will increase drastically and major oil-consuming countries will experience
crippling inflation, unemployment, and economic instability.
According to these scientists (and now a very few economists), it will
take a decade or more before conservation measures and new technologies
can bridge the gap between supply and demand, and even then the
situation will be touch and go. Of course, none of this will affect vacation
plans this summer, so Americans shouldn’t fret much—you can plan
beach weekends for a little while. Though gas prices are up, they are expected
to remain relatively affordable to middle class Americans if incomes
keep rising, at least for the next decade. Accounting for inflation,
current gasoline prices, at an average of $2.50 per gallon, are pretty comparable
to what motorists paid in past decades; it only feels expensive because
gasoline was unusually cheap between 1986 and 2003.
As anyone would expect, the analysis by Campbell and Deffeyes is way
off the much more optimistic official figures. The U.S. Geological Survey
states that reserves in 2000, the year of its latest figures, of recoverable
oil were a lot, and that peak production will not come for about 30
years. The International Energy Agency (IEA) believes that oil will peak
between “2013 and 2037,” and Saudi Arabia, Kuwait, Iraq, and Iran, four
countries with much of the world’s known reserves, report little if any depletion
of reserves. Meanwhile, the oil companies (which do not make
public estimates of their own peak oil) say there is no shortage of oil and
gas for the long term. These conflicting views show that nobody knows
the answer. “The world holds enough proved reserves for 40 years of
supply and at least 60 years of gas supply at current consumption rates,”
according to BP.12
The industry is asking the public to trust it, arguing that every year
for more than 100 years it has produced more than it did the year before,
and predictions of oil running out or peaking have always been
proved wrong. Today, the industry says, global production has hit 84
million barrels per day, with big new fields in Azerbaijan, Angola, Algeria,
Nigeria, and the deep waters of the Gulf of Mexico and elsewhere
soon expected to be onstream. But as everyone knows, the business of
estimating oil reserves is contentious and political. According to Campbell,
companies seldom report their true findings for commercial reasons,
and governments, which own 90 percent of the reserves, often lie.
Most official figures are grossly unreliable: “Estimating reserves is a scientific
business. There is a range of uncertainty but it is not impossible
34 THE END OF OIL