically a target for police," said Ahmed, 18, pointing to his mates in Izod polo shirts, Nike sneakers and San Antonio Spurs T-shirts.

|11.7.05 @ 4:34PM|#

oops wrong thread

|11.7.05 @ 4:52PM|#

Seriously guys, I don't think this is anything to worry about. Jesus is sure to return before 2030.

|11.7.05 @ 5:00PM|#

Gary's sucking up to Shannon? WTF?

|11.7.05 @ 5:19PM|#

Kip:

Zombie Jesus doesn't make his return until around 2400.

|11.7.05 @ 6:29PM|#

"There are large reserves of shale oil in the western US and Australia. So far they have not been commercially exploited, but they have great potential if an economically feasible extraction process is developed."

My ray screen and static motor should be ready by then.

|11.8.05 @ 6:28AM|#

Reading the article and these posts, it seems most here gloss over the idea that -conventional- fuel oils will be cheaply available through 2030 -IF- governments and corporations act rationally.

Good *ing luck.

That said alternatives such as tar and shales look to be intersting, as well as biodiesel and others.