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
NEWSWEEK
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.
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.
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.
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.
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.
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