As a matter of fact that the United States has been the leading country in the oil and gas industry ever since the start of the 20th century, it is quite a mystery to have experts denounce their prediction of the previous decade again and again. In 1914, it was predicted that oil would run out in 10 years, then in 1939 and 1950, it was renounced to run out in 13 years. Continuing its pattern in 1973, it will run out by 1990, and alas recently by the last decade in 2002 oil will run out by 2030 and other fossil fuels in 2050. So, are we really running out of oil?
It turns out that the reality of oil running out is way more complicated than just mere statistics. Technology advancement also plays an important part in denying what experts have said during their times. During the early stages of finding American gold, it was the pioneer in extracting oil hence they were only able to extract oil from easily accessible oil reservoirs known as “elephant” oil fields. That would have been the basis of what experts predicted to run out of. But, with the advancement in extraction technology, they can now access harsh conditions and still obtain the oil they were looking for. From time to time technology leaps a giant hole, oil resources that are recently found adds a new light to the prediction of oil running out. There is actually another factor that adds to the rapid decade-to-decade change, which is the increasing price of oil. An increase in net worth means that there is space for an increase in production fees which would make it possible for industries to venture into the most unconventional reservoirs to still obtain profit. For example, deepwater drilling in offshore areas and also oil sands.
According to Stanford University, they show the future energy reserves in billions of oil equivalents as a function of year. While we obviously use up fossil fuels without taking notice of what future reserves look like, we should take note of the endpoints. These endpoints are dangerously close: Since our society is so dependent on fossil fuels, it, therefore, is extremely important for us to know when these fuels will run out as follows:
Oil will end by 2052 – 30 years time
Gas will end by 2060 – 40 years time
Coal will last till 2090 – 70 years time
However, according to British Petroleum, earth has 53 years of oil reserves left at the current rate of consumption. According to the 2019 Annual Energy Outlook, the global GDP growth is expected to average at 3,4% between 2017 and 2040 and the demand will grow by one-third throughout 2040. These are enhanced because the countries that are currently developing like China and India who both have the highest rate of growth. Hence, talks regarding renewable energy have started to grow.
Amidst this prediction by 2019, the global economy and also the oil and gas industries have been affected by the current COVID-19 pandemic. In the Upstream region, certain fields have reached the negative margin of price because of the low demand and creating discounts to avoid stoppage of production but squeezing it to minimum flow. This must be done because stopping production totally will be technically difficult and it could jeopardize the extraction in the near future. Whereas exploration and development are drastically cut which would slow down the production in the long run if suddenly the demand for oil rebounds back to normal. Continuing on the downstream of the oil and gas industry, all service companies from pipeline gas, infrastructures, and floating storage ships are feeling the pain and making drastic adjustments to avoid liquidation of their companies.
Just one year ago the main contradiction of energy transitions would be political and environmental issues that build up pressure politically amongst the communities and the government, but this hiatus because of the pandemic can serve as a double-edged sword. Temporarily healing environmentally can either continue its moral support of transition or embarking through the overflow of oil supply.