I’m willing to wager most people haven’t heard the term “Peak Oil” yet. That’s about to change in the next few years. First, a little warning – this post will be pretty dense with info, and you might feel like you’re drinking from a fire hose as you read through it. Pucker up, I’m turning on the hose full blast.
Peak Oil is based on the idea that there is a finite amount of oil in the ground, and we will eventually reach the point where we’ve extracted half the oil on earth. As we get to the point where half the earth’s finite supply has been pumped out, a couple of things will start to happen. The total oil production will start to slow down, because we’ll start retiring productive oil fields. We won’t be able to replace lost oil fields by definition: To simply it a bit, say we’re actively running all the available oil fields on earth. If half of those run dry, there’s no place to go to find new ones. So we won’t be able to replace lost production. Let that sink in a moment – we won’t be able to replace lost production. So in effect, at point we reach about half the oil gone, we’ll reach a “Peak” moment – where production in future years will decline and there is nothing anyone can do about it, because we simply can’t find more fields to satisfy world oil demand. That’s a gross oversimplification, but you get the idea.
The fact is most of the continents are past peak and in oil production decline. That doesn’t bode well for maintaining the high standard of living we now enjoy, fueled mostly by, well, fuel. If we run dry, no more affordable airplane flights. No more car rides. No more machinery powering superefficient farms and no more lighter fluid for backyard barbecues.
We’ve been fine so far though, because there’s one area which so far has been pumping out plenty of oil: the Arabian gulf region. In fact, the gulf is home to Ghawar, the largest oil field which will ever be discovered on earth (if there was anything bigger we would have found it by now). Ghawar sits just on the coastline of Saudi Arabia, and the northern part of Ghawar contributes a whopping 55-60% of Saudi Arabia’s oil production. By extension, that means Ghawar is responsible for almost 15% of the world’s production. Fifteen percent from just one field. No other field comes close, and there is simply no way the Saudis can replace this field once it starts running dry. So once Ghawar is past peak production, Saudi Arabia is past peak production. Once the Saudis pass peak, the world is past peak.
Well, guess what: evidence is mounting that Ghawar peaked in 2005. what’s worse, there is also evidence that the Saudis have been too optimistic about the amount remaining. Even non-industry people have noticed.
The most conclusive evidence of a past-peak Ghawar field would be increased drilling with decreasing production, as the Saudis scramble to prop up output of a field in decline. Take a look at the following graph plotting new rigs in northern Ghawar on top versus the area’s oil production on the bottom (click for a larger view):
Not good. So should all go out and buy horses? I hope not. That’s pretty fatalistic, and nobody wants to return to a pre-industrial society. We’ll probably want to design hyper efficient tech goodies. We’ll probably want to stop suburban sprawl and make driving less frequent. Most importantly, we need to start pouring money into research on renewable and nuclear energy. The good news is we have time to start switching now, and we may be able to mitigate the crunch if we attack the problem from multiple angles.
I know what you’re thinking: “dude, we’ve got, like, technology and stuff”. It ain’t going to happen; technology won’t replace lost oil supplies. However, technology can be applied to develop commercially viable nuclear and renewable power. Time to get moving on that.