Alls Well With Oil
BusinessWeek explains why
theres no need to worry about oil supplies.
by Amy
Menefee
July 6, 2005
Rising prices for crude oil have revived questions about the end of
the worlds oil supply. But the July 11, 2005, issue of BusinessWeek
went deeper into the debate and came out with answers.
Christopher Palmeri and Peter Coy reported on oil
companies strategies for the future, including squeezing more oil
out of existing fields as well as developing new ones. New
technologies are enabling companies to identify the earths
resources. And higher oil prices help make innovation and expansion
possible, especially for smaller companies.
While heavier oil costs more to extract from the earth,
Palmeri reported that optimists say higher prices have now made
it increasingly profitable to drill for such unconventional
sources.
At the center of Palmeris article is a study by
Cambridge Energy Research Associates (CERA), an energy consulting
firm that predicts 20 or more major new oil fields will start
producing each year through 2010. As new fields provide more barrels
and new technologies help companies get more out of existing fields,
CERA predicts production capacity will outpace world consumption by
an increasing margin.
Some of those new technologies include supercomputers
that map subterranean deposits of oil and gas. Another option is
injecting carbon dioxide into the earth to increase underground
pressure, which makes extracting oil easier. As Otis Port wrote in
BusinessWeek, this method kills another environmental bird carbon
dioxide emissions. Oil company Anadarko is using carbon dioxide
emissions from an Exxon natural gas processing plant in Wyoming to
rejuvenate some of its oil wells. This practice will permanently
dispose of 2 million tons a year of greenhouse gas by 2008, Port
said.
BusinessWeeks coverage departed from much of the
mainstream medias take on the oil industry and world supply. News
outlets frequently quote supporters of peak oil theory, who
believe that the worlds oil production will soon peak and then
decline. The Associated Press reported on June 5, 2005, And then it
really will be all downhill. The price of oil will increase
drastically. Major oil-consuming countries will experience crippling
inflation, unemployment and economic instability. The AP article
continued, The only way to increase production capacity is to
discover more oil. Yet with a few exceptions, there just isnt much
left out there to be discovered.
BusinessWeeks Palmeri, Coy and Port proved that such
statements are inaccurate. There are many more resources available,
and companies are using their profits to tap into them.