Will the Oil Crisis happen - Essay Example

As Daniel Yergen concisely states, "We're not running out of oil. Not yet." He qualifies this statement by stating, "Right now the oil market is tight, even tighter than it was on the eve of the 1973 oil crisis." He even states that, "in this high-risk market, 'surprises' ranging from political instability to hurricanes could send oil prices spiking higher," but he - like many other scholars - does not foresee an actual supply shortage in the near future. He notes that the public at large has heard the rumor that rising gas prices are an indication "that the world is going to begin running out of oil in five or 10 years," and many people believe this falsehood to be true.

However, the reality of the situation is just not that simple. The ever-changing prices of fuel might be an indicator of a fluctuation in the market, but many experts agree that price instability is not a reflection of a dwindling oil supply. Yergen states that new field research conducted by Peter Jackson and Robert Esser actually indicates quite the opposite is true. He states that Jackson and Esser have actually forecast "a large, unprecedented buildup of oil supply in the next few years." Their figures estimate that "between 2004 and 2010, capacity to produce oil could grow by 16 million barrels a day -- from 85 million barrels per day to 101 million barrels a day -- a 20 percent increase.

" Although fuel consumption is a never-ending fact of our society, modern technology is making it possible for the world's oil suppliers to use much more efficient techniques for finding new reserves and exploiting the ones we already have. As Deming states, "With every passing year it becomes possible to exploit oil resources that could not have been recovered with old technologies." Much of the optimism in Leonardo Maugeri's The Age of Oil is founded in such technological hope. He writes, "It is probably true that our planet does not hide many more gigantic, yet-to-be-discovered deposits of conventional oil.

But the discovery trends we are witnessing today can make this irrelevant" (220). He believes that "unconventional sources such as gas liquids, ultra-deep offshore deposits, ultra-heavy oils, shale oils, and tar sands" hold some hope for future development. Scientists are currently researching ways to put these resources to use. Since high gas prices allow companies to have more capital for scientific advancement and research, his hope of nontraditional fuel sources may likely become a reality.

He also states that the Persian Gulf and Russian Federation "have huge potential for new reserves additions" if they can overcome "outmoded technologies and poor management" (221). Ultimately, when fuel companies need this oil, the market will likely force them to find a way to make the right technologies available to these regions. For example, the largest oilfield in Kuwait is still using equipment from the 1940's and 1950's to extract its oil (224). Surely, modern technology will be able to help this field and many others as the quest for oil intensifies.

Yergin predicts that "the share of 'unconventional oil' - Canadian oil sands, ultra-deep-water developments, 'natural gas liquids' - will rise from 10 percent of total capacity in 1990 to 30 percent by