A car about to run out of gas can be traveling 70 mph until the moment the tank runs dry. Good thing cars have fuel gauges.
While the world economy is humming right along, the fuel gauge for oil production is broken and at least one oil industry expert believes we may be in for a rude shock.
Matthew Simmons, chairman of Simmons & Co. International and author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,” used the fuel-gauge analogy to illustrate his concerns about world energy supplies during a Feb. 8 talk in the Science Center.
Simmons said the energy industry is so large that its problems can affect all aspects of modern life. Overall, it is an $8 trillion to $9 trillion business, four to five times larger than the next-largest. The 20th century’s explosion in technology and health care, as well as new ways of making war, were largely due to advances made possible by abundant, cheap energy, he said.
While Simmons said it’s unlikely that the world will actually run out of oil, it’s entirely possible that, contrary to assurances from the industry, we’ve already entered a period of peak production. That sets up a tug-of-war over limited resources between rapidly industrializing China and India and the continued demand increases in the West.
It also begs the question about how long peak production will continue before beginning its inevitable decline.
Among the troubling signs is the difficulty of finding new oil fields. Most of the fields found recently, Simmons said, are smaller fields that will reach peak production quickly.
Equally troubling is the unreliability of oil company and oil-producing countries’ estimates of the reserves they have. Such reserve numbers are routinely inflated, Simmons said, providing a false picture of the global oil environment.
“Could we be entering a new energy era?” he asked. “How soon could peak oil and gas arrive? How long would they plateau? How fast would they decline? These are the most important questions we could ask.”
Simmons’ talk was the first in a new series sponsored by the Harvard Center for the Environment. Center Director Daniel Schrag, professor of Earth and planetary sciences, said the series, called “The Future of Energy,” would run for two years.