131 = The Number of Years to Replace Oil


It seems the panic time for both green enthusiasts and peak oil pundits.

According to a new paper by two researchers at the University of California – Davis, it would take 131 years for replacement of gasoline and diesel given the current pace of research and development; however, world's oil could run dry almost a century before that.

The research was published on Nov. 8 at Environmental Science & Technology, which is based on the theory that market expectations are good predictors reflected in prices of publicly traded securities.

By incorporating market expectations into the model, the authors, Nataliya Malyshkina and Deb Niemeier, indicated that based on their calculation, the peak of oil production could occur between 2010 and 2030, before renewable replacement technologies become viable at around 2140.

The estimates not only delayed the alternative energy timeline, but also pushed up the peak oil deadline. The researchers suggest some previous estimates that pegged year 2040 as the time frame when alternatives would start to replace oil, could be “overly optimistic".

As I pointed out before, despite the excitement and hype surrounding a future of clean energy, a majority of the current technology simply does not make economic sense for regular consumers and lack the infrastructure for a mass deployment….even with government subsidies, tax breaks, and outright mandates.

In addition, the supply chain of renewable technologies is not as green as people might think. Most alternative technologies rely on rare earths for efficiency. However, the radioactive waste produced by rare earths mining process makes oil sands look like a green energy. This overlooked (or ignored) fact just now received some attention due to the sudden shortage caused by China’s embargo and export quotas on rare earths.

Another case in point – In China, the city of Jiuquan in Gansu province needs to build 9.2 gigawatts of new coal-fired generating capacity as backup power of the 12.7 gigawatts wind turbines due to be installed by 2015.  More wind farms would need more coal-fired power plants, with little or possibly no carbon reduction.

Capitalism means investment naturally flows to the more profitable proposition....and vice versa. With more data and information becoming available, not much could go unnoticed by the markets, particularly in a relatively new sector such as renewable energy. And this harsh reality is clearly reflected in this new study.

Now, in its latest long term outlook, the International Energy Agency (IEA) predicts that oil demand, prices and dependence on OPEC all set to continue rising through 2035, and that global oil supplies would be near their peak in 2035 as China, India and other emerging economies keep on trucking.

So the world needs to come to a common understanding that

The alternative energy is not mature enough to completely replace fossil sources any time soon. 

Energy security means a diversified and balanced portfolio inclusive of every bit of resource, fossil as well as renewables, just to meet the projected demand.
Real "green" energy is easier said than done. 

Furthermore, the increased rare earths dependency, and the latest food vs. fuel debate when the food industry slapped a law suit against the EPA over E15 ethanol, underline some of the unintended (we hope), yet nasty consequences that often come with ill-informed and poorly-planned policies.  (In the case of E15, the EPA is an easy mark considering one in eight Americans is on food stamps.)

All this requires a balanced and unbiased government policy to guide exploration and development of technologies to unlock the new fossil fuel reserves, expanding the R&Ds of emerging technologies, while effectively practicing and promoting energy efficiency and conservation.

Otherwise, we may literally witness $300 a barrel oil before the electric vehicle could even make one percent market penetration.  Unfortunately, there's no easy fix, and the clock is seriously ticking.

Related Reading: The Alternative Fuel Vehicle and $300 Oil

By Dian L. Chu, Economic Forecasts & Opinions

Community Talk

Re: 131 = The Number of Years to Replace Oil

I think 131 years is pretty accurate! At least that long makes sense to me. There are still so many reserves untapped you know the powers that be will do anything to get.

Re: 131 = The Number of Years to Replace Oil

You mean fewer regulations, not more. The ones we have right now are what's keeping American energy companies from exploiting the reserves that we do have. Then again, could it be a ploy to use up everybody else's oil first, so they have to come to the U.S. for their oil needs? Hey, it's not off the table. I've heard worse.

Re: 131 = The Number of Years to Replace Oil

I think oil is a great investment right now . I am into 4 companies.One company in particular will be a longer term hold because of its huge Natural Gas reserves. This seems to be the answer to decrease our dependence on oil. I know this fracturing the ground is dangerous but if it had a few extra regulations it might prove to be just fine.It should at least make the environmental lobby a little bit happier than oil. There is plenty of American Oil &Gas companies that could really make a dent in the dependence issue on foreign sources. If we are going to get oil from Canada ,we ought to start a plan to safely and more effectively do that with the Canadian companies and get out of the Middle East permanently.

Re: 131 = The Number of Years to Replace Oil

Dian Chu,

Very good article and very much on point about the present realities about world oil.

I am of the camp that believes we have already reached "peak oil" supplies. I believe the world has hit peak oil supply between 2005 and 2008. During that period and a little before then, it had been published (albeit not widely) that the only oil Saudi Arabia was able to increase in production was heavy crude, which the U.S. cannot and does not want or use. The sweet times for sweet crude is over. It is only a matter of time until they (the general media) will eventually be forced to publish the truth about world oil supplies, which are dier. Yes, I am a long-term investor in oil, and have been so for quite sometime.