Philippines Ill-Prepared for Global ‘Peak Oil’
The world is consuming
more than what is available. This is not in reference to food, but oil.
Experts say that no new major oil discoveries are expected in the future,
but the addiction to oil, a non-renewable resource, still increases.
BY AUBREY SC MAKILAN
Bulatlat
Well-known geologist
Kelvin Rodolfo warns that global oil production is nearing its peak after
which it will rapidly decline. He called on all governments, including the
Philippines, to take heed. He said, however, that the Philippine
government seems too preoccupied with dirty politics to care.
In a forum last Sept.
28 at the University of the Philippines (UP) Asian Center in Diliman,
Quezon City, Rodolfo said it is not impossible to see oil prices shoot up
to $300 per barrel a decade from now due to what is called “Peak Oil.”
Rodolfo
is professor emeritus at the University of Illinois in Chicago and an
adjunct professor at the National Institute of Geological Sciences (NIGS)
at UP Diliman.
Peak Oil
The
“Peak Oil” – referring to the period when
world oil production reaches a peak and
then rapidly declines – was predicted for the
United States (U.S.) by M. King Hubbert in 1956. Hubert said oil discovery
in the U.S.
peaked in the 1930s while production peaked in the 1970s.
Roldofo
calculated that if the peak of the discovery was between 1963 and 1964,
involving about 60 billion barrels of oil with a lag time of 40 years, the
peak of global production is right about now. He said oil discoveries will
rapidly decline after this.
Rodolfo
told Bulatlat that the oil that is hardest to extract cannot be
used because extracting uses up more energy than it can yield. “There is
more competition for it,” he said.
In the
beginning, oil was easy to find and extract. But as it is used, the amount
in storage rapidly decreases. Half of the oil that is most easily found
and pumped is used up first. This accelerated use of oil has reached its
limit, leading to “Peak Oil” or when half of all oil reserves is gone.
After
this, it gets harder and harder to find and extract the remaining oil,
said Rodolfo. And even if new fields are found, he said, the time of Peak
Oil could not be delayed very long. This was affirmed in the book
Hubbert’s Peak: The Impending World Oil Shortage by Kenneth Deffeyes,
who wrote that “world oil production will peak in this decade – and there
isn’t anything we can do to stop it.”
Consumption
In his presentation,
Rodolfo also revealed that people on earth consume
80 million barrels of oil a day – the amount
earth stored in nine million years.
Physics Prof. Kjell
Aleklett of Uppsala University in Sweden and president of the Association
for the Study of Peak Oil & Gas (ASPO), said in his article
An Oil Supply Tsunami
Alert
that 50 years ago, the world was consuming four billion barrels
of oil per year and the average discovery was around 30 billion. Today the
world consumes 30 billion barrels per year and the discovery rate is
approaching four billion barrels of crude oil each year.
Rodolfo
said that geologists estimate that only two trillion barrels of oil had
accumulated in the Earth in 600 million years before humanity started
using it. This translates to an accumulation rate of only 3,333 barrels
per year, making oil essentially a non-renewable resource.
The
“addiction to oil,” as Rodolfo described, is much stronger in the U.S.
Accordingly, Americans are the
leading oil consumers.
The
3,300 barrels of oil every year can support only 146 Americans because of
the U.S.’ daily consumption of 21.9 million barrels or an annual 8.004
billion barrels.
Compared to the Filipinos whose daily use of oil is 338,000 barrels or an
annual of 123,370,000 barrels, the
U.S.’
yearly oil accumulation can support 2,283 Filipinos. In short, one
American uses what 16 Filipinos consume, equivalent to 27 barrels per
American or 1.46 barrels per Filipino.
Oil wars
This
“oil addiction” was also the reason behind U.S. invasion and occupation of
Iraq. “The true addict will do whatever it takes to get his drugs, even
kill if necessary,” Rodolfo said.
American officials
knew the U.S. would suffer from the effects of tightening oil supplies. In
2001, they established an Energy Task Force, a secret body whose only
publicly released documents consist largely of information on the
oil-producing fields of Iraq and neighboring countries.
In an article posted
at the Grinning Planet website, Richard Heinberg identified four
types of war-for-oil conflicts likely to happen due to Peak Oil.
First is conflict
between rich oil-consuming nations and poorer oil-producing nations, where
a powerful oil-importing nation deems an oil-exporting nation to have an
"unacceptable" political regime; like what happened to Iraq and what can
possibly happen to Venezuela.
Second is conflict
between consuming nations. Saudi Arabia’s decision to give almost all of
its recent long-term oil contracts to China rather than the U.S. has
bothered U.S.-based oil companies.
Third, civil wars
within producing nations for control of resources will likely to occur,
according to Heinberg. This is already happening in Venezuela and Nigeria,
and increasingly likely to occur in Middle East
countries including Iraq.
Last is the
asymmetrical warfare, also referred to as “terrorism,” which may arise
between rich oil-consuming nations and non-state entities in oil-producing
nations.
Meanwhile, Rodolfo said that the mere idea
that there could be oil in a certain area already meant conflict.
He fears that this war for oil is possible
in the Spratlys group of islands in South China Sea. At present, China,
Philippines, Malaysia, Taiwan and Vietnam have sent their defense forces
to guard their claims in the area.
Bogus oil
Another scheme of
companies and governments to suit their
commercial and financial needs is manipulating
reserve figures, Rodolfo said.
He pointed out that
the problems with reserve estimates are the
reliance on distorted estimates of reserves, pretension that production
will remain constant, and, most importantly, assumption that the last oil
can always be pumped just as quickly as today.
C.J. Campbell, an
exploration geologist, said companies refer to what they call “proved”
reserves which are much less than what the field will eventually deliver.
Some call it “political barrels.”
Even the Organization
of Petroleum Exporting Countries (OPEC) did unreliable reporting in the
late 1980s, where huge increases were based on the so-called quota wars --
quota being partly based on reserves – while the reserves in these
countries remained so constant even with high production rates.
Rodolfo
scored the popular misconception that “technology and science will always
be able to find more oil.” Because of this notion, some looked at oil
reserves as growing which they
attribute to technology. But in reality the growth was just in the
reporting, he said.
In fact, according to
the BP Statistical
Review of World Energy of June 2004,
proved oil reserves at
end the of 2003 is more likely to be from
750 billion to 850 billion barrels only
and not 1,148 billion barrels as previously claimed.
This blown-up figure
resulted from the revised Middle East reserves of 726.6 billions of
barrels, which in reality should only be more like 350 billion to 400
billion barrels.
“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!” said David Goodstein, Caltech vice provost and professor of
physics and applied physics.
The false inflation
of OPEC Reserves from 1982 to 1990 involved Iraq, Kuwait, Abu Dhabi,
Dubai, Iran, Venezuela, United Arab Emirates and the Kingdom of Saudi
Arabia.
Heinberg said that by
over-estimating their reserves, OPEC member-countries have previously been
given incentive to boost their exports which was based on their level of
stated reserves.
All in all, Rodolfo
said, about 400 billion barrels were not really found or are considered
“bogus oil.”
Meanwhile, Rodolfo
said that the amount of remaining oil can be predicted from the decline of
aging fields, from the diminishing returns on exploration in larger
regions, extrapolating the size of new fields into the future, and
matching production to earlier discovery trends.
The real score
Rodolfo said that the
exploration success in the Middle East, where all the giant oil and gas
fields are, has ended decades ago. He said no major exploration success
has transpired since the 1960s, and that almost all production comes from
the very old fields while some key fields never worked and still others
water out.
While the OPEC sees
the spare production capacity – how much they could ramp up production if
they wanted to – to meet higher oil demand in the future, Heinberg said
that it is now nearly non-existent. “They are currently producing almost
flat-out from their existing wells,” he said.
In Filipino, Rodolfo
said, it’s called “sagad na” (exhausted).
“We are consuming
more than what we are producing. That is a bad sign,” he said. “There is
no way prices are not going to go up.”
While science and
technology can find oil, Rodolfo said it can also tell that there is no
oil.
Extrapolating the
downward oil discovery slope of the last 30 years, Aleklett said about 134
billion barrels will be found over the next 30 years. Although this “would
not be a bad achievement,” he said, this still “comes short of providing
sufficient new oil discoveries to meet the International Energy Agency (IEA)
scenario.” The IEA projects a consumption of 1,000 billion barrels over
the next 25 years.
By studying the
production pattern from existing oil fields, Aleklett added that the
annual decline averages from three to five percent. He explained that all
oil fields which at present produce 84 million barrels per day will only
produce 80.6 million barrels per day next year and 30 million barrels per
day in 2030.
The IEA predicted the
consumption in 2030 as 121 million barrels per day, which translates to a
shortage of more then 90 million barrels per day in new production. This
means, said Aleklett, "the world needs 10 new Saudi Arabias."
Of the 65 largest
oil-producing countries in the world, 54 have passed their peak
production, just like in East Texas, and are now experiencing the decline.
Five more countries will peak in their oil production six years from now:
Saudi Arabia, Iraq, Kuwait, United Arab Emirates, Kazakhstan and Bolivia.
According to Aleklett,
using Hubbert’s method to compute world oil
production puts the peak year for world oil between 2004 and 2008. But
none of the political leaders seem to be paying attention. If the
predictions are correct, there will be enormous effects on the world
economy.
In the case of the
Philippines, Rodolfo lamented, “Ang mga solusyon sa krisis ng Peak Oil
ay naghihintay ng pansin ng pamahalaan ngayon na nakabaon sa kalokohang
pamumulitika.” (The solution to the crisis of Peak Oil is now awaiting
the attention of the government which is preoccupied with stupid
politics.) Bulatlat
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