Lethal Trajectories - Michael Conley [28]
He’s every bit as pompous as I thought he would be, Clayton mused. He frames his question as a speech and obviously cares more about how he looks than the answer he receives. Guys like this don’t expect to be challenged. Let’s have some fun.
“Good question, Wellington. Allow me to respond,” said McCarty—a small concession before dropping the bomb.
“First, with regard to peak oil, I don’t know any geologists who challenge the concept. The timing may be challenged, but not the concept. Peak oil is a proven geological concept that merely says oil production follows a bell-shaped curve. When the top of the curve is reached—usually when about half the oil from a field is gone—production starts to decline. It doesn’t mean all the oil is gone, but it means we’ll get less and less production from any given field, and what’s left will be harder and costlier to get. For example, oil in the lower forty-eight states peaked in America in 1971, going from a high of about eleven million barrels per day to something between two and three million barrels today. That number doesn’t include the deepwater oil we get in the Gulf. Do you disagree with these numbers, Wellington?”
Wellington’s face turned beet red. He was seldom challenged so openly in public. McCarty continued, “Global oil production, for whatever reason, peaked at around eighty-eight million barrels in 2012. Since then, it has declined every year and now stands at about seventy-eight million barrels daily. The nominal demand for oil, had there been no oil shortages, would now be over ninety-one million barrels a day. That thirteen-million-barrel-a-day shortfall in global oil has starved the economic engines of growth and directly contributed to the economic malaise we’ve experienced over the past five years.”
“So you say, Mr. Vice President,” Crane gamely responded, “but isn’t it a fact that we have more oil in the shale fields in the Rockies than in all the oil fields in Saudi Arabia combined? Isn’t it true that there’s an abundance of oil in the ANWR in Northern Alaska and offshore that remains untapped? It sounds to me like the only real oil problem we have is a government that won’t let us drill.”
That’s great, Wellington, keep digging your own hole, Clayton mused before responding.
“First of all, Wellington, the shale oil you’re talking about isn’t the same as the sweet crude oil the Saudis are producing, so your analogy is wrong from the get-go. The shale oil you refer to is actually a kerogen—a fossilized material that will yield oil only if heated to extreme temperatures. I suppose if we left it in the ground for a few million more years it would eventually become a liquid crude oil. In the meantime, you have to apply a lot of energy to replicate what Mother Nature will eventually do, and the costs to do so far exceed the commercial value of the oil. That’s not me speaking, Wellington, those are just cold hard geologic facts.”
The cameraman, miffed at the browbeating Wellington had given him before the show, was all too happy to pan in on the scowling face of the “great one.”
“With regard to your observations on ANWR and offshore drilling,” Clayton continued, “it gets to the heart of the issue: peak production. What am I suggesting? Just this—unlike the geologic concept of peak oil, peak production reflects both geologic and aboveground constraints such as market conditions, cost of production, geopolitical considerations, availability of deepwater rigs and labor, technological challenges, and the like. When you drill down into ten thousand feet of water and then another twenty thousand feet of ocean bottom to find oil, the cost of drilling, extraction, and processing eventually exceeds the commercial value of the oil. The easy oil is gone, and production of new oil eventually reaches a point where it can’t be economically produced. Peak production is like saying, ‘I might be able to find new oil at twenty bucks a gallon,