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Mechanical Engineering 129(10), 40 (Oct 01, 2007) (1 page) doi:10.1115/1.2007-OCT-4

Abstract

This article highlights that there are plenty of hysterical headlines about how the world is about to run out of oil, and it is just as easy to find spokesmen who will say that there is petroleum enough for everyone, now and in the future. Indeed, while oil production may be approaching a peak, there are probably at least a trillion barrels left to be pumped. In contrast, no matter how much oil is around, it is found in increasingly difficult and expensive places to exploit. A more troubling pattern can be seen in the oil production and consumption figures for Indonesia. Overtime, a greater and greater share of oil produced is being used by the producers, and less is available for export. Even so, the international trade in petroleum is 50 percent bigger now than it was in 1980. But if, as seems likely, there will be fewer exporting nations in the coming decades, this could become a problem.

Article

Iran is the second largest oil producer among the Organization of Petroleum Exporting Countries member states. It was somewhat jarring, then, to read the warning, issued by the outgoing Iranian petroleum minister, that Iran was facing a looming oil crisis. "I am ready to prove that if the fuel situation continues along current trends, we will face an energy crisis in the future," Kazem Vaziri Hamaneh was quoted by the news agency Agence France-Presse. "The current pattern of consumption is a disaster for the country."

There are plenty of hysterical headlines about how the world is about to run out of oil, and it's just as easy to find spokesmen who'll say that there is petroleum enough for everyone, now and in the future. Neither extreme is likely right. Indeed, while oil production may be approaching a peak, there are probably at least a trillion barrels left to be pumped. On the other hand, no matter how much oil is around, it is found in increasingly diffi. cult-and expensive-places to exploit.

What is more important is how much access we'll have to that oil. Most of the nations with the largest economies, such as the United States, China, Japan, Germany, and France, are dependent on oil imports. And to that list, you can now add the United Kingdom. As recendy as the mid- 1990s, the u.K. was pumping a million barrels per day more than it could consume from its large North Sea fields, based on data from the Energy Information Administration. Since then, production has fallen by about a third, but consumption is remaining steady, so there's no longer any petroleum to export.

A more troubling pattern can be seen in the oil production and consumption figures for Indonesia. That country was a major oil exporter, and even though production is slumping, Indonesia is still pumping more than a million barrels a day. But petroleum consumption, spurred by gasoline prices as low as 64 cents a gallon as recendy as 2000, has skyrocketed over the last 20 years and has finally overtaken production. Indonesia, a long-time OPEC member, no longer has petroleum to export unless it finds a way to slash consumption.

Subsidies are a common feature in oil-exporting countries. Last November, gas in Venezuela was 11 cents a gallon. In Kuwait, it was 83 cents, and gas was just 50 cents a gallon in Libya. Without the signal of higher prices, overconsumption is hard to stop. Compare the oil consumption rates since 1980 by the 12 current OPEC members (not all were members at that time) to that of the rest of the world: It seems clear that having oil to burn leads to, well, burning a lot of oil. Overtime, a gre;lter and greater share of oil produced is being used by the producers, and less is available for export. Even so, the international trade in petroleum is 50 percent bigger now than it was in 1980. But if, as seems likely, there will be fewer exporting nations in the coming decades, this could become a problem.

It may not be a problem for the biggest importers, though. If anything, they are having an easier time of getting the petroleum they need. Since 1980, the amount of oil purchased by today's nine largest importing nationsthe U.S., Japan, China, Germany, South Korea, France, Italy, India, and Spain-has increased by 58, percent. These nations have outstripped other importing countries and of the 15.6 million barrels-a-day increase in exportable oil since 1980, the Big Nine purchase 78 percent.

What the world will likely wind up with, then, is two kinds of oil-using nations: those that produce enough to export and can use as much as they want, and the rich nations that can afford to import the dwindling supplies of oil available on the world market. Everyone else is going to be squeezed until they give up on oil. What they'll turn to then, no one knows

Copyright © 2007 by ASME
Topics: Matter , Petroleum
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