Historian says peak oil production is still a quarter-century away

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This is off McClatchy Washington Bureau:

WASHINGTON - Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production is still about a quarter-century away, according to a new study by Pulitzer Prize-winning oil historian Daniel Yergin.

The remaining oil resource base is about 3.74 trillion barrels, according to a report released Tuesday by Cambridge Energy Research Associates, which Yergin runs. That's more than three times the 1.2 trillion barrels that "peak-oil" theorists suggest.

CERA's report, titled "Why the Peak Oil Theory Falls Down," challenges an increasingly popular view that the world is about to run out of oil. On the contrary, CERA argues that the world is likely to begin running out of oil between 2030 and the middle of the century. Even so, CERA says, efforts are needed now to push that date back, such as new oil field discoveries, new technologies, energy conservation and alternative energy sources.

This is certainly a fascinating study where more details can be found in the press release. But the CERA report will cost you quite a few barrels of oil--priced at $1,000 for each 16-page report. This debate has been going on for years between the energy conservationists, who use the peak oil theory as evidence for demanding a reduction of U.S. foreign oil imports while increasing renewable energy sources and conservation, and the Big Oil companies intent on drilling everywhere for energy (Can you say ANWR?). In reality, both sides are wrong. I doubt that the world is going to run out of oil, as the peak oil theorists predict with gloom and doom. The CERA report shows that the peak oil theorists failed to include the incorporation of new technologies into their theory--technologies "that permit drilling more than 7,000 feet below the ocean's surface or extracting oil from tar-like deposits in sandy soil found in western Canada." We certainly do not know where future oil supplies may exist on the deep ocean floor, or in unexplored areas throughout the world. But that doesn't mean that the conservationists' calls for renewal energy production and conservation should be discarded--if anything, the United States should embark on a program to reduce its imports of foreign oil through conservation and renewed energy sources. Because there certainly is one argument to show why the U.S. should reduce its addiction to foreign oil, and that argument is Iraq.

At the same time, this report isn't the magic bullet for Big Oil. Increasing oil production isn't the magic cure-all for America's energy problems. One prime example is that for all the marketing spin showing how many steps Big Oil can take in protecting the environment, money and economics will always trump the environment for Big Oil. British Petroleum had to shut down its Prudhoe Bay operations due to pipeline corrosion. What is more, federal investigators have turned up documents showing that BP knew about the pipeline corrosion problems for years, and failed to do anything about the problem. In other words, cost-cutting on maintenance and repairs in order to increase profits were more important to BP than maintaining the environment surrounding the pipelines. In Canada, oil companies plan to strip-mine 50 percent of the entire 3,450-square-kilometer McClelland Lake Wetland Complex for oil and tar sands. The McClelland Lake Wetland Complex " is home to numerous rare plants, including five insect-eating species." This type of energy mining is already creating controversy between the oil companies and environmentalists. More than 7 million gallons of oil were spilled in 44 oil spills,ranging from industrial plants, oil storage depots, and other facilities in Louisiana in the aftermath of Hurricane Katrina. These are just a few of the problems between the oil companies and their environmental record. There are also problems of corruption within the oil companies, where oil and energy companies have even scammed the federal government out of energy royalties, while the Bush administration has turned a blind eye away from regulation and enforcement. And there are certainly other examples of corruption within U.S. oil companies here, here, and here. Power corrupts.

So what does this report mean? It means that while the world may not run out of oil until 2030, the United States still has a problem with its dependence upon foreign oil. It has been our addiction to foreign oil that has caused us to become involved in a disastrous war in Iraq. We are going to have to find a way to balance the development of renewable energy sources, conservation, and the exploration of new oil reserves in order to resolve our energy problems. And right now, I don't see that happening for a long time.