Forty Years of Decline
Our Energy Sources
The analysis of our oil supply starts from the recognition that it is finite, non-renewable, and subject to effects which will result in a declining production rate in the near future. This situation is popularly known as Peak Oil. The key concept of Peak Oil is that after we have extracted about half the total amount of oil in place the rate of extraction will reach a peak and then begin an irreversible decline.
There is much debate over when we should expect global oil production to peak and what the subsequent rate of decline might be. While the rate of decline is still hotly contested, the timing of the peak has become less controversial. Recently a number of very well informed people have declared that the peak has arrived. This brave band includes such people as billionaire investor T. Boone Pickens, energy investment banker Matthew Simmons (author of the book "Twilight in the Desert" that deconstructs the state of the Saudi Arabian oil reserves), retired geologist Ken Deffeyes (a colleague of Peak Oil legend M. King Hubbert) and Dr. Samsam Bakhtiari (a former senior scientist with the National Iranian Oil Company). This view is also supported by the extremely detailed analysis published by the Energy Watch Group mentioned above.
Figure 1: Global Oil Production, 1965 to 2050
The supply situation with natural gas is very similar to that of oil. This similarity makes sense because oil and gas come from the same biological source and tend to be found in similar geological formations. Gas and oil wells are drilled using very similar equipment. The differences between oil and gas have everything to do with the fact that oil is a viscous liquid while natural gas is, well, a gas.
Oil and natural gas are the world's primary fuel sources, used for both transportation and heat. Together they supply a full 60% of the energy currently used by humanity. According to this model, their combined energy peak will come in 2012, at 6679 Mtoe. By 2050 they will be producing a combined energy of only 1386 Mtoe. This represents a drop of 80%. To the extent that we cannot replace this shortfall through novel uses of electricity from other sources, this decline represents an enormous challenge. It is a challenge that seems destined to alter the fundamental shape of our civilization over the next three or four decades.
Part 4: Our Energy Sources (con't)