Oil is a finite resource.
Around this fact of nature pivots a debate as important as it is fascinating. It's important because it concerns future availability of the cheap energy on which industrial society depends.
The debate spirals from a chilling question: Given the finite nature of the resource, the escalating rate at which humanity produces from it, and a diminishing discovery rate, can a peak in production be anything other than imminent? That question breeds others. How rapidly will production decline after the peak? What forms of energy stand ready to replace oil? How much will the transition cost?
Important series
This issue of Oil & Gas Journal contains the last in a six-part series of special reports on these subjects. Written by Executive Editor Bob Williams, with contributions from industry specialists and help from everyone on the staff, the series is among the most important editorial projects of OGJ's 101-year history. It reports some of the best thinking by some of the best thinkers on future energy supply. It documents the wide range of highly refined opinion about when conventional oil production might peak. And it analyzes important ramifications to the oil and gas industry and to energy consumers of the imminence—if that's what it is—of a fundamental turn in oil production.
The series doesn't dawdle over questions about when the world might run out of oil. The world never will run out of oil. For reasons of economics if not politics, humanity will quit using oil before nature exhausts its supply.
The series also doesn't answer the crucial question about how much oil originally existed in nature. In fact, no one knows. OGJ has no unique insight into this mystery and would be deeply suspicious of anyone who pretended to know the secret.
The series does show that the indisputable assertion about oil's being a finite resource isn't as simple as it seems. For conventional oil, important horizons of finiteness are indeed coming into view. Discovery doesn't add as much to reserves as it once did. Discovery of ways to produce conventional oil economically from known deposits, volumes of which remain large, has grown in importance to both the upstream industry and to future energy supply.
If that transition heralds a downturn in production from conventional sources, however, barriers to unconventional supply point the opposite way. Known deposits of heavy oil, tar sands, and shale oil are immense. Technology has made production from some such deposits economic, and the volumes are significant and growing. Technology also has created the promise of oil from abundant natural gas. The question is not whether potential exists but the extent to which production from these sources can offset the decline from conventional oil—whenever and at whatever rate it occurs. Consumers, in any event, care nothing about technical distinctions among sources, conventional or otherwise, of equivalently priced oil products.
OGJ's series further makes clear that the finite nature of oil involves more than geology and geophysics. Science's postulates are as much starting places as they are constraints. Its practical soulmate, engineering, doesn't just improve recoverability of past discoveries; like new geologic theories and improved geophysical tools, it also broadens the hunt. As expandable tubulars and improved metallurgy extend drilling-depth limits, for example, scientific concepts about the subsurface at hitherto undrillable depths—and about the potential of those realms to yield hydrocarbons—surely will evolve.
Refining advances
What's more, the measure of progress in refining technology is how much chemical energy so wonderfully concentrated in crude oil can be made available for useful work. The successful emphasis of recent decades on improving environmental performances of oil products shouldn't obscure energy-supply advances achievable through processing innovation.
Nor should hydrocarbons be isolated in either policy-making or commercial planning from the promise of energy from alternative sources. For example, while the undependability of sunlight makes solar-powered cars impractical, adding solar panels to the electric-gasoline hybrids now showing promise might make sense. Such fusion of hydrocarbons and alternatives probably defines the future of energy. While oil won't run out, it will someday increase in cost as costs of alternative energy decline.
Oil is, after all, a finite resource. The larger message in OGJ's series is that human ingenuity is not.
