The New Oil Boom: The End Of Green Hysteria?
Decades ago, the world was told it was running on empty. Today, we have more oil than we need. What’s fuelling the boom in black gold?
On the evening of April 18 1977, President Jimmy Carter invited television cameras into the Oval Office and portentously announced to the American people that “tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes.”
The unprecedented problem was energy. Or rather, the lack of it. “We simply must balance our demand for energy with our rapidly shrinking resources,” said the 39th President of the United States. “The oil and natural gas we rely on for 75 per cent of our energy are running out.”
Carter’s talk was poorly received. Americans didn’t appreciate the apocalyptic message, still less his vision for tackling the situation, with its rather schoolmasterly demand for a collective show of moral backbone. But hardly anyone questioned his facts. And yet he was about as wrong as he could be. Far from running out, oil and natural gas reserves were, if not inexhaustible, then unfathomably vast. Nobody knew that then, but they do now.
Moreover, as well as bountiful oilfields in North America, Russia, Saudi Arabia and other producers in the Middle East, there are massive, barely tapped reserves in South America, Africa and the Arctic: not billions of barrels’ worth, but trillions. So the planet is not about to run out of oil. On the contrary, according to a Harvard University report published last year, we are heading for a glut.
The 75-page study, by oil executive Leonardo Maugeri, was based on a field-by-field analysis of most of the major oil exploration and development projects in the world, and it predicted a 20 per cent increase in global oil production by 2020.
In particular, the report highlighted the deep-water reservoirs in Brazil’s Santos basin, which are thought to hold as much as 150 billion barrels of oil, Venezuela’s “extra-heavy” oil in the Orinoco Belt, estimated at 1.2 trillion barrels, the oil sands in Canada, the Kwanza basin in Angola, and the Bakken and Three Forks fields in North Dakota and Montana, in the United States, which, Maugeri said, “could become the equivalent of a Persian Gulf-producing country” all on their own.
And the reason for this boom? A technological revolution that is transforming the way we both find and extract oil.