The world is facing an energy crisis

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demand for energy is increasing
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  • the world's economy is growing, especially in developing countries such as China
  • the world's population is growing
  • modern lifestyles consume more energy
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the world is soon running out of oil, which has been our main energy source for the past century
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two of the three largest oil fields in the world have peaked
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the largest oil field in the world, Ghawar Field in Saudi Arabia, may also have peaked
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  • its mature fields are now declining at a rate of 8% per year, and its composite decline rate of producing fields is about 2%
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the amount of oil under the ground is finite
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  • oil is an organic fossil fuel deposited in finite quantities near the planet's surface, it is non-renewable
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oil is abiotic in origin, and is continuously generated by natural processes in the Earth's magma.
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all unrefined oil carries microscopic evidence of the organisms from which it was formed
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  • these "biomarkers" may be generated by plausible reactions in petroleum abiogenically
  • these "biomarkers" molecules could have come from the microbes that the petroleum encounters in its upward migration through the crust
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oil production per capita peaked in 1979, which means a subsequent decline of oil production in our century
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  • world energy production per capita from 1945 to 1979 grew at a breakneck speed of 3.45 %/year. (with a plateau 1973-1979)
  • for the first time in history, energy production per capita took a long-term decline of 0.33 %/year from 1979 to 1999
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the peak oil argument is based on faulty analysis
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  • the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponent
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new oil resources are constantly being discovered
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  • PetroChina has just discovered in an offshore field in Bohai Bay with proven reserves equal to about 10 per cent of the country's oil and gas reserves
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  • the new discoveries and production are not able to offset current depletion of oil reserve in the globe
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the rapid increase of the price of standard on NYMEX from 2003 to 2006 (from US$25/barrel to over US$75/barrel) suggests that oil production had peaked
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  • the price is affected by a variety of factors, not only of world's oil reserve, e.g. variety of factors, North Korea's missile launches, US war on Iraq
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alternative energy resources are available
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  • there is probably not enough clean sustainable energy to replace oil, coal and nuclear power
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different kinds of new energy technologies are being investigated in the past few decades, for example, nuclear power, bio-fuels, wind power, hydroelectricity...
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they may not be viable substitutes for oil
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  • the output of most of these sources is electricity, while oil is often burnt to produce mechanical energy
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Athabasca Tar Sands (Alberta, Canada) & the Orinoco Tar Sands (Venezuela) are being exploited for liquid fuels (at least 66% of the world's petroleum reserves)
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  • oil from tar sands is difficult and expensive to extract
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synthetic fuel, created via coal liquefaction, requires no engine modifications for use in standard automobiles and is cost effective
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  • synthetic fuel production by the Fischer-Tropsch process generates twice as much greenhouse gas as normal fuel
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market forces will spontaneously take care of the peak oil problem, and provide new energy resources and alternatives
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  • fuel prices increase a lot even if the drop in supply is small (high price elasticity), which will cause an economic crisis
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as world's oil production approach or peak, the price of oil will increase and alternatives will become more competitive
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  • state's control of oil resource, for example, in some South American countries like Venezuela, will thwart the normal running of the market mechanism
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the energy crisis is not caused by any insurmountable technological difficulty, but more or less social and political in nature
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  • appropriate energy policies can be made by the government to shift funding to increasing energy conservation, fuel efficiency, in order to solve the crisis
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  • technological development lags behind economic indicators
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