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THE END OF THE AGE OF OIL
By David Goodstein
Published by CalTech News, California Institute of
Vol. 38, No.2, 2004
is adapted from a talk that CalTech vice provost and
professor of physics and applied physics David Goodstein
presented at an April 29 program of the Institute
support group, the CalTech Associates. Goodstein’s
new book, Out
of Gas: The End of the Age of Oil, was published
in February by W. W. Norton.
In the 1950s,
it was not Saudi Arabia but the United States that
was the world's greatest producer of oil. Much of
our military and industrial might grew out of our
giant oil industry, and most people in the oil business
thought that this bonanza would go on forever. But
there was one gentleman who knew better. He was an
oil exploration geologist named Marion King Hubbert.
In about 1950,
Hubbert realized that the trajectory of oil discovery
in the continental United States was going to be a
classic bell-shaped curve, for the decades from 1910
to 1970, in billions of barrels per year (see figure
1, below). He also saw that there would be a second
bell-shaped curve that would represent production,
or consumption, or extraction. The oil industry likes
to call it "production," but the industry
doesn't really produce any oil at all. It does, however,
reflect the rate at which we use the oil up. Perhaps
you could call it supply.
Hubbert realized that using what
he knew in 1950 about the history of discoveries,
along with what was already known about consumption,
and a little mathematics, he should be able to predict
that second bell-shaped curve. And so he did (see
figure 2, below). The red, bell-shaped curve is the
kind of curve he predicted. The black points are the
actual historical data, and the uppermost point represents
what has come to be known as Hubbert’s Peak.
Obviously, he was doing something right.
The situation worldwide is a little
less well-determined. A third graphic provided by
the energy conglomerate BP, shows what the world's
known crude oil reserves are (see figure 3, left-hand
graph, below). The amount that we have now is a trillion
barrels of oil. So people in the industry might say,
we have a trillion barrels just sitting there waiting
to be pumped out of the ground; we're using it up
at a rate of about 25 billion barrels a year, and
so we have 40 more years to go there's nothing
to worry about. But as Hubbert has shown us, that's
the wrong way of looking at it.
Before we leave
that curve, though, I want to point out that a sudden
jump of 300–400 billion barrels of oil in OPEC
(the Organization of the Petroleum Exporting Countries)
reserves occurs in the late 1980s (see figure 3, left-hand
graph, above). But there were no significant discoveries
of oil in OPEC countries during that period. What
happened instead is that OPEC changed its quota for
how much each country could pump on the basis of what
it claimed in reserves, and politicians discovered
400 billion barrels of oil without ever drilling a
hole in the ground! This helps us to understand how
undependable these numbers are for worldwide proven
As you can see,
the curve that traces the historic record of oil discovery
peaks around 1960. In other words, Hubbert's peak
for oil discovery came and went 40 years ago.
The curve for
oil usage, as you can see, is a rising curve and will
become a bell-shaped curve eventually. Note that for
the last quarter century, we've been using oil faster
than we have been discovering it. World reserves should
have decreased during that time by about 200 billion
barrels. Instead, as we've seen, they've increased
by 400 billion barrels. In any case, it should be
possible, given this much information, to make a prediction
similar to the one that Hubbert made for the continental
United States for worldwide oil production.
One such estimate
was published in 1998 in Scientific American. It predicts
that we will have a worldwide maximum in oil production
just about now around the middle of the decade
2000-2010. What will happen when we reach that peak
we don’t really know. But we had a foretaste
in 1973 and '79 when the OPEC countries took advantage
of the supply shortage in the United States and shut
down the valve a bit. What happened, as you may recall,
is that we had instant panic and despair for the future
of our way of life, and mile-long lines at gas stations.
We don't know
what's going to happen at the next peak, but we do
know that those past peaks were artificial and temporary.
The next one will not be artificial and it will not
However, we have
to use caution in evaluating these types of predictions.
One crucial quantity that goes into making such an
estimate is knowing how much oil Mother Nature originally
made for us- that is, how much oil was in the
ground before we ever started pumping it. The Scientific
American estimate used 1.8 trillion barrels of oil
as the baseline number. Today it looks like 2.1-2.2
trillion barrels might be more accurate. That number
the total amount of oil that ever existed tends
to increase with time for a variety of reasons.
First, new technology
and new discoveries have exactly the same effect
they both make more oil available. Secondly, as oil
becomes scarcer and the price goes up, more oil becomes
available at the increased price, because you can
invest more capital into pulling it out of the ground.
And finally, these estimates depend to some extent
on those proven reserve numbers and, as we've already
seen, those numbers are not very reliable. Nevertheless,
the central idea of the Hubbert Curve is certainly
correct: the supply of any natural resource invariably
rises from zero to a maximum point, and then it falls
forever. Oil will behave in the same way.
In 1997, Kenneth
Deffeyes, a former Shell Oil geologist who's now an
emeritus professor of geosciences at Princeton, published
a book he entitled Hubbert's Peak The Impending
World Oil Shortage. In it, Deffeyes said he knew
that Hubbert had been right and that the peak for
domestic production had been reached when he saw this
sentence in 1971 in the San Francisco Chronicle:
"The Texas Railroad Commission announced a 100%
allowable for next month."
that sentence, the Texas Railroad Commission was the
quaintly named cartel that controlled the U.S. oil
industry by making strategic use of the excess capacity
for pumping in Texas. When the commission said, "100%
allowable for next month," it meant that there
was no longer any excess capacity. They were pumping
flat-out, and therefore Hubbert's Peak had been reached.
Ever since reading
this, I've thought that the signal that the worldwide
peak had been reached would be when we found out that
Saudi Arabian production had peaked. For the last
few decades, the Saudis have been using excess pumping
capacity to manipulate the world oil market in exactly
the same way the Texans once did.
Well, on February
24 of this year, a story appeared on the front page
of the New York Times entitled "Forecast
of Rising Oil Demand Challenges Tired Saudi Fields."
Among other things, the article said that Saudi Arabia's
oil fields are in decline, prompting industry and
government officials to raise serious questions about
whether the kingdom will be able to satisfy the world's
thirst for oil in the coming years.
This is a New
York Times story, so it's very long, as many
Times stories are, and it's written in a
style in which each successive paragraph is contradicted
by the next paragraph. This is called "balanced
reporting." Sure enough, much farther down in
the article, we find these words: "Some economists
are optimistic that if oil prices rise high enough,
advanced recovery techniques will be applied, averting
supply problems." But here comes the contradiction
in the next paragraph, "But, privately, some
Saudi oil officials are less sanguine."
I don't know
whether we will look back years from now and say that
this was the beginning of the end of the age of oil.
We’re much too close to it to tell, and our
figures are, overall, much too uncertain. But, to
those people who are aware of the Hubbert's Peak predictions,
as the writer of this article apparently was not,
this was a chilling report.
us that there can never be a gap between supply and
demand because the process is regulated by price.
That's never been true in the case of oil, because
it has always been controlled by cartels, first in
Texas and later by OPEC. However, once the peak occurs,
OPEC will lose control of the situation, and the price
mechanism will kick in with a vengeance. But the supply
can keep up with the price only if there is something
asked, what about replenishing our oil reserves through
deep-ocean exploration? I'm already factoring in close-to-shore
oil production, but the deep oceans are essentially
unexplored and, it's true, we don't know whether there's
any oil out there. Over the last hundreds of millions
of years, oil typically has been manufactured in places
that are rich in life, which deep oceans are not.
But the landmasses have moved around over geologic
time, so there may be deep-ocean oil reserves.
Even so, deep
oceans are technically extremely difficult places
to drill for oil. That leaves us with only two remaining
reservoirs the South China Sea, which currently
has seven countries claiming mineral rights to it;
and Siberia, which has very bad access problems. And
those resources, of course, are finite also. So let's
see what else there is to use, aside from oil.
The word "oil"
covers more than just the conventional light crude
that we've been pumping up to now. It also covers
heavy oil, oil sands, and tar sands. Heavy oil is
essentially what's left behind in the field after
you pump the light crude away. And, of course, if
you put more money in that's the price mechanism
you can usually squeeze a little more oil out of any
field. But it's both more costly and more time-consuming
to get that oil out. And the more you pump out, the
heavier it gets.
Natural gas could
be a very good substitute for oil. Cars that are not
very different from those we drive today can run on
compressed natural gas, and it's a particularly clean-burning
fuel. But if we turn to natural gas in a major way
to replace diminishing supplies of oil, it will only
be a temporary solution. The Hubbert Peak for natural
gas is only a decade or so behind Hubbert's Peak for
Oil was created
when so-called source rock, full of organic inclusions,
sank deep within the earth. The inside of the earth
is heated by natural radioactivity, and the deeper
you go, the hotter it gets. This source rock sank
just deep enough into the heated interior for the
organic matter to get cooked into oil. Rock that sank
deeper got overcooked and became natural gas. Rock
that sank to a more shallow level became shale oil,
which is essentially unborn oil that can be made into
a fuel by strip-mining, crushing, and heating the
rocks until you generate a usable liquid. People who
have invested many millions of dollars into trying
to exploit this resource have come to the conclusion
that it will probably always be energy-negative, meaning
that you will always have to put more energy into
acquiring and processing it than you will ever get
out of it.
is a solid that looks like ice, but that burns if
you ignite it. It consists of methane trapped in a
sort of cage of water molecules and it gets created
when methane comes into contact with water under very
high pressure at very low temperatures close to the
freezing point of water. Nobody has any idea of where
all it is, how much there is, whether it can be mined,
or how it could be used all we know is that
this stuff exists.
is coal. We are told that there is enough coal in
the ground for hundreds, maybe even thousands of years,
at the present rate of use. The fact that these estimates
range over a factor of ten tells you immediately that
nobody has the foggiest notion of how much coal is
actually available. But even those projections might
be considered reliable, compared to the second part
of that optimistic sentence: "at the present
rate of use"! We'll get to that in a moment.
The largest coal
deposits are in the United States, and China and Russia
have very large reserves as well. Coal can be liquefied
and made into a substitute for oil. That was done
in Nazi Germany during World War II, and in South
Africa under apartheid. That alone should tell you
that you have to be fairly desperate to do it, but
it can be done.
But, coal is
a dirty, dirty fuel. It often comes with nasty impurities,
including mercury, arsenic, and sulfur. The mercury
that accumulates in the bodies of tuna or swordfish
and which has led to FDA warnings to limit our consumption
of these fish originates in coal-fired power
plants in the United States. We use now about twice
as much energy from oil as we do from coal, so if
you wanted to mine enough coal to replace the missing
oil, you'd have to mine it at a much higher rate,
not only to replace the oil, but also because the
conversion process to oil is extremely inefficient.
You'd have to mine it at levels at least five times
beyond those we mine now a coal-mining industry
on an absolutely unimaginable scale.
And even that
doesn't take into account the world's increasing population,
or the fact that nations like China and India want
to have a higher standard of living, which means burning
more energy. Finally, it doesn't take into account
the Hubbert's Peak effect, which is just as valid
for coal as it is for oil. Long before we have mined
the last ton, we will have started to deplete our
ability to get the stuff out of the ground. So, it's
a very good bet that the governing "rate of use"
number I mentioned earlier is not hundreds or thousands
of years, and that no more than one-tenth of that
timeframe represents a realistic estimate.
What all this
suggests is that if we accept the economists' solution
and just let the marketplace do its thing as we make
use of all the fossil fuel we can, we'll start running
out of all fossil fuels by the end of this
So, what does
the future hold? Well, for one thing, there will be
an oil crisis very soon. Whether that means it has
already begun or won't happen until later in this
decade or sometime in the next decade, I don't know.
In my view, the numbers are not dependable enough
for us to say. However, while the difference between
those estimates may be very important to us, it's
of no importance at all on the timescale of human
history. Either we, our children, or perhaps our grandchildren,
are in for some very, very bad times. If we turn to
all the other fossil fuels and burn them up as fast
as we can, they will all probably start to run out
by the end of the 21st century. Assuming that our
planet remains habitable after such a vast consumption
binge, we will have to invent a way to live without
fossil fuels. (See sidebar "Too
Hot To Handle?")
How about hydrogen?
Both President Bush and California governor Schwarzenegger
have publicly embraced hydrogen as a solution to our
fuel problems. But there are only two commercially
viable ways of making hydrogen. One is to make it
out of methane, which is a fossil fuel. The other
is to use fossil fuel to generate the electricity
that you need to electrolyze water and get hydrogen.
The economics of doing that are such that you end
up using the equivalent of six gallons of gasoline
to make enough hydrogen to replace one gallon of gasoline.
So this solution is not a winner in the short run.
In the long run, if the problem of harnessing thermonuclear
fusion can be solved and we have more power than we
know what to do with, you could use that form of energy
to make hydrogen for mobile fuel. I'll get to that
a little later.
There is also
wind power, which many now see as a viable energy
alternative. And it is, but only to a limited extent.
In regions like northern Europe, where fossil fuels
are very expensive and the wind is really strong,
wind power will someday come to rival hydroelectric
power as a source of energy. But there are relatively
few places on earth where the wind blows strongly
and steadily enough for it to be a dependable energy
source, and people don't really like wind farms
they're ugly and they're noisy. Wind power will always
be a part of the solution. But it's not a magic bullet.
It's not going to save us.
In recent years,
the debate over nuclear power has revived, with proponents
maintaining that we can find environmentally sound
and politically acceptable ways to deal with the waste
and security hazards. But even assuming that to be
true, the potential is limited. To produce enough
nuclear power to equal the power we currently get
from fossil fuels, you would have to build 10,000
of the largest possible nuclear power plants. That's
a huge, probably nonviable initiative, and at that
burn rate, our known reserves of uranium would last
only for 10 or 20 years.
As things stand
today, the only possible substitutes for our fossil-fuel
dependency are light from the sun and nuclear energy.
Developing a way of running a civilization like ours
on those resources is an enormous challenge. A great
deal of it is social and political we're in
the midst of a presidential election, and have you
heard either party say a word about this extremely
important subject? But there are also huge technical
problems to be solved. So, you might well ask, what
can CalTech do to help?
solution to our energy problem would be to master
the power of controlled thermonuclear fusion, which
we've been talking about doing for more than half
a century. The solution has been 25 years away for
the past 50 years, and it is still 25 years away.
Beyond those sobering statistics, there are at least
five or six schemes for harnessing fusion energy that
I know of. One of them, called the spheromak, is studied
here at Caltech in an experimental program run by
Professor of Applied Physics Paul Bellan and his research
In the spheromak,
electric currents flowing in a hot ionized gas
otherwise known as a plasma interact with magnetic
fields embedded in the plasma. As these fields and
currents push the plasma around, new fields and currents
are created. There's a sort of self-organizing interaction
occurring. You can see in this sequence of snapshots
below, starting from the top, that the plasma is organizing
itself into a jet and then a kink develops in the
jet. This is something that happens all by itself,
and it's not something that happens only occasionally
the gas always self-organizes like that. After the
kink develops, it breaks away from the body of the
jet as a doughnut. If you can find a way to maintain
that doughnut and keep it going that is to pump
in enough energy to keep it from decaying the
doughnut has the perfect geometry required for containing
a hot plasma undergoing thermonuclear fusion.
Fusion research at Caltech.
this objective is far off. The existing apparatus
is much too small to reach the hundred million degree
temperatures needed to generate power. The Bellan
team is studying the fundamental physics of the self-organizing
process in the hope it can be used to create and sustain
the desired fusion plasma confinement geometry in
a reliable, controlled manner.
group at Caltech whose efforts are aimed largely at
the other alternative solar energy. Their program
is called Power the Planet: Caltech Center for Sustainable
Energy Research. Members include applied physicist
Harry Atwater, chemists Harry Gray, Nathan Lewis,
and Jonas Peters, and materials scientist Sossina
our former provost Steve Koonin recently stepped down
from the provostship and took a leave of absence from
the Caltech physics faculty to become chief scientist
at BP. BP, formerly British Petroleum, is one of the
largest energy companies in the world, and so he now
has one of the most important energy positions in
The fact that
these and similar scientific and technical efforts
are under way at Caltech and elsewhere are encouraging,
but they are not enough. What we really need is leadership
with the courage and vision to talk to us as John
F. Kennedy did in 1960, when he pledged to put a man
on the moon by the end of the decade. It's the same
kind of problem. We understand the basic underlying
scientific principles, but we have huge technical
problems to overcome.
If our leaders
were to say to the scientific and technical community,
"We will give you the resources, and you
right now, even before it becomes imperative
will find a way to kick the fossil-fuel habit,"
I think that it could be done. But we have to have
the political leadership to make it work