An oil shortage and a energy crisis have developed. As oil reserves were depleted, oil prices have rapidly risen. Eventually, a scramble will take place to control the remaining oil reserves. Efforts to develop alternative energy sources will become frantic!
Can we find & develop enough new oil and gas resources, e.g., the Bakken Shale Formation and the Haynesville Shale Formation, to meet the world's increasing demand for energy?
Three years ago, similar comments to those about oil shortages could have been made for natural gas. However, the discovery of huge natural gas fields in a number of shale formations have increased the supply of natural gas so much that we now face an over-supply of gas. This over-supply of natural gas should help somewhat with the oil shortage because oil and natural gas are interchangeable to a certain extent.
This web page reviews the severe fuel shortages and energy crises that oil shortages will soon bring. We are apt to be in serious trouble on the economic scene as "Peak Oil" approaches. Some of the questions this web site will try to answer:
Can we find energy sources, i.e., conventional or alternative energy sources, sufficient to meet our energy needs? Optimists are pointing to the heavily publicized Bakken Shale Formation of North Dakota which may contain hundreds of billions of barrels of high-quality oil. However, pessimists point out that much of the two-mile deep Bakken Formation oil may be recoverable at present oil prices. And even if most of the Bakken oil is recoverable, it would take years to drill enough wells for the produced oil to greatly impact our energy needs.
Chevron's strike in the deep Gulf of Mexico (Jack prospect) is often used to illustrate that we are not really in an energy crisis and that there is plenty oil out there. What they fail to mention is that it will take 10 years to get the Jack field in full production.
One location that does look great is offshore Brazil where Petrobras has just found giant oil fields (estimated to contain up to 30 billion barrels). It appears that there is a whole lot of oil offshore Brazil.
How will this country and the world handle the severe oil shortage (Peak Oil) which will be the "end of the cheap oil era." Can we prevent world-wide depression and mass famine as the conventional energy system (based largely on oil) winds down?
Will oil wars be necessary to provide the U.S. with its fuel supply as severe oil shortages arrive?
In regards to the war issue, the U.S. won't be the only country desperately seeking to obtain a share of oil. China, India and other nations without large oil reserves will be competing with the U.S. for the scarce supplies.
Tiffs between countries are already breaking out - well before the arrival of Peak Oil. For example, during the last few years of the Bush administration, Condoleezza Rice traveled from oil-producing country to oil-producing country asking for more oil production from the countries visited and, at the same time, asked the countries not to do oil-related business with Iran. The oil producing countries mostly ignored her.
Also, it was reported a couple of years ago that we were funding the building of a small naval fleet in the Caspian Sea so that our allies there could control contested oil fields. (But what if the other side builds a little navy there also?
Japan and China (CNOOC is the Chinese Offshore petroleum company) squabbled a few years ago over offshore oil well drilling planned by the Japanese in disputed ocean waters. China threatened with gun boats. What if Japan had retaliated?
In 2006, CNOOC (the Chinese offshore oil company) made an offer to buy Unocal, an American oil company with large reserves in Asia. Some members of the American Congress were very upset at the prospect of a Chinese company moving in on an American oil company and they were able to legally stop the purchase of Unocal. But China is still busy buying oil and gas supplies around the world. (Large Oil Company Stocks has more on CNOOC.)
The new perfect storm may eclipse World War 2 in its fury. The new storm will not be terrorism, as many in high places would like for you to believe. Rather, it is the Peak Oil storm or, to put it in the simplest terms, the end of cheap oil. We have been warned again and again, but the warnings have often fallen on deaf ears.
Of course, rapidly rising gasoline prices and oil prices are an important manifestation of the approaching perfect storm of Peak Oil. Oil rose, temporarily, in 2008 to $140 per barrel, and seems destined to eventually go higher than the present price of about $90 per barrel.
Lets face it! The U.S. is running out of oil and an energy crisis will eventually occur!
In 1956, geophysicist Dr. M. King Hubbert of Shell Oil made a prediction for which he was widely ridiculed. He predicted that US oil production would peak in 1970. Among the " oil experts," this was considered another "chicken little" prediction about oil reserves similar to other dire predictions that had been made over the years. These same experts were startled in 1970 when oil production in the US did indeed peak and then began a steady decline. The resulting increase in gasoline prices set off an oil shock in the country. Remember the TV shots of men and women fist-fighting at the gas pumps?
The US eventually recovered from that oil shock. Is another one on the way?
Recently, a disciple of Hubbert, petroleum geologist, Kennith Deffeyes, made an even more startling prediction: the peak of world oil production would occur on Thanksgiving Day 2005. This time those experts that support the Peak Oil concept didn't laugh. It appears, indeed, that Peak Oil production is approaching although it didn't occur on Thanksgiving day of 2005. The rapid development of Canadian oil sands, and the severe recession of 2008-10, have apparently delayed Peak Oil arrival. When it does arrive, the consequences of Peak Oil may be shocking to the world economic system.
Although many oil experts support the Peak Oil concept, many of our political leaders appear almost oblivious to the problem. This probably shouldn't come as too big a surprise. Remember, that in the 30's, Winston Churchill tried to warn the world of Hitler and the approaching conflagration. Few listened. Everyone wanted to hear only pleasant news. Fifty million lives later, they realized their error. However, if all the bad stuff is true about Peak Oil, World War 2 may, by comparison, appear like a lawn party compared to the crisis we will have when Peak Oil does arrive.
This web site reviews the options the US and the world have for coping with the impending oil shortage & energy crisis.
"Peak Oil" is a term you will hear often in the next few years or so. Better learn something about it!
Visit Natural Gas and Oil for details. In regards to natural gas, keep an eye on exploration activities underway in shale formations. These shale formations, in the past few years, have been found to contain enormous amounts of natural gas. In fact, as a result of the shale formation development, the U.S. is now producing more natural gas than it uses.
In regards to oil supply, the development of the Bakken Shale Formation (discussed above) of North Dakota will help but it will take several years for oil production from the Bakken to reach full potential. The large Gulf of Mexico strikes of the past few years will eventually also provide some help. But, what is missing are "elephant" fields which are now seldom found. We are now finding considerably less new oil than we consume.
3. Types of Alternative Energy Sources Under Development.
See Alternative Energy Sources. and Alternative Energy -Solar-Ethanol-Biodiesel-Wind.
The rapid development of the oil sands, wind energy, ethanol, biodiesel, and solar energy are discussed in the above-referenced material. LNG (Liquefied Natural Gas) is so new to the US that it can properly be lumped into the alternative energy category.
One of the key concepts here is Hybrid Cars. They will help relieve the fuel shortage by increasing automobile gas mileage.
Improved efficiency of equipment saved us in the energy crises of 20 to 30 years ago.. More such energy efficiency improvements are on the way. Many more are needed.
Maybe you can personally benefit by investing in Oil & Energy Company Stocks. .
Several years ago, when I began this web site, I did not feel good about the prospects of the US in resolving the problems of the energy crisis. Perhaps, I was too much under the influence of the pessimistic web sites. However, in the past year, I have become more hopeful, largely due to recent news regarding shale natural gas, Hybrid Cars, wind energy, and oil sands.
The development of oil sands is moving ahead at a rapid rate although great environmental obstacles still lie ahead. The potential with the oil sands is enormous and, with all the problems inherent in such an operation, recovering the syncrude from Canadian oil sands in large quantities has been a pleasant surprise.
The hybrid car is now roaring ahead and, while it won't make a quick impact, it is a great start.
LNG (liquefied natural gas) is also coming on strong and, indeed, was already stronger in other parts of the world than I previously realized. I personally believe that LNG is the next big thing in the energy area. At one time, I thought it would be the fuel to get us through Peak Oil with less serious problems than anticipated for the Peak Oil era. However, it now is questionable how much LNG we will have to import. The discovery of huge reservoirs of natural gas in many shale formations in the US has made natural gas a surplus commodity in the U.S. As a matter of fact, I recommend that we move as fast as possible to get an LNG export infrastructure established in this country. Why not compete with the Middle Eastern countries in the LNG import/export business.
The success of wind energy, particularly overseas, has been a pleasant surprise. Denmark is already obtaining 20% of their energy requirements from wind energy. Germany and Spain obtain about 7% of their energy from wind energy.
Encouraging also was the report that virtually every drilling rig in the world looking for conventional oil and gas is hard at work. (Even with the increased drilling activity, however, we are presently replacing less than 50% of the oil used with new oil.
The future doesn't look bright on the energy crisis front but it looks a little less dim than it did a few years ago.
On the negative side of the fence, I have been increasingly concerned about fuel cell (hydrogen-related) development. Hydrogen was supposed to be the cure-all and many of our eggs have been placed in that basket, but there are serous problems with the system. It does not look like hydrogen fuel cells will arrive in time to save us.
Have you driven any cars powered by hydrogen, lately?
I won't dwell on solar power. It was going to be our savior a decade or so ago. Driven any cars powered by solar energy lately?
In fairness about solar energy, the cost of producing solar energy has dropped dramatically in recent years. Probably, there is hope for solar energy after all!
I hate to even mention shale rock oil. We have a trillion barrels of the stuff locked up in shale rock out West but no process has come even close to being able to efficiently extract the stuff in a usable form.
I also hate to mention ethanol, the American corn farmer's dream fuel. Government subsidies and uninformed media coverage made a booming business out of the production of ethanol from corn.
It should be noted that the ethanol subsidies are now being largely discontinued.
Ethanol was not the answer to the energy crisis! In fact, it was a scam (my opinion).
Recently, four items of importance to the oil shortage and energy crisis situation have occurred:
1. Frenzied activity in the Bakken Formation of North Dakota, adjacent states and adjacent Canadian provinces has occurred as word of the immense size of oil potential of the Bakken Formation has become better known. Oil companies are now in North Dakota or on their way to work on the prolific Bakken oil. Greatly improved horizontal drilling technology and, of course the soaring oil prices, now allow the oil to be recovered profitably. For more details on oil companies involved, see Large Oil Company Stocks and Small Oil Company Stocks linked to below.
2. The numerous shale formations of the U.S. have begun turning out an impressive amount of natural gas after the "technical code" for extracting the gas from the shale was cracked. This development, alone, could ease the energy crisis in this country.
2. The Brazilian Offshore Oil Field, a giant oil field has been discovered offshore Brazil by Petrobras. An estimated 30 billion barrels of oil is contained in the oil field.
3. Time Magazine presented a very impressive report casting doubt on the wisdom of using Ethanol and biofuels as renewable alternative energy sources.
1. Global Warming - Energy Crisis. Al Gore is right - even if you think he is just another pointy-head liberal. We have global warming and energy crisis problems
While there are some hopeful developments in alternative energy sources development, Peak Oil and an accompanying energy crisis will eventually hit this country between the eyes. Oil and gas prices will soar and oil wars may break out.
Last Updated: 05/06/13