The End of Cheap Oil

March 14, 2010 • Daily Email Recap

Thanks to Joe Brewer for this article from Scientific American from 1998. See See the 10-year update from 2008 below the original article. Also see a 2004 article from National Geographic, below, and a 2008 review of this subject.

by Colin J. Campbell and Jean H. Laherrère,
Scientific American, March 1998

In 1973 and 1979 a pair of sudden price increases rudely awakened the industrial world to its dependence on cheap crude oil. Prices first tripled in response to an Arab embargo and then nearly doubled again when Iran dethroned its Shah, sending the major economies sputtering into recession. Many analysts warned that these crises proved that the world would soon run out of oil. Yet they were wrong.

Their dire predictions were emotional and political reactions; even at the time, oil experts knew that they had no scientific basis. Just a few years earlier oil explorers had discovered enormous new oil provinces on the north slope of Alaska and below the North Sea off the coast of Europe. By 1973 the world had consumed, according to many experts’ best estimates, only about one eighth of its endowment of readily accessible crude oil (so-called conventional oil). The five Middle Eastern members of the Organization of Petroleum Exporting Countries (OPEC) were able to hike prices not because oil was growing scarce but because they had managed to corner 36 percent of the market. Later, when demand sagged, and the flow of fresh Alaskan and North Sea oil weakened OPEC’s economic stranglehold, prices collapsed.

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Revisiting “The End of Cheap Oil”

Prior to writing the article “The End of Cheap Oil” for the March 1998 issue of Scientific American magazine, we wrote four important oil and gas studiesi,ii,iii,iv totaling about 1350 pages. Colin also had written a splendid book called The Coming Oil Crisis (Feb 1997).

During September of 1997, we were approached by Wayt Gibbs with SciAm to write an article. It took several months, many mailings and lots of faxes to finalize the article with Wayt (my file contains over 90 pages of mail exchanges, excluding graphs). We were paid the grand sum of $500 each —half a good consultant’s daily rate—but the work was worth it. In our collaboration, Colin was the writer and I was the draftsman.

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End of Cheap Oil

Below more than a mile of ocean and three more of mud and rock, the prize is waiting. At the surface a massive drilling vessel called the Discoverer Enterprise strains to reach it. It’s the spring of 2003, and for more than two months now the Enterprise has been holding steady over a spot 120 miles (190 kilometers) southeast of New Orleans in the Gulf of Mexico. The ship is driving a well toward an estimated one billion barrels of oil below the seafloor—the biggest oil field discovered in United States territory in three decades.

The 835-foot (250-meter) Enterprise shudders every few minutes as its thrusters put out a burst of power to fight the strong current. The PA system crackles, warning of small amounts of gas bubbling from the deep Earth. And in the shadow of the 23-story-tall derrick, engineers and managers gather in worried knots. “We’ve got an unstable hole,” laments Bill Kirton, who’s overseeing the project for the oil giant BP.

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The Future is Now – the end of cheap oil

This is one of the more difficult articles/reviews I have worked on. I have been well aware of Peak Oil for a while, but never did I gather so much information in one sitting that simply spelled out doom and gloom.

I live alternately surrounded by the incredible amazing flexibility and beauty of nature contrasted with the ever-present artifacts and contrived superficialities of humanity crafted on the basis of ample and cheap fossil fuels (as well as its benefits of agricultural wealth and medical advancements). Since the 1960s environmentalists have been sending out warnings about the future of our environment if we do not care for it. They have been mostly ignored until now, when global warming concerns have proved a direct threat to individual lives as well as possible future lifestyles. At the same time, the industrial era based on cheap fossil fuels that created the climate change is rapidly drawing to a close – in what form humanity survives that closure is open to debate, but debate is not what is needed.

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