The Future of Oil

Ex.1 Read the text and answer the questions:

1. What the alternatives were if the oil reserves would suddenly end?

2. What does the future of oil and gas depend on?

3. What does Hubbert peak theory predict?

4. Why is it considered to be controversial?

5. What’s your point of view?

Ex. 2 Find words opposite in meaning to the following ones in the text.

minor, to agree, different, decrease, opponent, independent, constancy, slowly, afterwards, proposal

While oil is expected to remain a major source of energy in coming years, alternative energy development such as solar power, wind power, butanol, ethanol, photovoltaic, nuclear power, hydrogen, or oil from oil shale, and oil sands may increase in significance. Coal may also increase in use because of its existence in vast quantities in rapidly developing countries, such as China and India, which are not yet bound by controls under the Kyoto Protocol.

The future scenario for oil and gas can be developed from the statistics of world reserves. The Hubbert peak theory (also known as peak oil) is a proposition which predicts that future world petroleum production must inevitably reach a peak and then decline at a similar rate to the rate of increase before the peak as these reserves are exhausted. It also suggests a method to calculate mathematically the timing of this peak, based on past production rates, past discovery rates, and proven oil reserves.

Controversy surrounds the theory for numerous reasons. Past predictions regarding the timing of the global peak have failed, causing a number of observers to disregard the theory. Further, predictions regarding the timing of the peak are highly dependent on the past production and discovery data used in the calculation.

Proponents of peak oil theory also refer as an example of their theory, that when any given oil well produces oil in similar volumes to the amount of water used to obtain the oil, it tends to produce less oil afterwards, leading to the relatively quick exhaustion and commercial inviability of the well in question.

The issue can be considered from the point of view of individual regions or of the world as a whole. Hubbert's prediction for when US oil production would peak turned out to be correct, and after this occurred in 1971 - causing the US to lose its excess production capacity – OPEC was finally able to manipulate oil prices, which led to the 1973 oil crises.

Since then, most other countries have also peaked: the United Kingdom's North Sea, for example in the late 1990s. China has confirmed that two of its largest producing regions are in decline, and Mexico's national oil company, Pemex, has announced that Cantarell Field, one of the world's largest offshore fields, was expected to peak in 2006, and then decline 14% per annum.

It is difficult to predict the oil peak in any given region. Based on available production data, proponents have previously (and incorrectly) predicted the peak for the world to be in years 1989, 1995, or 1995-2000. However these predictions date from before the recession of the early 1980s, and the consequent reduction in global consumption, the effect of which was to delay the date of any peak by several years. A new prediction by Goldman Sachs picks 2007 for oil and some time later for natural gas.Just as the 1971 U.S. peak in oil production was only clearly recognized after the fact, a peak in world production will be difficult to discern until production clearly drops off.

Many proponents of the Hubert peak theory expound the belief that the production peak is imminent, for various reasons. The year 2005 saw a dramatic fall in announced new oil projects coming to production from 2008 onwards - in order to avoid the peak, these new projects would have to not only make up for the depletion of current fields, but increase total production annually to meet increasing demand.

The year 2005 also saw substantial increases in oil prices due to a number of circumstances, including war and political instability. Oil prices rose to new highs. Analysts such as Kenneth Deffeyes argue that these price increases indicate a general lack of spare capacity, and the price fluctuations can be interpreted as a sign that peak oil is imminent.

Ex.3 Write a summary of the text.

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