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When Wells Go Dry
Energy: The rate of global oil production will start to fall in just a few years, says a controversial geologist. And alternative technologies aren’t ready yet
By Fred Guterl
Arpil 15 issue — As Kenneth Deffeyes walks the five blocks from the Princeton University campus to his home, he veers sharply through a parking lot and then without warning takes a diagonal path across a side street. He doesn’t seem to be paying any particular attention to where his sneaker-clad feet are taking him. His hands are tucked firmly in his parka, his eyes are looking up at a cloudless blue sky and his mind is where it usually is: on the world’s supply of oil. In particular, Deffeyes is trying to explain why anybody should believe that the entire human enterprise of oil exploration—the search for reserves, the drilling of wells, the extraction of crude and all the attendant calculations of supply and demand—why this whole messy business should obey a simple but elegant piece of mathematics.
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       DEFFEYES HAS REACHED a conclusion with far-reaching consequences for the entire industrialized world. So far-reaching that many of his colleagues in the field of petroleum geology dismiss it. The conclusion is this: in somewhere between two and six years from now, worldwide oil production will peak. After that, chronic shortages will become a way of life. The 100-year reign of King Oil will be over. And there will be nothing that President George W. Bush or Saudi princes or the invisible hand of the marketplace will be able to do about it. “There’s nothing we could conceivably do now that would have much of an effect on the oil supply for at least 10 years,” says Deffeyes.
More Oil FactsNon-OPEC Oil ProducersOPEC MEMBERS   SOURCE: U.S. Energy Information Administration
       This news isn’t all bad. For the past decade, climate scientists have lobbied for drastic reductions in the use of fossil fuels, which release carbon dioxide into the air when burned, creating the “greenhouse effect.” And since September 11, some political leaders have called for reducing Western dependence on oil from the Middle East. At the same time, alternative technologies have advanced considerably in recent years. Farms of slender windmills have sprung up in California and Europe, generating electrical power at prices nearly competitive with conventional fuels. Photovoltaic panels that convert sunlight to electricity have fallen in price and are being built into roofing shingles. Hydrogen-fuel cells, another “clean” energy technology, offers an increasingly attractive long-term alternative not only to electrical power but to replace the internal combustion engine in automobiles; President Bush has made fuel cells the centerpiece of his long-term energy plan.
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        Despite the progress in alternative fuels, however, the world will have to depend on hydrocarbons such as oil, coal and natural gas for a while yet. Without the political will to pursue alternatives with the wartime vigor of those who created the Manhattan Project to build the atom bomb, it would take decades to replace old power plants and phase out the ubiquitous gas station. Deffeyes, by conjuring up the bad years of the 1970s, when the Organization of Petroleum Exporting Countries restricted oil supplies and sent Western economies reeling, is injecting a large dose of urgency to the debate.

       How did Deffeyes arrive at his gloomy forecast? He likes to say that he grew up in the Oklahoma oil patch: his father was a petroleum engineer, and during summers off from high school and college the younger Deffeyes worked odd jobs in the oil fields. But the real genesis of his thinking was a brief stint he did at Shell Oil’s research labs in the late 1950s, at the very start of his career. There he worked under the late geophysicist M. King Hubbert, who in 1956 made a startling prediction. At the time, oil reserves were being discovered at an accelerating pace, and the oil business was booming, with no apparent end in sight. But Hubbert had done groundbreaking work by applying a combination of geophysics and statistical analysis to the base of U.S. oil reserves, and from there projecting domestic production rates for years to come. The result was a bell curve: production was then going up, but it would inevitably peak and then start to decline. The math told Hubbert that the peak would come in the early 1970s, which clashed with the conventional wisdom of the time. In fact, that is more or less what happened: U.S. oil production hit its high in 1970, then started down just in time for the OPEC-induced oil crisis. But at the time Deffeyes was one of the few people who took Hubbert’s prediction seriously. “I realized that a contracting oil industry was not a good career prospect,” he says, “so I decided to get out and go into academia.”

       After spells at the University of Minnesota and Oregon State, Deffeyes pitched up at Princeton (and served as John McPhee’s guide and mentor for his memorable writings on geology, collected as “Annals of the Former World”). There he applied Hubbert’s methodology to global oil supplies. The results shocked him: the bell curve would peak sometime between 2004 and 2008, depending on how you crunched the numbers.
        But why should oil production follow a bell curve? Deffeyes offers the analogy of a hunter shooting at a target. Each time he’s going to miss by a certain amount due to wind or air temperature or faulty aim or hand tremors. If he fires 1,000 shots, you would measure how far each shot falls from the center of the target and plot how many shots fall at each interval of distance. The resulting graph will take the shape of a bell. The fat part of the graph will sit over the target, where most of the shots landed, and the two downward slopes will correspond to those distances on either side of the bull’s-eye. Oil exploration is a similarly hit-and-miss affair. Despite all the high-tech methods geologists use nowadays, nine out of every 10 exploration wells turn out to be dry. It stands to reason, Deffeyes argues, that as more of the world’s oil is discovered, the smaller the new finds are going to get. Deffeyes’s bell curve is a plot of the volume of oil discovered each year for most of the 20th century. The curve rises slowly at first, as geologists picked off the easy-to-find fields—the ones that announced themselves with telltale tar pits and oil slicks. The curve shoots up during the ’50s and ’60s, when geologists discovered many of the bigger, deeper reserves, such as those in the North Sea, the Bass Strait and Saudi Arabia. As the century draws to a close, the pace of discovery actually accelerates, but the finds are smaller. The curve begins to flatten out.
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        Already, Saudi Arabia is the only oil-producing country that doesn’t sell as much as it can pump. That fact has allowed the Saudis to dominate global markets, but they can’t offset the shortages yet to come. Pumping at maximum capacity, they would add less than 4 percent to the world supply. Nor is technology likely to offer a way out. Energy companies, says Deffeyes, invested billions of dollars in the past 30 years to improve their ability to discover and extract oil, and it’s unlikely that any breakthroughs in the offing would significantly change the equation. Technology would help eke out the hardest-to-reach reserves, but the curve would still fall. “What would it take to get another hump in the curve, with a peak farther out?” says Deffeyes. “There would have to be another kind of oil field altogether. And there’s no evidence that such a thing exists.”
        Deffeyes, who reported his findings last October in a book, “Hubbert’s Peak,” has his detractors. Ronald Charpentier, a geologist at the U.S. Geological Survey, wrote recently in the journal Science that Deffeyes’s estimates are based on a “questionable methodology” that is attractive in large part because it requires “modest data and human resources.” The USGS’s 2000 survey of world oil supply—which took 100 man-years to prepare, as opposed to the six months Deffeyes spent running his numbers—shows a worldwide oil supply of more than 3 trillion barrels (a trillion more than Deffeyes estimates). And Charpentier argues that additional discoveries, such as deep-water oil now being extracted in the South Atlantic, as well as untapped reserves in the Caspian Sea, Siberia and Africa, could change the outlook considerably. “There’s a lot of oil and gas out there,” he says, “but it’s not necessarily where you want it to be and at a price you want it to be.” Deffeyes says he doesn’t dispute the possibility of finding new reserves, but he insists they’re likely to be less fruitful than the USGS thinks.
The US Power Grid : How the system supplies electricity        What if Deffeyes is right? How will the world satisfy its growing demand for energy? Carmakers (not to mention President Bush) have pinned their hopes on hydrogen-fuel cells, which would emit no carbon and wouldn’t entail drilling in unfavorable parts of the world. General Motors has stepped up its research budget for fuel cells from $1 million a year in 1990 to $100 million this year. “We believe hydrogen is the long-term answer,” says Matt Fronk, GM’s chief engineer for fuel cells. Photovoltaics (solar panels) have been hobbled by the high cost of semiconductors used to make them, but cheaper alternatives are in the offing. The National Renewable Energy Laboratory in Colorado, for instance, is developing an inexpensive way to deposit ultrathin layers of semiconductors on glass, steel or flexible plastic sheets. Says Christoph Frei of the World Economic Forum: “Everyone expects the energy mix to change.”
        But developments such as these, as exciting as they are, will not be of much use in the next decade. In that time, natural gas will probably be the most attractive hydrocarbon substitute for oil, at least for electricity generation and heating. It is relatively clean and, by all estimates, plentiful. Using it in cars, though, would entail a whole new fuel infrastructure that couldn’t be built in a hurry. The only other real alternative would be conservation. According to conservation advocate Amory Lovins, improving the average fuel efficiency of vehicles in the United States by 2.7 miles per gallon would equal all U.S. oil imports from the Persian Gulf.

        There’s always the chance, of course, that the next decade will come and go without so much as a wobble in the supply of oil. Deffeyes allows for the possibility that he is wrong. “You’ve got to give Hubbert credit for getting it right,” he says. “Then you ask yourself if he was lucky or if he really knew.” Deffeyes sighs. “And you just don’t know.” With global warming, that brings to two the number of urgent but tentative reasons to pursue alternatives to fossil fuels.

With Adam Piore and Sandy Edry

Hydrogen Power: Hot Springs Eternal
     2 of 3
    1. Oil: When The Wells Go Dry
      2. Hydrogen Power: Hot Springs Eternal
      3. Wind: Taking the Breeze


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