Energy myths and illusions

by David Howell

People like to discuss whether the world is running out of oil and gas, and the big oil companies round the world have now joined in with warnings about energy shortages and the need to retool our economies on a more energy-efficient basis. And to emphasize their dire warnings, they are currently predicting huge and immediate rises in the price of gas and oil in Europe.
But the whole debate between the pessimists -- yes we are drinking oil faster than we can find it -- vs. the optimists -- no, there is plenty more to be found and extracted -- is really irrelevant. Energy resources themselves are not the problem. The problem is the management of the world's vast energy resources, and all the complex political and economic decisions and choices and events that surround that management task.

Energy sources available to the human race are unlimited, however much we use. Nuclear energy is all about politics. But it can provide enough electricity to warm and light the whole planet forever, and even to colonize space as well. Fusion, now being explored, seeks in effect to encase in a bottle the entire energy equivalent of the sun. Even traditional energy resources, like coal and oil and gas, exist in quantities so vast that it would take centuries for the world to run out, if ever, despite the repeated claims if some scientists that we have "reached the peak," or are about to reach it.
To take only oil itself, "black gold" as it is called, every four or five years experts come up with new estimates both of proven reserves in the ground and, more vaguely, of likely but unexplored reserves, as indicated by certain geological markers and pointers.

Until recently the figure for "unexplored" oil reserves was about 900 bn barrels. The analysts have added that to the 1.7 tn barrels of proven reserves (mostly in the Mideast) and divided the total by the amount the world consumes each day, about 85 mm barrels. The answer comes out at about 50 years, although if oil consumption rises at present rates it would be more like 30 years.
But now in turns out that up in the Arctic areas of the Barents Sea, the High North as the Norwegians call it, there could be an other 25 % of unexplored reserves, pushing that 900 bn figure to something nearer 1.2 tn.

Hitherto the problem has been how to get it out from under the ice. Giant platforms on the ice would be much too dangerous. But along, as always, comes new technology. Drills can now burrow sideways for miles under the ice and suck out oil from distant reservoirs, pumping it back to land bases.
Together with the Russians, the Norwegians now think they are on top of this challenge and in a few years the edge of Europe will have oil and gas availability that matches the Middle East. In fact, gas is already being extracted, frozen and shipped to the ever-thirsty United States. And it is oil and gas not from the turbulent Persian Gulf region, where anything could happen any day politically, but from the most reliable, stable and democratic region on Earth.

This changes the face of world oil politics, invalidates all those assertions about having to depend more and more on the unstable Middle East and makes nonsense, yet again of gloomy views about the oil running out. Leading Asian oil-consuming economies like Japan can give a sigh of relief that growing Middle East oil and gas dependence is not, as we have constantly been told, "inevitable."
If one adds to this vista of plentiful oil the progress of technology that makes more and more efficient use of oil -- for instance via the hybrid cars now soaring in popularity -- a picture emerges in which oil and gas, far from running out, become the gradual gateway to a cleaner and greener future, rather than standing in the way of it. The same can be said for "clean" coal -- that is, coal being burned with the carbon-dioxide emissions diverted and minimized.

So the real problems of energy supply lie not in the sources, or in global warming effects, but in the terrifying political dangers in certain oil-producing regions, in the prospect of terrorist attacks on complex installations, in the vulnerability of long pipelines, in lack of timely infrastructure investment (usually due to wrong economic and price forecasts) and in misguided decisions by governments and politicians.
These are the points where wise energy planners should be concentrating and planning to find a way round. That is their duty and what their peoples have a right to expect.

The present strong oil price is entirely due to a mixture of these factors on the supplier side, plus very heavy demand from fast-growing China, and from India, coming on top of America's ever-rising demand for oil imports. It probably will not last. Growth will slow, new refineries (a key bottleneck at present) will come on stream and cleaner and greener alternatives will provide their share, although very slowly.
Feelings of shortage and energy crisis will doubtless persist as governments panic, taxes are piled on to energy sales, political earthquakes occur in sensitive regions. But the one certainty is that there is no shortage of oil or gas in the ground and no longer-term shortage of energy at all. It is just a question of surviving the difficult, and man-made, present.

David Howell is a former British Cabinet minister and former chairman of the Commons Foreign Affairs Committee. He is now a member of the House of Lords.