The Decline Of Oil

Last modified on August 20th, 2009

I was just sitting here, watching a bit of Lost on the DVD player and also doing a bit of research. Like most evenings, I usually wind down my evening by reading about the state of the world, or sometimes about the latest technology. I came across this interesting article about how the US Navy is toying with the idea of turning seawater into Jet Fuel.

The reason they are considering this is because the United State’s oil production is on the downward slide. In fact, the United States reached peak oil production sometime in the 1970s I believe. Of the 30 or so countries that produce significant quantities of oil, approximately 20 of them have reached peak oil, and are now declining. What that means is that sometime soon (probably within 10 or 20 years), the world’s global oil product will peak, and begin declining.

If our current energy consumption doesn’t change, the ramifications of that event will be staggering. Analysts predict that even a 15% decline in oil production will result in approximately a 550% increase in oil prices. The affect on the global economy would be (and most likely will be) massive.

In terms of current energy production in the world, the majority is still produced by oil and gas (representing approximately 60% of global production). Coal rings in at approximately 23%, while nuclear and hydroelectric are 6% and 3% respectively. While some gas is harvested naturally, the majority of the gas we use is produced as a byproduct of oil in oil refineries, so in effect, nearly 60% of the world’s energy production is based on fossil fuels, which will shortly be on the decline globally.

If the world is to transition to alternative energy sources, it really needs to occur shortly. Here’s an interesting paragraph from Wikipedia regarding peak oil, and what may ultimately occur:

Optimistic estimations of peak production forecast the global decline will begin by 2020 or later, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used. Pessimistic predictions of future oil production operate on the thesis that either the peak has already occurred, oil production is on the cusp of the peak, or that it will occur shortly. As proactive mitigation may no longer be an option, a global depression is predicted, perhaps even initiating a chain reaction of the various feedback mechanisms in the global market which might stimulate a collapse of global industrial civilization, potentially leading to large population declines within a short period. Throughout the first two quarters of 2008, there were signs that a global recession was being made worse by a series of record oil prices.

In terms of energy consumption, the transportation sector is the largest drain on the world’s oil reserves. That sector accounts for “approximately 68.9% of the oil used in the United States in 2006, and 55% of oil use worldwide as documented in the Hirsch report. ” So in terms of reducing global oil consumption, reducing our reliance on energy inefficient vehicles is of particular import. As the internal combustion engine is extremely inefficient (approximately only 20% of the energy in the oil is used to propel the vehicle — the rest is released as heat and/or sound), a great deal of that stored energy is completely wasted. Even a theoretically perfect internal combustion engine would only have a peak efficiency of around 37%, so ultimately as a mass form of transportation, it needs to be retired.

I would hope that we would have transitioned (or be in the process of transitioning) to cleaner energy forms by the time peak oil occurs, but given how research is still being done on extending the lifetime of fossil fuels (or in the case of the US Navy, sacrificing ocean water to obtain it), I’m left to wonder if that will become a reality.