Our oil well running dry, experts say

Global oil demand is huge and growing, and new fuel discoveries are not keeping up, a national energy supply expert said Wednesday.

No one is certain when the world’s supply of oil will peak — if it hasn’t already — but many experts in the field believe it may occur within the next five to 15 years, and measures need to be taken to reduce demand, said Roger Bezdek, founder of a Washington, D.C.-based economic and energy research firm.

“What we may be facing here is the world’s first forced energy transition and it may not be pretty,” Bezdek said. “We’re looking at a problem the world has never faced before.”

Bezdek was among the keynote speakers at a Spokane conference that examined global oil depletion from many angles. Presented by Washington State University’s Thomas S. Foley Institute for Public Policy and Public Service, the conference addressed potential solutions, such as increasing fuel-efficiency requirements for cars and developing electric cars, light rail systems and hydrogen fuel cell-powered vehicles. Speakers also discussed the opportunities available through hydropower, solar, wind and bioenergy sources.

“If you ever find yourself in a deep hole, rule No. 1 is: Stop digging,” said Matthew Simmons, chairman of an energy investment banking firm and author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.” Simmons compared the impact of Hurricanes Katrina and Rita on the country’s oil supply system to “two Pearl Harbors.”

Katrina was “our energy 9/11. Rita said, ‘OK, I’m going to finish the job,’” Simmons said.

Simmons said the two hurricanes brought into sharp focus growing problems with our energy supply. Oil production in many key areas of the world already has peaked, including in North America, Venezuela, Indonesia, Russia, Iran, Kuwait and Iraq, he said.

Simmons told the 150 to 200 conference attendees that a top Saudi Arabian oil executive recently said the Middle East’s oil production capacity is not what has been expected. Simmons said it was the first time he’d heard a “serious insider” acknowledge that Middle East capacity has peaked. Saudi Arabian oil fields are 40 to 60 years old and declining, he said. The remaining oil will be more difficult to produce and once the Saudi Arabian supply peaks, nothing can replace it.

The world is in this situation due to two decades of bad data about global oil reserves, Simmons said. However, measures can be taken to turn the situation around. A research and development “explosion” must occur, he said.

Data kept on world energy supplies must be reformed so it’s clear how much is available. Then, he said, the country must go to an energy “war footing” stance, doing everything possible to extend its supply of oil.

As 70 percent of the U.S. oil supply is used for transportation, Simmons said, alternatives can be initiated quickly, such as transporting goods by rail or boat instead of trucks, telecommuting and buying locally produced foods to further cut transportation costs.

“Ingenuity is the byproduct of panic,” he said.

Among the alternatives, Bezdek said, are increasing vehicle fuel efficiency, developing different fuels, making more use of diesel engines, which are up to 30 percent more efficient than gas engines, and increasing production of hybrid cars.

Increasing fuel-efficiency standards for cars has been a “lightning rod” of controversy between the auto industry and environmental movement, said Robert Wendling, who works with Bezdek’s firm. Still, he said, raising fuel efficiency requirements by 50 percent would cost the average consumer $2,700 more per car, but could keep fuel consumption from growing for 20 to 25 years.

“What this is doing is buying us … time,” Wendling said.