Oil Panic and the Global Crisis (eBook)

Steven M. Gorelick holds the Cyrus Fisher Tolman Professorship in the School of Earth Sciences at Stanford University, where he has been on the faculty for over 20 years. In 2005, he was named a Guggenheim Fellow for his study of global oil depletion. Professor Gorelick is a Fellow of both the American Geophysical Union and Geological Society of America, and he has been selected twice as a Fulbright Senior Scholar (1997 and 2008) for studies of water resources issues in Australia.

Preface.

Acknowledgments.

About Units.

Getting Started: What Do You Think?

1 End of the Oil Era.

Cause for Concern.

Hubbert's Curve.

The Appeal of Hubbert's Curve.

Hubbert's Success.

US Oil Dependence Since Peak Production.

Chapters Ahead.

Notes and References.

2 The Global Oil Landscape.

Introduction.

Definitions.

Petroleum Composition and Energy Density.

Why a Barrel Is a bbl.

The Oil Business.

OPEC.

How Much Oil Is There? The USGS Assessment.

From the USGS Assessment to 2009.

Reserves.

Where Is Oil Produced?

Where Is Oil Consumed?

Oil Imports.

After Oil Is Produced.

Oil Production Versus Consumption.

Oil Quality.

Oil Pricing by Quality.

Gasoline.

What Determines the Price of Gasoline at the Pump?

The Price of Gasoline.

Gasoline Price Elasticity: What Happens When the Price Goes Up (or Down)?

Gasoline Price Variability.

Points to Take Away.

Notes and References.

3 The Historical Resource Depletion Debate.

The Malthusian Doctrine.

The Limits to Growth.

The Oil Panics of 1916 and 1918.

Panic Revisited: The Oil Crisis of the 1970s.

Arguments Supporting Global Oil Depletion.

Declining Oil Production in Countries in Addition to That in the US.

Production Exceeds Discoveries.

Reserve and Endowment Estimates are Inflated.

Industry Exaggeration of Reserves.

Fewer Giant Fields Discovered and Production is Declining.

Decline in Discovery and Oil Drilling Suggests Onset of Production Decline.

Global Industrial Development and Oil Consumption.

The Price of Oil is Increasing: Does This Indicate Scarcity?

Forecasts Support a Decline in Global Production Using Extensions to Hubbert's Approach.

Summary.

Notes and References.

4 Counter-Arguments to Imminent Global Oil Depletion.

Myth I: Hubbert's Predicted Production Rates Were Accurate.

US Oil Production.

The Bell-Shaped Curve.

US Natural Gas Production.

Global Oil Production.

Myth II: A Decline in Production Necessarily Indicates Scarcity.

Commodity Scarcity.

Generalizing the Debate: Resource Economists versus Neo-Malthusians.

Back to Oil.

Scarcity Rent.

Myth III: Resource Assessments Provide Useful Endowment Estimates.

The Missing Mass Balance.

Counter-Argument to OPEC and Industry Exaggeration of Reserves.

Myth IV: After So Much Exploration, There Is Little Oil Left To Be Found.

US Oil: Reserves.

US Oil: Discoveries.

Global Oil: Reserves.

Global Oil: Discoveries.

Russian and Global Arctic Oil.

Myth V: The World Cannot Afford Increases in Oil Use as Developing Nations Demand More Oil.

Future Demand of Developing Nations.

Oil Expenditures in the World Economy.

Myth VI: There Are No Substitutes for Oil.

The Gold Resource Pyramid.

The Oil Resource Pyramid.

The US and Global Oil Resource Pyramids.

Three Unconventional Oil Substitutes.

US heavy oil.

Global heavy oil.

US oil sands.

Global oil sands.

US oil shale.

Global oil shale.

Fossil Fuel Conversion: The Role of Gas and Coal.

The Importance of Diesel.

Synthetic Fuel from Coal and Natural Gas.

Natural Gas Resources.

Coal Resources.

Chapter Summary.

Notes and References.

5 Beyond Panic.

The Non-Renewable Resource Model.

Where Is an Effi ciency Gain Possible?

Will Increases in Effi ciency Indeed Reduce Demand?

Two scenarios for developing nations.

What Might Ultimately Substitute for Oil?

Consideration 1: Cost of dependence on imported oil.

Consideration 2: Gasoline and atmospheric carbon dioxide emissions.

Consideration 3: Alternatives.

Ethanol.

Biodiesel.

Leapfrogging to an ultimate substitute.

Effects of a US move to oil alternatives.

The State of Oil Resources.

Ending Thoughts.

Notes and References.

Index.

It is a book serious students of the world oil market should read, not because Gorelick has all the answers but because his account is well reasoned, well informed, and argued honestly, with respect for responsible opposing viewpoints."

David Lloyd Greene, Science, May 2010

"The book is a refreshing and methodical expose´ of the most common myths about oil that many of us hold as truths. Gorelick weaves an intriguing story from what might have been a dreadfully boring, yet impressive collection of data and observations. It was a pleasure to read and learn from this book, which I highly recommend to experts and non-experts alike, particularly our leaders in government."

Kenneth E. Peters, Geofluids, 2010"The book is a refreshing and methodical expose´ of the most common myths about oil that many of us hold as truths. Gorelick weaves an intriguing story from what might have been a dreadfully boring, yet impressive collection of data and observations. It was a pleasure to read and learn from this book, which I highly recommend to experts and non-experts alike, particularly our leaders in government."

Kenneth E. Peters, Geofluids, 2010

"It is a book serious students of the world oil market should read, not because Gorelick has all the answers but because his account is well reasoned, well informed, and argued honestly, with respect for responsible opposing viewpoints."

David Lloyd Greene, Science, May 2010

"This is a wonderful book, not only full of information, but with the clear stamp of the patient teacher who above all wants his reader to understand. I hope it makes its way into the halls of Congress."

Garrison Sposito, Professor, Betty and Isaac Barshad Chair, Environmental Science, UC Berkeley

"Are we running out of oil or do we have plenty of this resource? Will
the oil age end before we run out of oil? Have we reached the maximum
daily production rate of oil or are we already on the down slide?
Professor Gorelick has compiled the necessary data and provided his own
incisive analysis to assist the reader in understanding the complex
issues related to the supply and demand hydrocarbons. A must read for an understanding of both the domestic and global energy picture."
Professor Khalid Aziz, Department of Energy Resources Engineering at Stanford

"The dynamics around oil have shaped our lives for many decades and will do so for many decades to come. Surprisingly, many misconceptions exist around the extent and availability of this fundamental resource. This
book is a lucid compilation of facts which is a must-read for anyone
interested in energy and the environment."
Ashok Belani, Chief Technology Officer of Schlumberger Limited

"It is a pleasure to read an informed, balanced, and lively account of the prospect of meeting the world's need for oil in coming years. A combination of sound economics, attention to history's lessons, and political leadership offer the way forward. Read this book and decide what you should do."
John Deutch, Institute Professor, Massachusetts Institute of Technology, former Director of Central Intelligence.

"A very readable statistical history of global oil depletion that frames and illuminates the century-old debate about "peak oil" or the "end of oil." A suitable text for introductory resource economics or for the general reader with a love for facts and detail."
Sylvio J Faim, Los Alamos National Laboratory