This is the first discussion post I wrote for my Energy Science and Technology course. The question I was responding to was “What’s your position on global petroleum production?”
Increased production + decreased demand = lower prices. The equation is Economics 101. We are seeing lower prices at the pump, $2.05 in the U.S. today compared to $3.28 a year ago (gasbuddy.com). The newspaper articles for this week tell the story of the ongoing oil and gas boom. But decreased demand? Whoa, wasn’t expecting that. Maybe we should get used to it.
The decrease in demand is due to stagnant economies in Japan and the Eurozone and slower growth in China. I wouldn’t bet on current demand staying depressed, especially as people in China and India buy more cars. Our heavy reliance on petroleum will eventually ebb though. Maybe not today or tomorrow, but it is inevitable.
First, petroleum will eventually run out. Current estimates are that there is enough supply to meet present-day demand for 253 years. The truth is no one really knows how long it will last. What we can say for certain is that it is not being replaced. At some point there won’t be any left to pull out of the earth regardless of how creative we get with technology.
Second, petroleum’s hidden costs will eventually catch up with it. There was a time people couldn’t imagine smoking being banned in public places. However, science and sentiment changed policies. We are beginning to see the start of that with bans on fracking in the heart of oil country and concerns about fracking causing earthquakes. The issues being raised aren’t enough to overcome our addiction to oil yet, but this is how it starts.
Finally, alternatives are still in their infant stages, but progress is being made. For example, Americans can’t live without their cars. Variations of commercially available electric vehicles are increasingly common. Several automakers recently announced plans to bring fuel cell vehicles to the market. The popularity of oil is due to it being energy dense, not its good looks. NREL is developing a method to produce more energy dense biofuels than ethanol using basically the same process (L. Laurens, personal communication, November 14, 2014). Eventually, NREL wants to replace all the products derived from a barrel of oil with biomass. These alternatives have a microscopic piece of the market, but they are there and becoming more viable.
Is this the beginning of the end for petroleum? My crystal ball is broken and I don’t know enough about the industry to say that. When the end does come, we better have our Plan B in place.