RUNNING OUT OF OIL? 

L. B. Magoon / USGS 11jun01

Charts and figures below
This page is from a USGS PDF at http://geopubs.wr.usgs.gov/open-file/of00-320/

Q! Are we running out of oil?
A! Wrong question! The question is "When is THE BIG ROLLOVER?"

Q! What’s THE BIG ROLLOVER?
A! It's when the demand for oil outstrips the capacity to produce it.

Q! Has THE BIG ROLLOVER occurred before?
A! On a smaller scale, yes! The U.S. ROLLOVER occurred in 1970 (Figure 1, A). Remember those long lines at the gas stations in 1973? It has also occurred in the Former Soviet Union (Figure 1, B). THE BIG ROLLOVER is global, not local.

Q! Does that mean we are running out of energy?
A! Not exactly! It means we are going to be running short of a very convenient form of energy, one that propels our Planes, Trains, and Automobiles! Up until now, it has been a buyer’s market but after THE BIG ROLLOVER, it will be a seller’s market (Figure 1, C)

Q! Whose fault is it? Who’s holding out?
A! Nobody, just like the 'buffalo' and 'the fish in the sea,' they are just less plentiful. Same with oil, there is a limit to how much oil the world can produce every day. We are not running out of oil, it will just become more precious.

Q! Should we do something to prepare for THE BIG ROLLOVER?
A! Just like preparing for the Y2K BUG…. talk about it, talk about it, and talk about it! 

Q! What good is talk? 
A! As somebody once said, "You can’t solve a problem until you know you have one."

Q! Then what?
A! After we get through the finger pointing, then real solutions will come forth from very creative people in science and technology, in business and politics, in city, state, and Federal governments, and in our other institutions. We all are the stakeholders!

Q! Wouldn’t it be better to get started solving this problem before THE BIG ROLLOVER is upon us?
A! Absolutely! There's no substitute for planning and implementing that plan before the oil shortage occurs. We can turn a lose-lose situation into a win-win situation if we start now.

Q! What is the world’s oil production now? 
A! The world produces 75 million barrels a day (Figure 2, D), or 27 billion barrels a year (Figure 1 and Table 1, E). 

Q! How much do we consume? 
A! The U.S. consumes just over 19 million barrels a day or just over 7 billion barrels of oil a year. The U.S. consumes 26% of the world’s oil every day! Or, 300 million U.S. consumers out of 6 billion world consumers, that’s 5 % of us, use 26% of the oil. 

Q! How much of that do we produce? 
A! The U.S. produces 8 million barrels of oil a day, so we import 11 million barrels, or 58% of what we use (Figure 2, F)! 

Q! What about Saudi Arabia? 
A! Saudi Arabia has about 3 million barrels a day of excess production capacity (Figure 3, G). Depending upon world oil demand, it could last a few more years, but then what? 

Q! Whew! That’s a lot of oil. With all our technological advances, aren’t we finding enough oil to replace what we use? 
A! No! Technology is great, but it can’t find what’s not there. In the last 5 years, we consumed 27 billion barrels of oil a year, but the oil industry discovered only 3 billion barrels a year (Figure 4, H). So, only 1 barrel was replaced for every 9 we used! 

Q! With demand so high, what will the prices do? 
A! The price of oil is quite likely to stay above $25 per barrel (Table 1, I) 

Q! So when is THE BIG ROLLOVER? 
A! Nobody is sure, but those willing to forecast say somewhere between 2003 and 2020 (Table 2, J). Most everybody seems to agree that it will most likely be within our life time, and possibly quite soon (Figure 1, K)! 

Q! What should we do to prepare for THE BIG ROLLOVER? 
A! Hang on tight, if we don’t recognize the problem soon and deal with it, it’s going to be quite a ride! http://geopubs.wr.usgs.gov/open-file/of00-320 

DISCLAIMER This paper is published with approval of the director of the U.S. Geological Survey, but the interpretations and opinions presented are the author's, not those of the U.S. Geological Survey, whose scientists have diverse opinions on this and most other subjects.

1 Barrel of oil = 42 U.S. gallons

Figure 1 ANNUAL OIL PRODUCTION (BILLIONS OF BARRELS) 

Figure 2 World oil production in millions of barrels daily 

F 1 United States 8.09 2 Russia 6.22 3 Norway 3.48 4 Mexico 3.33 5 China 3.20 6 UK 2.94 7 Canada 2.68 8 Brazil 1.42 9 Other non-OPEC 14.19 D 10 OPEC 29.46 TOTAL: 75 million barrels of oil per day Source: International Energy Agency & Associated Press  From: San Jose Mercury News, March 25, 2000, p. 2C

1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 B ARE WE RUNNING OUT OF OIL? by L. B. Magoon ARE WE THE BIG ROLLOVER E Here we are today! A K Modified from: Campbell and Laherrere, 1998 All Non- OPEC oil producers

Figure 3 Millions of barrels of oil per day 

Source: Petroleum Finance Company Iraq, an OPEC member, not included
From: The Wall Street Journal, March 29, 2000, p. A3 C

Figure 4 Modified from: Campbell and Laherrere, 1998

LAURIE GRACE; SOURCE: JEAN H. LAHERRERE Billions of barrels of oil 300 200 100 0 1940 1950 1960 1970 1980 1990 2000 2010 5 year increments H  ACTUAL FORECAST

Table 1 Impact of 1.1 million barrels per day output hike on oil consumption & prices 

                    ACTUAL  |           FORECAST          |                   
                    1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Actual    Forecast 
                    2000      2000      2000      2000      1999      2000 
                    -----------millions of barrels per day--------------------
World oil demand    76.6      74.5      75.8      78.0      75.3      76.2 
Non-OPEC supply     45.7      45.4      45.6      46.4      44.6      45.8 
OPEC supply         29.2      30.5      30.7      30.8      29.3      30.3   
Dollar per barrel  $27.4     $26.7     $26.3     $28.3     $17.9     $27.2    I


    27.5 billion barrels consumed in 1999 
E   27.8 billion barrels to be consumed in 2000 
        1.1% increase in consumption 

From Oil & Gas Journal, April 3, 2000, p. 27 

FORECASTER

Table 2

	Year of THE BIG ROLLOVER FORECASTER
	2003 Campbell, 1998 2004 Bartlett, 2000 2007 Duncan and Youngquist, 1999 2019 Bartlett, 2000 2020 Edwards, 1997 2010-2020 International Energy Agency, 1998

References cited: 

Bartlett, A. A., 2000, An analysis of U.S. and world oil production patterns using Hubbert-style curves: Mathematical Geology, v. 32, no. 1, p. 1-17.

Campbell, C. J., 1998, Running out of gas: The National Interest, Spring, p. 47-55. 

Campbell, C. J., and Laherrere, J.H., 1998, The end of cheap oil: Scientific American, v. 278, no. 3, p. 78-83.

Crow, P., 2000, OPEC to boost production, correct market: Oil and Gas Journal, v. 98, no. 14, April 3, 2000, p. 26-27. 

Duncan, R.C. and Youngquist, W., 1999, Encircling the peak of world oil production: Natural Resources Research, v. 8, no. 3, p. 219-232. 

Edwards, J. D., 1997, Crude oil and alternative energy prodeuction forecasts of the twenty-first century. The end of the hydrocarbon era: American Association of Petroleum Geologists Bulletin, v. 81, p. 1292-1305. 

International Energy Agency, 1998, World energy prospect to 2020. Paper prepared for the G8 energy ministers’ meeting Moscow, 31 March-April 1.

Youngquist, W., 1999, The post-petroleum paradigm—and population: Populations and Environment, v. 20, no. 4, p. 297-315.

source: http://geopubs.wr.usgs.gov/open-file/of00-320/ 28jan02