Reporting: Synthesis

Exercise 30

Read the articles below and, in a paragraph of not more than 200 words, discuss the future with regard to oil.

Another important factor in the growth of the oil industry has been the development of petrochemicals. Many products have been created by chemists from petroleum. These include most of our modern plastics and fertilizers. Indeed, the increase in agricultural productivity - also known as the green revolution - could not have taken place without petroleum-based chemicals, including not only those that enrich the soil like fertilizers but also those that kill weeds, insects, and other pests - herbicides, insecticides, and pesticides.

The greatest problem for the future of the oil industry is that petroleum is not a renewable natural resource. All the petroleum that exists, no matter whether it is hidden under the earth or the seas, was created millions of years ago. As the use of oil has increased, so have the predictions that oil will soon be exhausted. Nevertheless, improved techniques for exploration, drilling, and recovery of petroleum have kept the supply ahead of the world's consumption. The oil industry, however, looking forward to the day when the supply of oil may become exhausted, is engaged in research to find not only substitutes for oil but also other sources of energy.

(From: The Petroleum Industry by Eugene J Hall, published in New York by Regents in 1976. This quotation is from page 86.)

Experts disagree about when oil supplies will start running down. At the start of this century, BP's boss Sir John Browne predicted that current level of production might be maintained for 30 or 40 years. Others say that supplies are about to peak or are already in decline.

One thing is certain: oil is a finite resource, and it will run out. Without imports, Britain's total reserves are enough to satisfy just 7.5 years of its peoples' present consumption, with the US having reserves enough to satisfy its people's voracious appetite for a mere 3 years.

These reserves will disappear even more quickly if, as predicted, world consumption increases by nearly 55 per cent between 2000 and 2025. Significantly, in the developing world oil consumption is expected to grow at two or three times the rate of the industrialized world in the next two decades. From 1997 to 2020 the oil that will be consumed by China alone is estimated to increase by 150 per cent.

While oil supplies are going down international demand is going up... and so is the competition. Already pipelines are being taken to ever-increasing lengths to get at the oil on which industrialized economies and societies so heavily rely. As supplies start to dwindle, and the price of oil starts to rise, companies will find profit in places previously considered - because of their geography or political situations - impenetrable.

US professor of peace and security studies Michael Klare predicts the emergence of a new geography. 'Attracting the greatest interest,' he says, 'will be places that harbour particularly abundant supplies of vital materials.' Possessing two-thirds of known future oil reserves, the Persian Gulf region (which includes Iraq, Iran, Saudi Arabia, and Kuwait) is most likely to experience the interest of oil competitors. The Caspian Sea Basin (which includes the Central Asian states of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan) is next, with a fifth of the world's total reserves.

There is now an extensive US military build-up in both regions. US companies and those of its allies are now being given the rights to extract the oil and lease the land over which their pipelines can run. These pipelines will map out strategic allegiances. For countries not playing on the US team the consequences will be significant.

(From the journal: New Internationalist, volume 361, October 2003. This was an article by Chris Richards. The article is called "Pipelines to power" and is on pages 9-13. The quotation is from page 11.)

Walk into any modern home and you'll find petroleum-based products everywhere; preservatives in food; soapy detergent liquid; synthetic fibres in clothes and carpets; plastic bottles and bags; chemicals that fertilize plants; synthetic rubber on shoes; make-up, nail polish, lipsticks and hair-dye. Oil makes the difference between living in a developed or a developing world. It heats houses, provides fuel for cars and machinery and lubricates the generators that produce electricity. As a primary energy producer, oil creates power. And oil pipelines bring that power to the people.

(This is from a book called: The no-nonsense guide to globalisation by Wayne Ellwood. It was published in London by Verso in 2001. The quotation is from page 15.)

To say anything about the long-term prospects of crude oil availability is made invidious by the fact that some thirty or fifty years ago somebody may have predicted that oil supplies would give out quite soon, and, look at it, they didn't. A surprising number of people seem to imagine that by pointing to erroneous predictions made by somebody or other a long time ago they have somehow established that oil will never give out no matter how fast is the growth of the annual take. With regard to future oil supplies, as with regard to atomic energy, many people manage to assume a position of limitless optimism, quite impervious to reason.

I prefer to base myself on information coming from the oil people themselves. They are not saying that oil will shortly give out; on the contrary, they are saying that very much more oil is still to be found than has been found to date and that the world's oil reserves, recoverable at a reasonable cost, may well amount to something of the order of 200,000 million tons, that is about 200 times the current annual take. We know that the so-called "proved" oil reserves stand at present at about 40,000 million tons, and we certainly do not fall into the elementary error of thinking that that is all the oil there is likely to be. No, we are quite happy to believe that the almost unimaginably large amount of a further 160,000 million tons of oil will be discovered during the next few decades. Why almost unimaginable? Because, for instance, the great recent discovery of large oil deposits in the Sahara (which has induced many people to believe that the future prospects of oil have been fundamentally changed thereby) would hardly affect this figure one way or another. Present opinion of the experts appears to be that the Saharan oil fields may ultimately yield as much as 1,000 million tons. This is an impressive figure when held, let us say, against the present annual oil requirements of France; but it is quite insignificant as a contribution to the 160,000 million tons which we assume will be discovered in the foreseeable future. That is why I said "almost unimaginable", because 160 such discoveries as that of Saharan oil are indeed difficult to imagine. All the same, let us assume that they can be made and will be made.

It looks therefore as if proved oil reserves should be enough for forty years and total oil reserves for 200 years - at the current rate of consumption. Unfortunately, however, the rate of consumption is not stable but has a long history of growth at a rate of six or seven per cent a year. Indeed, if this growth stopped from now on, there could be no question of oil displacing coal; and everybody appears to be quite confident that the growth of oil - we are speaking on a world scale - will continue at the established rate. Industrialisation is spreading right across the world and is being carried forward mainly by the power of oil. Does anybody assume that this process would suddenly cease? If not, it might be worth our while to consider, purely arithmetically, how long it could continue.

(From a report by E F Schumacher with the title: Prospect for coal, published in London by the National Coal Board in 1961. The quotation is from pages 124-125.)

Are we running out of energy? Of course not. Everything is made out of energy, and, as college students learn when they study the laws of thermodynamics in their introductory physics courses, energy cannot be destroyed. These laws also state that energy cannot be created: all we can do is to transform it from one state to another. And when energy is transformed, or in other words, when it is used for some work, the energy is changed from a more useful to a less useful form. All types of energy eventually end up as low grade heat. A "law" in the physical sciences means that there are no exceptions to it, and there are none to the laws of thermodynamics.

So if everything is energy and energy cannot be destroyed, why is there an energy crisis? The crisis has come because of the other laws, the laws that tell us that energy cannot be created, and that, once used, it is transformed into a less useable form. At present, the industrialized world relies on a very versatile, although polluting, fuel - oil. Oil is being consumed at prodigious rates, its supply is limited, and its price has fluctuated greatly. The developed nations are facing an energy crisis because the era of cheap, and supposedly clean, energy from reliable sources is over. Table 4.1 shows this fact as well as any set of figures can, as it focuses on the changes in the price of gasoline in the United States from 1950 to 1998. The table also helps one to understand another important feature of the energy crisis, especially as it has affected the United States. The period of cheap gasoline was a relatively long one, and people in the United States got used to having inexpensive petroleum products.

Table 4.1 US gasoline prices, 1950-1998


Retail price per gallon of regular gas ($)













Unprecedented economic growth and material prosperity took place in the United States during the 1950s and 1960s, and this was made possible, in part, by cheap energy. Individual life-styles and modes of industrial production were based on plentiful, inexpensive energy, and when oil prices skyrocketed in the 1970s, the shock to the US economy, and to the economies of many other countries, was profound.

(From: Global issues, by John L Seitz, published in London by Blackwell in 2002, pp. 107-108.)

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