permaculture

[Claude Genest <genest@together.net>]

    Running on empty?

Ever since it became our most valuable resource, we have worried about
whether our oil supply will last. But, says Bjorn Lomborg, such fears are
age-old and unfounded. In the second of his three exclusive essays for the
Guardian, he argues that the wells will never run dry
Read Bjorn Lomborg's article in full, complete with footnotes and graphs
(pdf file)
Bjorn Lomborg's bibliography (pdf file)

Thursday August 16, 2001
The Guardian 

It was an axiom of the early environmentalists that we were running out of
resources, and that fear underlies much of the movement's thinking on
recycling, on the belief that small is beautiful, and on the need to
restructure society away from its obsession with resource-consuming
production. The idea has held powerful sway during 30 years of popular
thinking - despite the fact that it has been clearly shown to be incorrect.
Scare stories of resource depletion still turn up in the media every so
often, but many environmentalists today have disavowed their earlier fears.

For many people, the 1973 oil crisis was the first evidence of finite
resources. But we have long worried about running out of all kinds of
materials: in antiquity, grave concerns were voiced about the future of
copper and tin. The 1972 bestseller Limits to Growth, by the so-called Club
of Rome, picked up on the old worry, claiming that gold would run out in
1981, silver and mercury in 1985, and zinc in 1990. It hasn't happened, and
yet the idea held an almost magical grip on intellectuals in the 70s and
80s; and even today most discussions are predicated on the logic of Limits
to Growth. 

Only the economists begged to differ. One of them, Julian Simon, grew so
frustrated that in 1980 he issued a challenge to the environmentalists.
Since increased scarcity would mean higher prices, he bet $10,000 that any
given raw material - to be picked by his opponents - would have dropped in
price at least one year later. Stanford University environmentalists Paul
Ehrlich, John Harte and John Holdren, stating that "the lure of easy money
can be irresistible", took him on.

The environmentalists put their money on chromium, copper, nickel, tin and
tungsten, and they picked a time frame of 10 years. By September 1990, each
of the raw materials had dropped in price: chromium by 5%, tin by a whopping
74%. The doom-mongers had lost.

The truth is that they could not have won. Ehrlich and co would have lost,
whatever they had bet on: petroleum, foodstuffs, sugar, coffee, cotton,
wool, minerals, phosphates - they had all become cheaper.

Today, oil is the most important and most valuable commodity of
international trade, and its value to our civilisation is underlined by the
recurrent worry that we are running out of it. In 1914, the US Bureau of
Mines estimated that supplies would last only 10 more years. In 1939, the US
department of the interior predicted that oil would last only 13 more years.
In 1951, it made the same projection: oil had only 13 more years. As
Professor Frank Notestein of Princeton said in his later years: "We've been
running out of oil ever since I was a boy."

Again, measuring scarcity means looking at the price. Even if we were to run
out of oil, this would not mean that oil was completely unavailable, only
that it would be very, very expensive.

The oil-price hike from 1973 to the mid-80s was caused by an artificial
scarcity, as Opec introduced production restraints. Likewise, the present
high price is caused by adherence to Opec-agreed production cutbacks in the
late 90s. It is expected that the price will again decline from $27 a barrel
to the low $20s by 2020, bringing it well within the $17-$30 suggested by
eight other recent international forecasts.

The long-term trend is unlikely to deviate much from these levels because
high prices deter consumption and encourage the development of other sources
of oil - and forms of energy supply. Likewise, low prices have the opposite
effect. 

In fact, the price of petrol at US pumps, excluding tax, stood at $1.10 in
early 2001 - comparable with the lowest prices before the oil crisis. This
is because most of the price consists of the costs of refining and
transportation, both of which have experienced huge efficiency increases.

At the same time, we have had an ever-rising prediction of the number of
years' worth of oil remaining (years of consumption), despite increasing
consumption. This is astounding. Common sense dictates that if we had 35
years' consumption left in 1955, we should have had 34 years' supply left
the year after - if not less, because we consumed more oil in 1956 than in
1955. But the chart shows that in 1956 there were more years of reserves
available. 

The development for non-fuel resources has been similar. Cement, aluminium,
iron, copper, gold, nitrogen and zinc account for more than 75% of global
expenditure on raw materials. Despite a two- to 10-fold increase in
consumption of these materials over the past 50 years, estimates of the
number of years it will take to run out of them have grown. And the
increasing abundance is reflected in price: the Economist's price index for
raw materials has dropped by 80% since 1845.

So how can we have used ever more, and still have ever more left? The
answers provide three central arguments against the limited resources
approach: 

1. "Known resources" is not a finite entity.

It is not that we know all the places with oil, and now just need to pump it
up. We explore new areas and find new oil. But since searching costs money,
new searches will not be initiated too far in advance of production.
Consequently, new oil fields will be added as demand rises.

It is rather odd that anyone could have thought that known resources pretty
much represented what was left, and therefore predicted dire problems when
these had run out. It is like glancing into my refrigerator and saying: "Oh,
you've only got food for three days. In four days you will die of
starvation." But in two days I will go to the supermarket and buy more food.
The point is that oil will come not only from the sources we already know,
but also from many sources of which we do not yet know. The US Geological
Survey has regularly made assessments of the total undiscovered resources of
oil and gas, and stated in March 2000: "Since 1981, each of the last four of
these assessments has shown a slight increase in the combined volume of
identified reserves and undiscovered resources."

2. We become better at exploiting resources.

We use new technology to extract more oil from known oilfields, become
better at finding new oilfields, and can start exploiting oilfields that
were previously too expensive and/or difficult to exploit. An initial
drilling typically exploits only 20% of the oil in the reservoir. Even with
the most advanced techniques using water, steam or chemical flooding to
squeeze out extra oil, more than half the resource commonly remains in the
ground. It is estimated that the 10 largest oilfields in the US will still
contain 63% of their original oil when production closes down. Consequently,
there is still much to be reaped in this area. According to the latest US
Geological Survey assessment, such technical improvements are expected to
increase the amount of available oil by 50%.

At the same time, we have become better at exploiting each litre of oil.
Since 1973, the average US car has improved its mpg by 60%. Home heating in
Europe and the US has improved by 24-43%. Many appliances have become much
more efficient - dishwashers and washing machines have cut energy use by
about 50%. 

Most nations now exploit energy with increasing efficiency: we use less and
less energy to produce each dollar, euro or yen in our gross national
products. Since 1880, the UK has almost tripled its production per energy
use; worldwide, the amount of wealth produced per energy unit doubled
between 1971 and 1992.

We also exploit other raw materials better: today, a car contains only half
as much metal as a car produced in 1970. Super-thin optical fibres carry the
same number of telephone calls as 625 copper wires did 20 years ago.
Newspapers are printed on ever-thinner paper, because paper production has
been improved. Bridges contain less steel, because steel has become stronger
and because we can calculate specifications more accurately. Moreover,
information technology has changed our consumption - we buy fewer things and
more bits. Programs worth several hundred dollars will fit on a CD-rom made
from two cents' worth of plastic.

3. We can substitute.

We do not demand oil as such, but rather the services it can provide. Mostly
we want heating, energy or fuel, and this we can obtain from other sources,
if they prove to be better or cheaper. This happened in England around 1600
when wood became increasingly expensive (because of local deforestation and
bad infrastructure), prompting a gradual switch to coal. During the latter
part of the 19th century, a similar move from coal to oil took place.

In the short run, it would be most obvious to substitute oil with other
commonly known fossil fuels such as gas and coal. For both, estimates of the
number of years' supply remaining have increased. Moreover, shale oil could
cover a large part of our longer-term oil needs. At $40 a barrel (less than
one-third above the current world price of crude), shale oil can supply oil
for the next 250 years at current consumption; in total, there is enough
shale oil to cover our total energy consumption for 5,000 years.

In the long run, renewable energy sources could cover a large part of our
needs. Today, they make up a vanishingly small part of global energy
production, but this will probably change. The cost of solar energy and wind
energy has dropped by 94-98% over the past 20 years, and have come much
closer to being strictly profitable. Renewable energy resources are almost
incomprehensibly large. The sun could potentially provide about 7,000 times
our own energy consumption - in principle, covering just 2.6% of the Sahara
desert with solar cells could supply our entire needs.

It is likely that we will eventually change our energy uses from fossil
fuels towards other, cheaper energy sources - maybe renewables, maybe
fusion, maybe some as yet unthought-of technology. As Sheikh Yamani, Saudi
Arabia's former oil minister and a founding architect of Opec, has pointed
out: "The stone age came to an end not for a lack of stones, and the oil age
will end, but not for a lack of oil." We stopped using stone because bronze
and iron were superior materials; likewise, we will stop using oil when
other energy technologies provide superior benefits.

€ To order a copy of The Skeptical Environmentalist by Bjorn Lomborg
(Cambridge University Press, £17.95), for £15.95, plus p&p, call Guardian
CultureShop on 0870 066 7979. You can find an extended version of Lomborg's
article with footnotes at guardian.co.uk/globalwarming. Bjorn Lomborg is
associate professor at the department of political science, University of
Aarhus, Denmark CORRECTION: In yesterday's G2 we said that Bjorn Lomborg
would be live online today to answer your questions. The debate took place
yesterday, but can still be seen at the above website.

------------------------------------------------------------------------
Printable version | Send it to a friend | Read it later | See saved stories

     
 


      

                   
Guardian Unlimited © Guardian Newspapers Limited 2001