Joe Sparano: Peak Oil Speculation Diverts Focus on Energy Reality

http://www.noozhawk.com/noozhawk/article/joe_sparano_peak_oil_speculation_diverts_focus_on_energy_reality/

By Joe Sparano

Alternative sources are important, but they can't compete with the need for and reliance on domestic oil and gas

A recent commentary by Walter Kohn and Tam Hunt about the theory of peak oil recycled a litany of conjecture and dire predictions about the state of the world’s energy supplies. I’d like to respond.

The peak oil theory is not new, nor is it provable or disprovable. In that regard, arguing about when the world will run out of oil is like arguing about how many angels can dance on the head of a pin.

We cannot know the answer and the argument is not relevant to the important and urgent energy issues that we face today. Those issues instead require factual evidence and thoughtful analysis.

There is an abundance of information from very credible sources about the supply of oil throughout the world that remains available for development. The information is based on science and hard evidence — not speculation.

The most recent U.S. Geological Survey estimate puts the remaining discovered and undiscovered global reserves at 1 trillion to 2 trillion barrels of oil, far larger than previously thought. Of the total world endowment (potential supply) of 5.6 trillion barrels of oil, USGS calculated humans had consumed just 18 percent as of 2000.

And, here’s what the International Energy Agency World Energy Outlook 2008 said: “The world’s total endowment of oil is large enough to support the projected rise in production beyond 2030 in the reference scenario.”

The Kohn-Hunt commentary cites declining U.S. oil production as evidence of diminishing reserves. This is patently untrue.

Politics and government policies have prevented American energy companies from accessing huge volumes of identified domestic reserves and expanding the production of oil and natural gas in vast regions of our country.

According to USGS estimates, there currently are 116 billion barrels of oil and 650 trillion cubic feet of natural gas on federal lands on- and offshore available for U.S. consumers, that have been off limits because of politics and government policies. That is more than five times the current amount of U.S. proved oil reserves and equal to almost 30 years of natural gas supplies.

It’s ironic that Messrs. Kohn and Hunt cite Cambridge Energy Research Associates to support their theory. CERA recently concluded that peak oil arguments “are based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.”

“This is the fifth time that the world is said to be running out of oil,” CERA said. “Each time — whether it was the ‘gasoline famine’ at the end of WWI or the ‘permanent shortage of the 1970s — technology and the opening of new frontier areas has banished the specter of decline. There’s no reason to think that technology is finished this time.”

Moreover, as I have indicated previously, the theory of peak oil is not the real issue. The important issue people in America and in California must face is: How can we safely and intelligently increase our energy security and create a lasting, sustainable energy future?

We can do that, first, by making sure we are fully utilizing our own domestic energy resources in ways that respect the environment and communities in which those resources are located. The petroleum industry in California has demonstrated it can develop and bring to market oil and natural gas from onshore and offshore areas safely and without harm to the environment.

According to the U.S. Minerals Management Service, since 1970 our industry has produced more than 1 billion barrels of oil from waters off California and spilled 850 barrels. More oil seeps naturally into the ocean off Santa Barbara each week than has been spilled by the petroleum industry in the last 39 years.

Second, we need to diversify our energy portfolio. Petroleum companies and others are working diligently to research, develop and commercialize a broad range of new fuels and technologies that might someday augment or even far in the future replace petroleum.

But, we must be realistic about the time it will take to develop those alternatives and the large volumes of new energy that will be required to meet the nation’s and the world’s growing demand for energy.

According to the most recent Energy Information Administration’s Annual Energy Outlook, U.S. energy demand is expected to increase 9 percent between now and 2030. During that time, the amount of energy we get from biofuels, wind and solar is expected to increase dramatically.

But even with dramatic growth of those alternative energy sources, oil and natural gas are expected to still provide 55 percent of our energy needs in 2030. Coal and nuclear power are projected to provide another 31 percent. That leaves a bit less than 14 percent of our total energy needs in 2030 being supplied by hydro-electric power and all forms of alternative fuels — combined.

Finally, we can do a great deal to build a sustainable energy future by conserving the energy we are using by using it more wisely, and by looking for and embracing improved energy efficiencies, both at the industrial and commercial level as well as in our homes.

Building a secure and sustainable energy future will take a great deal of thought, heavy lifting and cooperation. It is a major challenge for our society. Colorful and threatening speculation about an energy apocalypse has no place in that challenging future.

— Joe Sparano is president of the Western States Petroleum Association. The Sacramento-based organization represents the petroleum industry in California and five other Western states.

http://www.noozhawk.com/noozhawk/article/joe_sparano_peak_oil_speculation_diverts_focus_on_energy_reality/