University of Rochester

Energy Crisis Accelerated, Not Helped, by Increased Oil Production
Researchers predict only 30-50 years at most before reserves begin to decline sharply

June 20, 2001

Increasing oil production will hasten the day when demand for oil outstrips supply and will make an inevitable oil crisis far more unmanageable, researchers from the University of Rochester say.

Leveling our consumption now, however, should stave off the crisis until the year 2150, more than a century longer than if we continue our present rate, even using the most optimistic estimates for the amount of oil yet to be tapped.

Though experts predict that we should be able to recover oil for hundreds of years, the rate at which oil wells can produce oil is not constant and will bring about a crisis point where the demand for oil outstrips the supply, decades, if not centuries, before the oil is actually gone. As soon as the wells' production begins to fall, the price of oil will rise sharply and continuously, without possibility of relief, say University researchers. The timing of the crisis point is dramatically affected by our rate of oil consumption; curbing our consumption now gives us more time, while continuing at our present rate sets the date around 2045 or closer.

"If we don't conserve, even if we were to be outlandish and pretend that the entire Earth was as steeped in oil as the Persian Gulf, we would reach crisis around the year 2100," says Ben Ebenhack, chemical engineering lecturer at the University and former analyst for Unocal Corp. "That's 50 years sooner than if we were to level off our production now-even assuming more reasonable estimates of the amount of oil in the ground. It's better to decide to conserve than to be forced to."

Charting the rate at which wells can produce oil, Ebenhack illustrates that the crisis point will hit in the year 2029 if the popular estimate of 2 trillion barrels of oil is accurate; in 2045 if the most optimistic reasonable estimate of 6 trillion barrels is accurate; or in 2100 if the 23 trillion barrel "Persian Gulf world" estimate is used. By contrast, simply keeping our consumption of oil at today's levels would extend the time to crisis to approximately 2150.

Ebenhack notes that the Bush administration's plan to increase oil reserves by about 100 billion barrels will help keep oil flowing for the short term, but in the long term the plan "will just move the crisis a few years closer." In addition, the administration's plan estimates that the Alaskan National Wildlife Reserve could contain 5 to 16 billion barrels of oil, but Ebenhack disagrees, noting that only about one in 10 attempted wells are viable. "They're figuring that if there are 5 to16 billion barrels of oil, that they should be able to retrieve a middle figure of 10 billion barrels. But, of course, five billion is not the real minimum. Zero is, and the curve is not linear, so I consider their numbers to be a bit optimistic."

Ironically, the energy crisis of the 70s may be helping us now, says Ebenhack. His analysis shows that the only time the United States actually reduced its consumption was from 1973 to 1979 when high energy prices forced people to conserve. That "course correction" dramatically reduced how much oil we consume today, 30 years later. A similar, sustained yet less burdensome, leveling off of consumption today should extend the usable life span of the world's oil by a century or more.

Charting the trend of our consumption since the early 1900s, Ebenhack shows that only one thing has ever had a significant impact on the nation's consumption: price. "Earth Day barely made a dent," he says. "The 20th anniversary of Earth Day had no effect. Legislation and voluntary programs don't seem to have done anything. The only time our oil production did anything but rise was in the 70s when the price convinced people to curb their consumption."

Ebenhack spent 11 years as an exploration analyst for Unocal Corp., a major multinational energy company. Much of his work centered around discovering oil that others had missed. He analyzed geographic data to predict whether or not a well in a given area would likely be fruitful. While at Unocal, a mandate was issued that no action on any well could begin until he had analyzed its potential. In addition to his current teaching responsibilities, Ebenhack is the president of a non-profit company called AHEAD Energy that helps lower income countries develop their own energy resources, such as oil wells that most companies find unprofitable.

In estimating when a crisis might occur, Ebenhack had to reconcile several disagreeing estimates of when we will exhaust the Earth's oil supply. He decided to chart out a "best case" scenario that would be indisputable. He pretended that every region of the Earth was as rich in oil as the Persian Gulf and calculated the rate at which wells could be constructed and the rate at which they could retrieve the oil. His extreme scenario suggests that even if there were 23 trillion barrels of oil in the world (four times the most optimistic, plausible estimates), our ability to retrieve it would begin to decline in 100 years or less. "This 100 years before crisis gives us a definite endpoint to work from," he says.

Most experts assume that there are roughly 2 trillion barrels of untapped oil in the world today, but Ebenhack believes that the real number is closer to the most optimistic estimates of 6 trillion barrels. Over a million wells have been drilled in the United States, with new wells constantly being drilled. Many older fields are on secondary or even tertiary recovery (although lower prices over the last 20 years have depressed the more expensive, exotic programs). Still, for all this activity, U.S. production has been declining at approximately 0.36 percent per year. When the rest of the world is facing similar depletion, it not unreasonable to assume that global production will emulate the U.S. example.

"If the world has much less than 6 trillion barrels of oil, the world's production would either already be on the decline, or the decline would have to be significantly steeper than the one established in the U.S.," says Ebenhack. "We know the global decline in production hasn't started yet, So, I think there is good reason to hope that there's twice as much oil ultimately to be produced as most experts think. Even so, we can expect to see a shortage in about 30 to 40 years, unless we change our consumption patterns."