The International Writers Magazine: Oil Futures

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WHERE’S THE OIL? James Skinner ...at the present rate of consumption the world will run out of oil in about 80 year’s time

A couple of decades ago a little old lady went up to the counter of a fast food store and asked the attendant a very simple question, ‘Where’s the beef!’ The well-dressed employee evaded the answer with all kinds of elusive statements at the same time employing his marketing skills to sell the lady the ‘offer of the day’. Thus began one of the most catching and successful adverts on American television dealing with the products of a chain of hamburger stores. The various sequels with intelligent variations to the theme were also clever. But the punch line never changed, it was always the same: ‘Where’s the beef!’

Using this example to write about the world energy sources and consequently the global economy, as in the hamburger commercial we keep coming back to the same source, oil.
We could select an international panel of people from different walks of life and face them with one question, ‘Where’s the oil?’ I’m sure that not one would be able to answer the question. Sure, an intelligent schoolboy or girl would be able to point out the physical locations of the world’s oil deposits on an Atlas. He or she would also relate the product to everyday usage such as the gasoline to power mum’s car, or the reason for the recent pollution on Spain’s beaches by the sinking of an oil tanker. But if asked whether oil had anything to do with Mr. Bush lambasting Saddam Hussein, or if they thought that it could affect the price of their daily candy bar, a mixed bag of answers would reveal that no one really has a clue about the whole business of oil on this planet.

If we look first at some of the statistics, it would help a little.
Everyone has heard of OPEC, but I wonder if they know what the letters stand for, Organization of the Petroleum Exporting Countries. And do they know who they all are? They comprise Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. How about the production itself? Well, these countries produce on average 80M barrels per day with reserves of around 1.000.000M still up for grabs. 78% of this energy source is in their hands. What about the future? If we check out their web page, www.opec.com, (yes they’re even on Internet) we’ll find that at the present rate of consumption the world will run out of oil in about 80 year’s time. What’s more frightening is that over the next two decades neither the rate nor the percentage of reliance on oil will change!

There are other forms of energy available but none are anywhere near reaching a sufficient level of supply to have an impact on oil consumption. As for the rate of gas guzzling, all fingers point in the upward direction.

To start with we have another large glutten entering the world consumer market of oil that had not been counted on a few decades ago and will no doubt turn the tables round. China. The growth rate of this 1.2 billion country is phenomenal - it is well along the road to needing more electricity, more cars, more air-conditioning, more roads, more of everything that is reliant on oil. Although they are also producers of oil, the gap between production and consumption will grow steadily over the next few years. The main world consumers continue to be the United States followed by Japan, but China is soon to catch up and, who knows may even overtake Uncle Sam. Secondly, if the world economic growth rate continues, and more and more countries reach a certain degree of affluence, thus reducing the gap between the rich and the poor, they may well follow in China’s steps. It all adds up to having one hell of an impact on the consumption of oil. (And global pollution.)

But lets revert back to OPEC. They said in their manifesto (1960) that their objective was to ensure the stability of the world economy by controlling the flow of oil in relation to supply and demand. This in turn would help maintain a balance of oil prices. Hogwash! This could’ve been the case 40 years ago. The Middle East was another picture. Apart from the 1967 war and Gadaffi’s tomfoolery, Israel and Palestine were not having a go at each other. The Shah was running Iran and Iraq had not yet succumbed to the horrors of Saddam Hussein. The rest of the Arab states were in the throws of rapid investment and development. But all that has changed. The Shah was thrown out of Iran and the country reverted to Islamic theocracy. Iraq inherited Saddam and within twenty years had turned the whole area upside down. Islamic fundamentalism was born. The September 11th tragedy in New York was the final straw. Except for Venezuela, OPEC is now run by the world of Islam. This means that if the world situation continues on its dangerous path of terrorist attacks against Western values, OPEC will be out of control and each country could turn the tap on or off whenever it suited them and according to each and their own political and economic ambitions. This is sobering.

Oil consumption itself and assuming objectively that the present war in Iraq is abated, what could be a solution? The international forum of sensible institutions such as the United Nations, the OECD, the World Bank and others should get together and come to grips to truly identify the planet’s physical ills. Keep the USA on a ball and chain! The next step could be to produce a proper ‘Save the Earth’ paper with its corresponding manifesto and set of action points. Energy would obviously be at the top of the list with a loud and clear message, ‘Conservation’ followed by ‘Transformation.’ If we could just switch off that unnecessary light, turn off the tap of that wasted hot water, or walk to the office instead of using the car, it would help. If industry could develop and introduce, once and for all the electrical cars and buses followed by commercial rail and shipping transport instead of large trucks and lorries it may go a far way. I hate to say it but a change in policy towards the use of atomic energy with a bit of icing such as wind and solar power is yet another criteria to push hard at cutting back on oil.
It may sound like Utopia but, we have to start somewhere. Don’t you think so?
© James Skinner. March 2004
jamesskinner@cemiga.es

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