Thursday, October 6, 2011

Daniel Yergin

Daniel Yergin is one of the most influential voices on energy in the world and a highly respected authority on energy, international politics and economics.

From his Q & A with Alice Karekezi at Salon about Yergin's new book, The Quest: Energy, Security, and the Remaking of the Modern World:

You address an important question that has fazed many people: Is the world going to run out of oil? Some people say it will -- and quite abruptly. This is peak oil theory. You say otherwise.

The peak oil argument is that we are already halfway through the world's endowment of recoverable oil. The argument that I am making is that the endowment is much larger, and technology keeps enlarging what we can recover. Case study No. 1 is offshore Brazil where you have what is called presalt [oil found under a thick layer of salt lying just beneath the seabed]. It was inaccessible up until a few years ago. It is very large and will likely make Brazil one of the powerhouses of world oil production. Case study No. 2 is North Dakota. The Bakken formation [a rock formation yielding shale, or "tight" oil] was producing, a few years ago, 10,000 barrels a day. Now it is producing about 450,000 barrels a day. That came as a surprise. Five years ago, no one would have thought that North Dakota would be the fourth-largest oil-producing state in the country, but that's because of advanced technology.

There have been recurrent periods of great fear of running out of oil and it goes back to when oil was first developed as a commercial business in western Pennsylvania in the 19th century. It was always mysterious and people were predicting it would come to an end and we'd have to go back to using whale oil or coal or so forth. But each time there is this anxiety, what happens is new technology, new innovations, new areas open up, and the supply picture suddenly looks much better. So this current peak oil discussion is really the latest manifestation of what has been a recurrent feature since people started using and developing oil. But when you look at the numbers, we see that there is an additional supply coming in. My view is that rather than facing an imminent decline we'll see production of oil liquids continue to expand for a few more decades and then it'll come to a plateau. It won't necessarily fall off sharply.

But this is not to say that everything is fine because...[read on]
--Marshal Zeringue