Black Gold

How many times in the past has someone suggested that we "are about to run out of oil?" Quite a few times, I think. I hold the minority opinion that we are entering an era, not of "running out of oil," but of running out of cheap, easy to access oil. While I have followed the idea of peak oil for some time, I hasten to add that this idea is not, nor has is ever been, about running out.

It is about the inability of our global supply to meet rising world demand.

The Wall Street Journal posted an article Friday on how engineers are squeezing new oil from old wells in central California. The means to do this, however, is substantially different from how we extracted oil forty years ago. Today, we need to build steam generation plants to heat the oil in situ, to make it less viscous, and only then can we pump it to the surface. It doesn't take an engineering degree to understand that the extraction of oil today is more energy intensive than it used to be when natural pressures were sufficient to drive oil to the surface. It costs more to extract.

Seventy years ago the US was the global leader in oil production. We had tremendous supplies in Oklahoma, Texas, California, Pennsylvania -- even before Prudhoe Bay. We were a net oil exporter. The thing is, we extracted the easiest to get, the cheapest to get, and the highest quality oil first. Consider where we, today, are going to extract our future native oil supplies. Think about it -- our next native oil sources are going to come from the Gulf of Mexico, from offshore California, from ANWR -- these weren't the first places we went drilling for oil because they are obviously more expensive to extract than West Texas.

We clearly imported Venezuelan, Saudi Arabian, Canadian, Mexican, Alaskan, Angolan, Nigerian, Indonesian, British, and Norwegian oil first because this was far, far cheaper to extract than the oil shales of Colorado, the tar sands of Canada, the deep GOM, or ANWR.

Now, consider that Mexico, the US (including Alaska), Indonesia, Britain, and Norway have all peaked -- all these nations are no longer producing at their maximum production and all of them are producing on average 2% less each year.

The reason I follow this, the reason I want to see an oil constrained world, is so that we are forced to make better decisions about how we live. Gas at $7.32 a gallon would stop all those South Sacramento Mexicans from speeding their Chevy trucks through residential streets putting all people at risk. Gas at $748 would stop Asian speed racers from barreling up and down Franklin Blvd. in modified Acuras. Gas at $7.87 would stop all those bedroom Tracy residents from clogging up I-205 to commute to Oakland each morning. Gas at $8.04 would find five thousand new Elk Grovains taking the bus, both forcing improved service while decreasing traffic on our freeways to get us to work quicker. Gas at $8.47 would find light rail brought to Elk Grove now, rather than three decades from now. Gas at $8.56 would get more people on bikes, both improving the overall health of our constituents and improving the safety of bicyclists overall through sheer numbers. Gas at $8.82 would force our policy makers to promote infill, to build closer, to stop exurban sprawl.

I want to see an oil constrained world. Because we refuse to price gasoline correctly at a level that promotes all the things I want to see, I hope we really do see a real resource constraint. I hope that new battery technology doesn't come along, just in time to save us, to enable us to keep trudging down the same sorry path of open space consumption, of suburban sprawl, of more energy consumption. I don't give a shit if it ruins our economy -- the EU does just fine with much lower per capital energy use and we will simply learn to do the same.

But if history is any teacher, we've heard this cry for wolf a hundred times before. I just should stop believing that we will every run into any resource constraints. I should believe that the earth has a creamy nougat center filled with oil, just waiting for a long enough drill bit or technology to come along and allow us to extact it at will. We will never run out of fresh water, either; I should use as much as I damn well please. I shouldn't carry the Monterey Bay Seafood Watch guide in my wallet -- the earth will provide for as much sturgeon, bluefin tuna, and rockfish as I choose to consume. We have never run out of natural resources and we never will...