Oil: Too little, too much, running out?
The “problem” is normally phrased in terms
of supply and demand
• The world (especially
Global North) is seriously
addicted to petroleum
• Large & cheap deposits
have been easily accessed
• But future sources cannot
meet growing demand
• As production declines,
prices will rise
• This will be very costly &
could lead to conflicts &
“oil wars”
The “solution” is not entirely clear
• Produce more energy: what
kind, how, where?
• “Drill, baby, drill!”
• Assert military control over
remaining resources
• “Ecological modernization”
to reduce energy use
• Radical conservation through
very high energy taxes
• Decentralization: everyone
makes their own energy
How much oil is there?
Remaining U.S. sources are limited
U.S. oil production and reserves have been in decline
since the mid-1970s
Which is why Canadian tar sands are of such interest
it takes 28 m3 (1000 ft3 ) of natural gas and from 2.5 to 4
barrels of water to produce one barrel of bitumen.
Many would argue that we will find new
petroleum & energy sources
• As production & supplies
decline, prices will rise
• This will pull more costly oil
sources into production
• Substitutes (e.g., ethanol)
will penetrate the market
• Alternatives will become
economically attractive
• We will never “run out of
oil,” because demand will
decline & it will be used for
other purposes
Do we see oil prices rising?
Perhaps there is too much oil!
• Industrial society has had
access to too much cheap oil
• We have a “right” to lowcost oil & energy
• No incentives to use it more
carefully
• Strong incentives to sell as
much as possible
• Disruption of earth’s carbon
sequestration systems
• Unforeseeable consequences
What is the “true” price of gasoline
(per bbl)?
• “Marginal Production cost”: $75
• Ecosystem services: $55
• Cumulative env. impact ($1/yr for 50
yrs.): $50
• Cumulative social impacts ($2/yr/
for 50 yrs.): $100
• Military protection: $25
• Opportunity costs: $100
• Producer profit: $60
• Total: $465/bbl or $11/gal
• (Might be too low or too high by a
factor of two)
• What is to be done?