This accelerated growth in
the world’s automobile population is accelerating the pressure on finite oil
reserves, which is the next part of the problem. There are two interrelated issues
involved. One is limited supplies, which is very controversial, and the other is economic
vulnerability and the transfer of wealth to the holders of the largest reserves - mainly
OPEC.
The earth’s total original endowment of oil probably amounts to about
2.1 to 2.8 trillion barrels. As of 1998, we had already used over 800 billion barrels, and
about same amount remained in the ground as proven reserves. The rest of the
oil hasn’t been found yet, but experts believe it’s there (about .5 to 1.2
trillion barrels of undiscovered oil).
It’s generally agreed that production will begin a permanent decline
and prices will begin a permanent upward spiral when roughly half the earth’s total
endowment of oil has been consumed (1 to 1.5 trillion barrels). Based on that idea, we
could expect to see escalating prices and a permanent global decline in oil production
about 2010 (at about 1.2 trillion barrels) - which wouldn’t stack up very well
against increasing demand. But new recovery techniques will probably push the envelope out
to 2020 - perhaps even further.
If consumption continues to increase past year 2020, and we haven’t
switched to more efficient technology, it’ll take only 21 years to consume an amount
of oil equal to all the oil consumed in the entire 20th century (about 900 billion
barrels). And transportation will be consuming at least 60 percent of it. So the end of
the line for cheap crude is somewhere out there, and by switching to more efficient
transportation technologies we can extend the envelope and buy time to develop even better
solutions. We’re talking about changing over an enormous energy supply
infrastructure, a vehicle technology and manufacturing base, and an economic structure. So
it’s important to cut consumption so we can avoid serious supply and economic
disruptions later on.
Economic vulnerability and the transfer of wealth is probably a more
immediate problem. OPEC owns about 75 percent of the proven reserves, and according to the
latest estimates, they will be supplying at least half the world’s oil by 2020. And
without a switch to new technology, transportation will be using almost 60 percent of the
total oil supply. This raises important questions about energy security, price stability,
balance of payments, and the vulnerability of our economic system to political instability
in the Middle East. Is it really in our best interests rely so heavily on the Middle East
for such an essential resource? Can we afford to allow runaway balance of payments
shortfalls to put the entire industrialized world in debt to the OPEC nations? And what
are the implications for military expenses? U.S. military expenses for protecting Middle
East oil already calculate out to about $9 per barrel of imported oil (it’s true -
$9 per barrel), and today we have other options on where to get oil. But what might we
be compelled to spend when our options are more limited?
So any way you turn it, we will be facing big challenges with motor fuel
supplies in the next century, either in the form of political problems due to diminishing
supplies and regional monopolies, much higher costs, accelerated environmental damage or
some combination of all of them. So it’s in our best interests to reduce energy
consumption and move away from this total reliance on petroleum motor fuels. And it’s
also in our best interests in terms of preserving our most essential resource of all - the
health of our only planet.
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