WASHINGTON -- After nearly a decade of warnings that the world’s oil supply was running out, Americans now are hearing about technology breakthroughs that can unlock vast U.S. deposits of natural gas, help reverse a 40-year slide in domestic oil production and perhaps transform America into the next Middle East.
Despite the euphoria, there’s a major problem: The looming American oil glut may simply not be enough to sate the United States and the rest of motorized humanity.
Experts say soaring demand from China and India is sure to send oil prices back above $100 a barrel. A supply disruption in the coming years, they say, could trigger panic, gasoline hoarding and perhaps lead to lines at the pumps akin to the 1973 Arab oil embargo and the 1979 Iranian revolution.
Global shortfalls of other fuels also could develop sooner than many people think, as a planet of nearly seven billion people and more than one billion gasoline-gulping vehicles strains the limits of combustible energy resources that are the underpinning of modern civilization.
While oil industry officials take strong issue with these dim views, critics charge that governments here and abroad have been less than candid about future oil supplies and the ramifications of failing to shift to alternative fuels.
One outspoken Energy Department consultant, Robert Hirsch, alleged that the administrations of both Presidents George W. Bush and Barack Obama have engaged in a cover-up of the likelihood of an oil shortage. Hirsch predicted a shortfall will hit in the next four years and send shockwaves through the world economy, possibly leading to gasoline rationing. Few governments have implemented intensive conservation programs to stretch out supplies during a decades-long transition to more fuel-efficient vehicles.
Instead, critics say that even as oil prices nearly quadrupled from 2003 through 2011, government and industry leaders have played down the world’s worsening energy predicament.
• While U.S. industry officials have trumpeted new drilling techniques that can recover huge deposits of previously unreachable oil and natural gas, most say little about the likelihood of surging Third World demand overtaking supplies, causing shortages and skyrocketing prices.
• Industry watchdogs say that some U.S. Energy Information Administration forecasts have been wildly optimistic, especially a projection that between 2011 and 2035, global production of liquid fuels will see a 21.6 million-barrel rise in daily output — the equivalent of the current reserves of the five biggest Middle East oil producers.
• Other projections and policies by the Energy Information Administration, which is the Energy Department’s independent information arm, as well as the Paris-based International Energy Agency and even the U.S. Securities and Exchange Commission, have masked mounting risks of shortages of oil and possibly natural gas, several experts say. A McClatchy computer analysis suggests that proven reserves of all of the world’s primary fuels are likely to diminish much faster than the EIA and the IEA have suggested, raising questions about how long mankind can continue to increase consumption of finite resources.
Researchers at the International Monetary Fund, while not yet speaking for the fund, predicted in May that rising oil demand would drive prices to nearly $200 a barrel, “permanently,” within a decade. Commodities speculators could exacerbate a price surge if they echo their behavior in recent oil spikes.