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Geologic Column
Our Energy Future: The Good, the Bad and the Downright Ugly
Fred Schwab

Remember the days when the Esso gas attendant shouted “Happy Motoring,” accompanied by a brisk salute as you pulled out of the station with the latest collection of complimentary glassware? The world is colder and crueler now.

The second phase of the 10-year-long Iraqi war and our post-September 11 perspective are making Americans a bit more aware of the vagaries of geology. But do geologists need to educate the public even more actively and apolitically about dependence on a natural resource that is limited in quantity and distributed without regard to nationality, religion and political system? I wonder if we really are doing enough to drive home essential points — the good, the bad and the ugly of the oil reality.

Domestic oil consumption

The Good. In 2002, the United States (slightly less than 5 percent of the world’s population) consumed 20 million barrels of oil daily, only about 25 percent of the global consumption.
The Bad. By 2025, global demand is expected to rise by more than half to about 120 million barrels of oil daily, with U.S. demand increasing proportionally to about 30 million barrels of oil daily.
The Ugly. The U.S. Strategic Petroleum Reserve, our “first line of defense” against a shortfall, holds a record 600 million barrels (a 30-day supply), equal to one year of Saudi Arabian imports. After September 11, the Bush administration raised the targeted strategic reserve to 700 million barrels, an extra five day’s supply.

Domestic oil production

The Good. A decade and a half ago, domestic production supplied about 60 percent of our needs.
The Bad. Domestic production in 2002 provided about 40 percent of our needs and imports, the other approximately 60 percent.
The Ugly. The energy task force convened by Vice President Cheney concluded that by 2025, two out of three barrels of oil will be from elsewhere.

Global oil reserves

The Good. The 2000 U.S. Geological Survey assessment of the world’s potential resources (exclusive of the United States) is three times higher than estimates of proven reserves. Of the potential 3 trillion barrels of oil, 24 percent have been produced and 29 percent have been discovered and booked as reserve, with the remaining 47 percent either undiscovered resources or anticipated growth in already discovered reserves.
The Bad. Two out of every three barrels of proven global oil reserves (roughly 1,000 trillion barrels) sit beneath the deserts of the Middle East.
The Ugly. Known reserves in North America are puny (60 billion barrels), with the U.S. total at 22 billion barrels, representing only three years of oil independence. Some believe the Arctic refuge provides a solution, but the most optimistic estimates of oil there (16 billion barrels) would not even double our proven reserves.

Alternative energy — a way out?

The Good. Globally, wind power is economically competitive, growing 28 percent in 2002. Technology is making geothermal energy more accessible. Royal Dutch/Shell Group is investing $1 billion over the next four years in renewable energy.
The Bad. Wind power accounts for a very small fraction of the U.S. electrical power generated. The only commercially successful geothermal plant, the Geysers in California, produces less than 0.2 percent of our total electrical generating capacity. In just 2002, Royal Dutch/Shell Group spent $25 billion on oil and gas development.
The Ugly. The International Energy Agency (a Paris-based group set up by the leading energy consuming nations) estimates that an investment of $16 trillion will be necessary to ensure that the world has enough energy to meet demand through 2030.

The Iraq “solution”?

The Good. Proven reserves in vast carbonate reservoirs extending as broad folds across the Middle East are ample and well delineated, especially in Saudi Arabia where roughly 260 billion barrels occur (12 times the U.S. reserve). Iraq has the second largest reserves with almost half that amount. War and economic sanctions have understandably curtailed exploration, so Iraq’s potential oil reserves are almost certainly much higher.
The Bad. Before the war, Iraq produced half a million barrels of oil daily to meet its domestic needs, and exported another 2 million barrels of oil a day (3 percent of the world’s supply). Postwar production has failed to reach this total. A minimum of $5 to $10 billion is needed to reconstruct and repair war damage and secure delivery systems. Iraq already has a debt of $100 million, and also owes reparations of $100 billion to Persian Gulf states, including Kuwait, and other countries globally. Increasing Iraqi production to 6 million barrels of oil a day might be possible by the end of this decade, but at a cost of $30 billion for new wells, equipment, pipelines and terminals.
The Ugly. Iran may serve as an unhappy example. Reviving Iranian oil production after revolution and war with Iraq has been an abysmal failure. Pumping capacity has remained unchanged for a decade. Production from the giant fields has even declined dramatically.

Early signs from Iraq are discouraging. The quality of oil has markedly declined because overpumping has allowed water and gas to seep into the oil deposits. United Nations oil experts believe that some Iraqi reservoirs may only be 15 to 25 percent recoverable. The downright ugly bottom line: A world where roughly 85 percent of the energy (and much of the greenhouse gas input) comes from inefficient burning of fossil fuels, globally distributed without regard to national boundaries, is a scary place.


Schwab is a professor of geology at Washington and Lee University in Lexington, Va., and a corresponding editor for Geotimes. He gathered his data for this story from various news and energy agency sources. E-mail: schwabf@wlu.edu.

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