THE FUTURE
247
in oil production, unless sufficient time and effort are brought to
bear. For example, although corn ethanol production is technically
feasible, it is more expensive to produce than gasoline and will
require costly investments in infrastructure, such as pipelines and
storage tanks, before it can become widely available as a primary
fuel. Key alternative technologies currently supply the equivalent
of only about 1% of U.S. consumption of petroleum products, and
the Department of Energy (DOE) projects that even by 2015, they
could displace only the equivalent of 4% of projected U.S. annual
consumption. In such circumstances, an imminent peak and sharp
decline in oil production could cause a worldwide recession.
However, if the peak is delayed, these technologies have a
greater potential to mitigate the consequences. DOE predicts that
these technologies could displace up to 34% of U.S. consumption
in the 2025 through 2030 time frame, if the challenges are met. The
level of effort dedicated to overcoming challenges will depend in
part on sustained high oil prices to encourage sufficient investment
in and demand for alternatives.
Depending on price assumptions, world unconventional production is projected to be 5.4 to 18.9 million barrels per day higher
in 2030 than it was in 2006, accounting for between 6 and 22% of the
world's total production of liquids (Annual Energy Outlook, 2008)
and may even play a key pivotal supply role (Steinhubl et al, 2009).
Production of unconventional liquids depends heavily on prices,
being more competitive with conventional sources when market
prices are high. However, not all unconventional liquids respond to
price changes in the same manner because the sources of unconventional liquids (Table 9.2) differ with regard to resource constraints,
political backing, available technologies, and other characteristics.
Without ample low priced crude oil supplies, there is little realistic hope of restoring the world economy to the growth model that
was desired prior to the run up in energy prices. In the United States,
a world leading powerful economy was built on the back of cheap
energy supplies, especially crude oil. Crude oil is the raw material
input for so many products, such as gasoline, jet fuel, and plastics,
that scarcity and high prices will lead to a complete transformation
of our consumer driven business model. The United States is not
nearly prepared for the transformation of the economy that will
soon come. The age of cheap easily accessed crude oil supplies is
nearly at an end. Even the current low price due to the worldwide
deleveraging of debt is bad news for the long-term health of the
247
in oil production, unless sufficient time and effort are brought to
bear. For example, although corn ethanol production is technically
feasible, it is more expensive to produce than gasoline and will
require costly investments in infrastructure, such as pipelines and
storage tanks, before it can become widely available as a primary
fuel. Key alternative technologies currently supply the equivalent
of only about 1% of U.S. consumption of petroleum products, and
the Department of Energy (DOE) projects that even by 2015, they
could displace only the equivalent of 4% of projected U.S. annual
consumption. In such circumstances, an imminent peak and sharp
decline in oil production could cause a worldwide recession.
However, if the peak is delayed, these technologies have a
greater potential to mitigate the consequences. DOE predicts that
these technologies could displace up to 34% of U.S. consumption
in the 2025 through 2030 time frame, if the challenges are met. The
level of effort dedicated to overcoming challenges will depend in
part on sustained high oil prices to encourage sufficient investment
in and demand for alternatives.
Depending on price assumptions, world unconventional production is projected to be 5.4 to 18.9 million barrels per day higher
in 2030 than it was in 2006, accounting for between 6 and 22% of the
world's total production of liquids (Annual Energy Outlook, 2008)
and may even play a key pivotal supply role (Steinhubl et al, 2009).
Production of unconventional liquids depends heavily on prices,
being more competitive with conventional sources when market
prices are high. However, not all unconventional liquids respond to
price changes in the same manner because the sources of unconventional liquids (Table 9.2) differ with regard to resource constraints,
political backing, available technologies, and other characteristics.
Without ample low priced crude oil supplies, there is little realistic hope of restoring the world economy to the growth model that
was desired prior to the run up in energy prices. In the United States,
a world leading powerful economy was built on the back of cheap
energy supplies, especially crude oil. Crude oil is the raw material
input for so many products, such as gasoline, jet fuel, and plastics,
that scarcity and high prices will lead to a complete transformation
of our consumer driven business model. The United States is not
nearly prepared for the transformation of the economy that will
soon come. The age of cheap easily accessed crude oil supplies is
nearly at an end. Even the current low price due to the worldwide
deleveraging of debt is bad news for the long-term health of the