Gap Between Oil Production and Oil Discoveries

This graph (from The Oil Drum-UK) is similar to others I've seen, including some that start back around the 1880s. All the graphs have a similar profile: an era that leads to larger and larger discoveries and an era where the oil discoveries, on average, become smaller and smaller. What's useful about this graph and problematic is the dark black line that gives yearly production totals. For some time now, we have been in an era where the worldwide oil production per year exceeds the amount of new oil discovered per year. We're living off of past oil discoveries.

Now one thing about the graph that I don't like are the projections outbound from about 2006 onward (the graph was made in 2002). With the high price of oil and the rapidly growing demand for oil and the realization in most industrialized nations (if not the U.S.) that the writing is on the wall, there is an enormous surge in exploration going on at the moment. So that nice smooth falling line that is projected outward for future discoveries presents a ticklish problem. First, we don't know what in fact will be discovered as we go deeper out into the ocean or farther up into the tundra or into other remote and difficult locations to explore and develop. Maybe we'll get lucky but the odds are not good and it's our future we're talking about. Second, because there is so much exploration going on at the moment, all we may be doing is bunching together the discoveries that otherwise would have been made between 2010 and 2020. Of course, there's no way to tell. The apparently large discovery in the Gulf of Mexico is good news, but only if the larger estimates prove to be true (see this post). Note that if we bunch all the discoveries for 2006 together, including the Gulf of Mexico discovery, it may not equal this year's consumption of oil. Even when we make major oil discoveries, it's still not enough.

Nobody likes politics but it matters right now. There are Americans who still believe in the future, Democrats, independents and Republicans. But there are a number in our country, mostly Republican (but there are others) who don't seem to believe in the future, and who seem to be behaving as if there is no tomorrow, with record deficits and political games the likes of which have not been seen for generations. For the last six years, we have seen corruption, fear-mongering and an ideological agenda that feels like something out of the worst days of the corrupt 1920s and the Gilded Age of the late 19th century. The Republicans in charge bear little resemblance to the administrations of the senior Bush and Ronald Reagan. Despite Nixon's political corruption, he was far more responsible and got far more done than the current president. Although Eisenhower's presidency isn't viewed as favorably as it once was, he too accomplished far more than the current president. This country needs the tension and dialogue of two parties, but it needs two reasonably honest parties. Republican voters are going to have to start recognizing that the Republican Party is currently broken and that putting today's problems off onto the next generation is no longer acceptable.

I had a great uncle who was born in 1889, went to Stanford and became an engineer. He was a Republican through and through and I had a lot of respect for him though I had become a Democrat. He was a pragmatist first and had thought a great deal about his own area of expertise: natural gas and the pipelines to carry them. In his late thirties and early forties, he built a major natural gas pipeline from Wichita, Kansas to Chicago.

My great uncle talked a great deal with the oil people and geologists of the day. He knew the oil wasn't going to last forever but he wanted to know how much time he and others had bought for the United States before other sources of energy were developed. He was given an answer. He was proud that he had essentially solved Chicago's natural gas needs for the next 300-500 years. Or so he was told.

The natural gas figures were based on the population of the time, the average use of natural gas and what were believed to be the reserves at the time. But the country grew, other uses for natural gas were found and the reserves included numbers that were overly optimistic and also included the assumption that more reserves would be found at the rate known in the 20s and 30s.

By the 1970s, my great uncle was in his eighties but he was still as sharp as a tack. The energy crisis had come and only 45 years had passed since he built that natural gas pipeline. He had been watching the numbers for decades and he was angry. He turned to the younger generation of his nieces and nephews and quietly told them a little of his concerns and he said very emphatically, looking each of us in the eye on the days he would bring this up, "It's up to your generation to get it right." That was thirty years ago and we've been wasting time and we can no longer afford to do so.