2.4 In-Depth Discussion of Sustainability Topics

Dependence on Imported Energy and National Security Concerns

The United States' current high use of imported energy sources puts the nation at risk for politically motivated restrictions to foreign energy supplies. The risks include threats from repressive regimes in oil-producing Arab and other nations to restrict supply if certain political and economic conditions are not met. Without imported energy, the US economy would suffer. More efficient use of energy and increased production and use of domestically produced renewable and other sources of energy can help to reduce national security risks in the United States.

Peak Oil Energy Perspectives 2011


The fact that fossil fuels are nonrenewable means that at some point they will run out. Oil production in the United States peaked in 1970. While it is still uncertain as to when world oil production will peak, many sources are indicating a peak in the very near term. Petrobras CEO José Sergio Gabrielli stated that new capacity from new projects is insufficient to head off the decline in production and that to maintain existing production the world needs new oil volumes equivalent to Saudi Arabia's contribution every two years; Saudi Arabia has the world's largest oil-proved reserves at 262.6 billion barrels. Sadad al-Husseini, former Saudi Arabian oil company Aramco executive, and multinational energy company Total's CEO, Christophe de Margerie, both don't see global oil production ever exceeding 89 million barrels per day (mbd). World oil production in the first quarter was 90.6 mbd, up 13 percent from the previous quarter. Other sources believe that oil production hasn't peaked yet, but it is close to peaking. Researchers from Kuwait University and from Kuwait Oil Company predicted recently that world oil production will peak in 2014.

Figure 2.10 World Crude Output (Million Barrels per Day)

 

While world oil production has not peaked as of yet, what has peaked are discoveries of new oil reserves. The peak of world oilfield discoveries occurred in 1965 at around fifty-five billion barrels per year (Gb/yr). The rate of discovery has been falling steadily since. Less than ten Gb/yr of oil were discovered each year between 2002 and 2007. The annual rate of discovery of new fields has remained remarkably constant at fifteen to twenty Gb/yr.

Figure 2.11 The Growing Gap

 

All the relatively easy to find and use oil and gas in the world has pretty much been found. Now comes the hard work in finding and producing oil from more challenging environments and work areas.


William J. Cummings, Exxon-Mobil company spokesman, December 2005

The actual date of the peak is not highly relevant; most relevant is that there is considerable evidence that world oil production will peak in the relatively near future. Given the high dependence of the US and world economy on oil, peak oil will put significant upward pressure on oil prices with the associated volatility as world demand for oil is expected to rise in the future and supplies begin to decline. The impact of reduced oil will demand some response from business to continue to survive and compete.