A New Dawn For Oil?

One of the more frustrating parts of being an environmentalist ‘in the know’ so to speak is that sometimes you have to challenge perceived wisdom of the kind that you really wish was actually true. The notion of oil and gas as finite, fossil fuels is one that almost everyone is familiar with; the notion that oil is going to run out very soon is one that is almost as widely held. However if you ask a geologist when we’re going to run out of oil they will describe a much murkier picture. Indeed for a glimpse of how confused the situation is, here is an article I wrote earlier this year for Experimentation Online on the subject of oil resources. While estimates of when the black gold will dry up vary wildly it can probably be safely assumed that we have at least fifty years of oil left and, according to a new report by the IEA among other sources, we may have much longer.

To summaries the IEA report, the somewhat controversial exploitation of oil shales and tar sands is leading to a supply boom for oil and gas in the western world. In the US alone supply from these sources is expected to rise from 23% currently to 49% by 2035. Instead of the slow decline of supply as the points of ‘peak oil’ and ‘peak gas’  are reached new technologies and ever increasing demand (along with the ever increasing cost that every motorist is familiar with) are leading to an oil boom. In fact, as engines become more efficient and supply continues to increase the IEA quite optimistically predicts that the US is on track to becoming self-sufficient in terms of both oil and natural gas and may even become a major exporter in the future.

This is all a bit different from what you thought you knew about oil isn’t it?

While it is the US and Canada that are benefiting the most right now, being rich in the geological formations that contain this unconventional oil and having the technology to extract it, the rest of the world may yet follow. On the heels of the IEA report The Diplomat published a very interesting article highlighting the potential for extraction of oil and gas from unconventional sources to spread to Asia. As ever China appears to be heading for a collision course with America having made recent moves to try to acquire the appropriate technology to extract fossil fuels from its own shale

formations. Australia seems even better placed to compete on the global market with both a more suitable geological setting than China and a proximity to the burgeoning, oil hungry economies of South-East Asia that America cannot match. However it is not unrealistic to suggest that some of these developing economies will, given time, try to drain their own shales and tar sands rather than buying from their neighbours. The think tank EAI (not to be confused with IEA) which specialises in developing new energy policies for India suggests that the country, now the world’s fifth largest economy may have up to 15 billion tonnes of oil shale reserves alone in three main regions, the Assam Shelf, Naga Schuppen Belt and Assam-Arakkan Fold Belt. The idea that the Indian government and energy industry as a whole will ignore this potentially vast resource is naïve to say the least.

So it appears that the perceived wisdom that oil is running out needs a bit of a revision. Conventional oil bearing formations such as those being drained in the North Sea and Persian Gulf are edging towards their peak but there is still plenty in the tank for the world as a whole. The range of environmental and economic consequences of this are vast and could fill a number of pages (I again recommend the article in The Diplomat for a brief, Asia-centric summary of them). However, as long as there is money in extracting oil and gas and we, the public, feel no pinch at the pump there is never going to be the will to invest wholesale in the innovative green technologies needed if we are truly going to combat climate change. For once it would perhaps be best if that perceived wisdom was correct. If we really were staring down an empty oil barrel we might start sorting out the climate before it is too late.

(NB. This piece was initially published on ‘Earth Politics’ in late 2012)

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