Slippery Definitions of Oil Supply

It's been obvious for over thirty years that the United States needs to develop alternative energy. The one thing that is not happening like the good old days is the discovery of new sources of light sweet crude to replace old sources of light sweet crude that have already been pumped out and used. The problem has existed for many years and has managed to get hidden by the fact that oil companies found all kinds of clever ways over the years to pump the oil out of existing fields at a faster rate.

Here's an article by Jay Fitzgerald of the Boston Herald on what I consider a mildly deceptive report:

A new report by a Cambridge research firm challenges the notion that the world is running out of oil.

High oil and gas prices may be hurting the economy and forcing motorists to dig deeper into their wallets to drive around. But higher prices are also encouraging companies to invest in projects to boost oil and gas production capacity across the world, according to Cambridge Energy Research Associates.

The firm released a study yesterday that said oil and natural-gas production capacity should rise by 25 percent by 2015, thanks largely to investments in new “unconventional” petroleum sources, such as oil-sand deposits and oil shale.

"Unconventional" petroleum is not what is meant when people talk about oil peaking (in coming years, even coal is going to be converted to "unconventional petroleum" or natural gas and at the moment there is plenty of coal). When we see $75/barrel for oil, that's the top dollar being paid for light sweet crude which is getting tougher to come by; increasingly the oil industry is turning to heavier grades of crude though they're much harder to refine. Another way to say this is that the production of light sweet crude is no longer able to keep up with demand. Light sweet crude oil is generally a very efficient source of energy, the easiest oil to pump and clearly the easiest oil to process and use.

And here's another way to look at this as well: thirty years ago some famous oilfields full of light sweet crude had reserves so large it was thought they would last a hundred years and according to the technology of the time that was an honest assessment. But because technology improved how much faster the oil can be pumped out, some of those same hundred year oil fields are now expected to last a total of 40-60 years.

Houston, we have a problem.