1. Supply

2. Where will we obtain the oil that we need?

3. Supply Experts are divided into two schools: the optimists and the pessimists.

4. Common Ground

5. Areas of Common Agreement Both schools agree: 1) Oil is non-renewable 2) At some point, it will become too expensive to use 3) Burning oil generates air pollution 4) Burning oil worsens catastrophic climate change

6. Areas of Common Agreement Both schools agree: 5) Oil is too valuable a natural resource to waste by burning in engines 6) We need to find alternate energy sources that are not polluting

7. Optimists

8. Supply/Optimists Optimists believe that we have many decades worth of plentiful oil (and natural gas) waiting to be found.

9. Supply/Optimists They have several reasons for optimism: 1)Continuous improvements in all areas of technology, from mapping underground rock structures; through drilling; through transportation systems; through refining.

10. Supply/Optimists 2.In particular, improvements in discovery and drilling have meant that new fields have been found (Alaska, North Sea) and old discoveries can be tapped for the first time.

11. Supply/Optimists 3.There is every reason to believe that technology will only improve in these areas.

12. Supply/Optimists 4.Many parts of the planet remain to be explored, and 5.There are still numerous promising areas that have yet to be thoroughly searched (offshore of West Africa, deep in the Caspian Sea).

13. Supply/Optimists Bottom line: there is plenty of oil left, and we will have enough time to develop alternative fuels without difficulty.

14. Pessimists

15. Supply/Pessimists Pessimists believe that we have only a few decades worth of plentiful oil waiting to be found.

16. Supply/Pessimists 1.While it is true that many parts of the planet remain to be thoroughly explored, part of that is because preliminary searches determined that some of these areas had no oil, or extremely little.

17. Supply/Pessimists 2.The promising areas may turn out to be duds: the oil industry is littered with promising areas that turned out to be disappointments.

18. Supply/Pessimists For example, it was believed that the southern Caspian Sea region contained up to 250 Billion barrels, just waiting for western technology to be tapped.

19. Supply/Pessimists After a decade and more of search, they have found only 30 billion barrels, in a large number of small fields, deep underground, and heavily contaminated with sulfur compounds.

20. Supply/Pessimists 3.In any case, most of the promising areas will be where the costs of drilling them will be substantially higher than current oil production costs (offshore).

21. Supply/Pessimists 4.Much of what we have left is in potentially politically unstable regions, such as the Middle East.

22. Supply/Pessimists 5.Every year that passes without a major discovery increases the likelihood that there is a lot less oil to be found than the optimists believe, because it isn’t there.

23. Supply/Pessimists Bottom line: there is a lot less oil left than the optimists believe, and we need to start rapidly developing alternate fuels today.

24. Supply So who is right? We really don’t know how much oil is left.

25. Supply: Optimists 0 Pessimists 1 The pessimists are right to point out that a large percent of known reserves are controlled by OPEC.

26. Supply Optimists 1 Pessimists 1 The optimists are right that technology has found new fields, will discover more, and will make more available from existing fields.

27. Supply Optimists 2 Pessimists 1 Pessimists have been wrong many times before. In fact, once every thirty years or so they predict problems…

28. Supply Optimists 2 Pessimists 2 Pessimists are right in pointing out that every year without the discovery of a giant oilfield means finding one is less and less likely.

29. Supply Optimists 2 Pessimists 2 Without that giant, nearly everyone agrees that there will be difficulties starting sometime between 2010 and 2020.

30. Supply: Known Reserves Uncertain? Join the club!

31. Supply: Known Reserves What we think we have are called: KNOWN RESERVES, which are reserves already found and available with current technology.

32. Supply: Known Reserves We used to be completely sure about known reserves, and so the debate was about possible and potential reserves.

33. Saudi Arabia and its Oil

34. Saudi Arabia Saudi Arabia has the world’s largest estimated reserves, at about 260 billion barrels.

35. Saudi Arabia Everyone is counting on Saudi Arabia to pump enough oil to cover any shortfalls in the next few years, or decades. But what if there is less oil than we are told by their government?

36. Saudi Arabia 1) In 1977, they reported 100 billion barrels of proven (known) reserves. 2) In 1982, they claimed to have 160 billion barrels. 3) In 1988, they claimed to have a total of 260 billion barrels.

37. Saudi Arabia 1) Since 1988, they have claimed to have 260 billion barrels every year that they report their reserves. 2) Yet between 1988 and 2004, they have pumped out 46 billion barrels.

38. Saudi Arabia 1) The new technology for finding oil and expanding use of older fields came after the Saudis expanded the size of their reserves. 2) In spite of 30 years of exploration they have not found any new fields of any significance.

39. Saudi Arabia Do the math! It is doubtful that they have as much as they claim they have…

40. OPEC and its Oil

41. OPEC OPEC stands for Organization of Petroleum Exporting Countries. Nearly all of the large exporting countries are members of this group, including all of those in the Middle East.

42. OPEC: Kuwait 1) In 1984 Kuwait reserves were 64 billion barrels 2) In 1985, Kuwait reserves jumped to 90 billion barrels. 3) In 1988, Kuwait reserves rose to 92 billion barrels.

43. OPEC: the others 1) In 1988 Abu Dhabi almost tripled their reserves to 92 billion barrels 2) In 1988, Iranian reserves jumped from 49 to 93 billion barrels. 3) In 1988, Iraq reserves rose to 100 billion barrels. 4) In 1988, Venezuela went from 25 t0 52 billion barrels

44. OPEC In just 5 years, OPEC reserves increased by 305 billion barrels. Incredible.

45. OPEC: Kuwait It gets worse. In 2006, the news magazine Financial Times obtained documents from the Kuwait oil company that showed its reserves were not 102 billion barrels as claimed, but 48.

46. OPEC: Kuwait The info on Saudi Arabia and Kuwait, and elsewhere, strongly suggest that OPEC figures are unreliable. To say the least…

47. Hubbert’s Peak

48. This phrase comes from the work of American geologist Marion King Hubbert. In 1959, he predicted that United States oil production would peak in 1970. Everyone laughed at him.

49. Hubbert’s Peak U. S. continental oil production peaked in 1971. It has fallen continuously since then… All U. S. production has declined since the late 70’s…

51. Hubbert’s Peak Other oil producing countries have reached a peak in their production, and have fallen since then. So far, they have been small or medium sized producers.

52. Hubbert’s Peak This has lead some geologists to talk about a world wide Hubbert’s Peak: This would be a situation where global oil production hits a peak, and then permanently declines, because the oil supply runs out.

53. Peak Oil Hubbert’s Peak is also known as Peak Oil Unfortunately, we won’t know when we hit peak oil until afterwards, possibly a couple of years later.

54. Supply vs. Demand

56. Supply Each column represents a year. The dark columns on the left and center represent the total amount of new oil found that year. The light grey represent projected new finds. The dark line represents total global consumption for that year.

57. Estimates of Global Peak Oil Six independent studies, using different methods, all came up with about the same time for global peak oil. 2011 to 2023

58. Source for the estimates of global peak oil Strahan, David. “The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man.” John Murray Publishers, UK 2007. Pages 200-203