Peak Oil is Not a Big Deal, by Roger E. Sowell aka EnergyGuy.
This discusses a recent article on CNNMoney about peak oil, a coming crisis in energy, and $500 per barrel for oil. The article is found at
Excerpts from the article as allowed by copyright fair use laws follow, with my comments.
Essentially, Matt Simmons is wrong about the price of oil going to $500 per barrel because Saudi Arabia may have lied about their oil reserves. He is also wrong that the demand for oil will escalate to a point that an oil panic ensues. Mr. Simmons believes in peak oil, a theory in which many people "believe that world oil production is at or near an inflection point, after which it will fall inexorably and fail to meet projected future demands."
What Mr. Simmons fails to account for is alternative technologies. Very few commodities on earth have zero substitutes. Water for drinking is one, although there were times when wine or beer were safer. Air for breathing is another. But not oil.
As some before me have written, but Mr. Simmons has apparently forgotten, there are many alternatives to oil. Some of these include GTL, or Gas To Liquids, in which natural gas is polymerized into hydrocarbon chains suitable for use as gasoline, jet fuel, and diesel. Also, CTL, or Coal To Liquids, where coal is the starting material and gasoline, jet fuel, and diesel are products. There are also other sources of oil, including Canada's tar sands, already economic at $100 crude, and enhanced drilling and production techniques for old oil fields in California and Texas.
The East Texas oil field was managed poorly in the wild and woolly days after its discovery, leaving much of the oil in the ground. Soon we will have means to extract that oil.
But perhaps the greatest alternative is hybrid transportation technology, using electric motors as generators to recover energy from braking, and storing that energy in batteries. These roughly double the distance a vehicle can travel on the same amount of fuel. The plug-in hybrids allow the battery to recharge from the electrical grid or solar PV panels.
Hybrid systems are already in use for cars, delivery trucks, and freight locomotives. Police departments across the US are purchasing hybrid cars and conversion kits for existing cars as a means to reduce their fuel costs and stay on budget. More money spent on gasoline means less money for officer equipment, training, and hiring.
The other big alternative is hybrid vehicles fueled by CNG, compressed natural gas. Recent technology advances allow precise directional drilling of shale formations that contain huge quantities of natural gas. Coal-bed methane is another source.
A most interesting breakthrough was recently announced by ExxonMobil, of all entities. They have a radical new technology for batteries that will likely make car batteries lighter and more powerful. This is exactly what is needed for hybrid technology and pure-electric vehicles.
Yet another alternative is hydrogen from sunshine via enhanced proteins. The British scientists' breakthrough research in 2004 showed the exact atomic structure of the photosynthesis site in plant proteins where water is broken down by sunshine into oxygen and hydrogen. That hydrogen could and will be used in power plants, probably combined cycle cogeneration because it is the most efficient. The electric power will replace gasoline and coal that can then be used to produce jet fuel or diesel. A major side benefit is that nuclear power plants with their toxic wastes will be shut down forever.
Finally, there is an enormous amount of natural gas that is currently trapped as frozen methane hydrates in the deep ocean.
In short, there is no way oil will ever reach $500 per barrel unless inflation many years from now is the reason. If demand exceeds supply, the geeks and engineers will once again ride to the rescue and produce cheaper alternatives.
I am a geek, an engineer, and an energy attorney. I have a lot of faith in my fellow geeks and engineers. I have seen what we can do, and done quite a bit myself.