The automotive industry is skating on thin ice -- or rather on thin oil. All the oil that humanity is ever likely to extract from the earth would spread over the earth's surface in a film that is about the thickness of only a spark-plug gap! (See http://www.ecotopia.com/hubbert/oilcalcs.htm/). Humanity is using up its endowment of oil with carefree abandon, leaving precious little time to redirect industry priorities before oil availability goes into permanent global decline. When these consequences are presented, borne out by regional experience and extensive geological research. There is often heard a chorus of disbelievers, just as in 1956 when M. King Hubbert projected that oil production in the continental USA would peak in 1970 and decline thereafter. As we all know, he was right on the money. The phenomenon became known as the "Hubbert Peak," and since that time, USA output has declined dramatically.
Leading the chorus of skeptics are the economists, who offer their conclusions of unending prosperity based on extrapolation of market trends. A common conclusion: if you pour money on it, more oil will flow. Unfortunately, it's just not that easy. Mother Nature has something to say about the matter.
In the 1970's, Hubbert projected that the global oil peak would occur around 1995. His adherents have had the benefit of additional data based on powerful exploration technology applied in the 1980's, to the point that virtually the entire planet has been explored. These experts have adjusted the date of the Global Hubbert Peak to sometime between 1999 [PetroConsultants/Campbell] and 2005 [Duncan].
While higher prices and more capital investment may draw out more oil in the short term the geologists' data defines our long term prospects. The remaining question then becomes, to what extent is the geological data reported through political filters? In turn, how might political decisions affect humanity's prospects for a smooth transition to viable alternatives?
Consumption is now 23 billion barrels per year on an upward trend, and discoveries are 6 billion barrels on a downward trend. Contrary to the popular myth of more oil being available on tap from one year to the next, much of the "new" oil in the '80's and even into the '90's has come from political/economic reserve adjustments. OPEC members "created" oil on paper to increase their quotas, Mexico did it to increase collateral for loans [LA Times, December 10, 1991 and NY Times, March 18, 1997], and the USGS got together with the spin doctors in 1995 to report that "if ... drilling probes ... nooks and crannies, [fields] could yield another 60 billion barrels." [Science, 24 Feb 1995] The operative term here is "could."
Predictions of up to 50% growth in consumption and ample oil reserves long into the 21st century are made by such sources as the US Energy Information Agency, the International Energy Agency and Shell Oil. Are these predictions based on geology or market assumptions? Compare their underlying data with that of the independent geologists, and judge for yourself.
What are the implications for the auto industry?
Since there are about 50 million autos produced every year, and the global fleet is over 500 million vehicles, it would take 10 years to replace the fleet if production of the "miracle car" were to begin tomorrow and older cars were simply replaced. Realistically it takes 5 years for design and tooling for a new model. Older cars would most likely be kept in operation with much of the production absorbed, producing growth in the global fleet, especially in Asia. Taking these factors into consideration it would take 15-20 years to saturate the market with this "miracle car." Without consensus on the optimal solution, change is likely to take much longer.
In 15 years, if political stability persists, the annual oil output is likely to be down 20% from its peak; in 25 years, it could easily be down 40% from today's level.
If on the other hand there is increasing political instability, especially in the Middle East, it is likely that annual oil output will go down to substantially lower levels. Given the pressures of increasing demand in Asia, it is likely that the United States and Europe will face even harder adjustments as imports dominate their sources of supply. Alaska and the North Sea oil aren't going to last forever.
So what solutions can be imagined?
Results from non-conventional oil, such as oil shale and tar sands, will be disappointing. It will be hard to get out and environmental impacts will be staggering -- today's gushers will be tomorrow's dribblers. Natural gas is plentiful with respect to today's level of consumption, but would disappear quickly if the transportation sector were to switch. Conversion of coal to liquid fuels would have a disastrous impact on global warming. What about biomass, the conversion of plant matter into fuel? Since mechanized agriculture in the industrial world takes many calories of oil for every calorie of food, acres of fuel crops per acre of food crops will be required to maintain mechanized agriculture, before even considering biomass for passenger transportation.
So what's possible out there on the cutting edge?
In transportation, the cutting edge has always been seen on the race track. Today the cutting edge race is the World Solar Challenge ("WSC") which takes place in Australia. In 1987, GM won hands down with the SunRaycer designed by Paul MacCready, the aerodynamicist who developed the Gossamer Albatross which crossed the English Channel under human power.
As a direct consequence, GM created the Impact with its Hughes subsidiary and the MacCready team, which is now in limited production as the EV1, the first purpose-built electric vehicle by a major manufacturer in modern times.
However, in 1993 and 1996, the WSC winner was the Honda Dream, and by 1996 the American participation in the WSC had declined dramatically. The BEST of four USA entries, a joint effort of traditional sports rivals Stanford and the University of California, came in 25th! And 6 of the top 10 cars were Japanese, 11 of the top 20 were Japanese, 16 of the top 30 were Japanese. So who is going to be taking the lead in automotive development now?
What's the ultimate solution?
Addressing practical alternatives in depth is beyond the scope of this article. There are two key operating principles, both of which are being pursued in races such as the WSC: (a) doing more with less, and (b) utilizing sustainable sources of energy. Whether on-board a racing machine, or on rooftops charging EV's, solar electric panels are representative of sustainable solutions.
Perhaps it can be said that if there is to be a truly revolutionary technology in time to address the impending Hubbert Peak, it is increasingly unlikely to come from the transportation sector. More likely is the technology of the information age, whereby telecommuting will reduce the need to travel.
Explore the data in detail: http://www.hubbertpeak.com/ or call +1.831.425.8523.
updated: 1997 August 21