Solaqua's Energy Future Project :: Context of the Project

Project Proposal

Section 1.1 Impending Energy Challenges

Section 1.2 The Rising Cost of Energy

Section 1.2.1 Energy Composition

 

 

Our Oil Future?

 

Oil makes up almost the entire energy supply for transportation in the US, and our dependence on it is extremely dangerous in light of the recent trends in price volatility. The susceptibility of the price to change goes beyond socio-political forces, such as conflict in the Middle East, and includes vulnerability to natural disasters, such as the Gulf hurricanes of 2005. As of January 11, 2006 oil production in the Gulf is at 72.6 % of normal levels before Hurricane Katrina. Prices are expected to climb up to $63 per barrel by summer 2006, and demand is forecasted to grow by 3.8% by 2007 (EIA 2006).

The price of oil has been on the rise since 1973 and is not likely to change course any time soon. Our consumption of oil is expected to continually rise until the resource becomes sufficiently exhausted that it becomes cost-prohibitive to produce. Current debates rage regarding the exact date that such an event would occur. It is fairly well accepted that oil production is on the down slope of the curve in the US. It is believed that oil production peaked in the US in the 1970s, the significance of this is in the fact that as US production continues to decline, and domestic demand continues to grow, more and more of our oil supply will be from foreign nations (Francis 2004).

 

At a minimum there are 50 oil-producing nations that have also passed their peak production levels. The rest of the oil producing world is expected to peak production within the next thirty years, meaning any increase in consumption after that point, will be impossible. The debate is not as to whether the production peaks will be reached, it is about whether it will be this decade, or a few decades from now (Samsam Bakhtiari 2004).

 

 

Figure 4. Energy Consumption by Fuel ( US) 1980 to 2030

(Source: EIA, 2006)

 

The US Department of Energy projects that petroleum and coal consumption will continue to rise well into the 21 st century. With global supplies reaching peak production in the same relative time frame there is need to determine what will bridge the widening gap between supply and demand if these projections are close.

The significance of this increasing petroleum dependence is exemplified by the global oil production projections. The Department of Energy also has extrapolations of international oil recoverable reserves and resources that show a rapid decline in supply after the production peak is passed.

 

 

 

 

These two figures present a frightening and undeniable scenario of a societal energy issue that has never before been faced. This situation would be tremendous to overcome without serious economic repercussions and it would be hard to bounce back from a production decline of that magnitude without additional energy production options.

 

Go to Our Oil Future?