American civilization as we know it appeared to be in grave peril a quarter century ago. When Arab nations cut off oil shipments to the United States during the 1973 war in the Middle East, gasoline prices abruptly rose 40 percent and panic ensued. Motorists idled in long lines at gas stations, where creeping tensions led to fights and even occasional shootings. Automakers scrambled to retool their assembly lines to manufacture miserly compacts rather than gas-guzzling behemoths. Entrepreneurs poured millions into upstart solar-energy and wind-power companies. Politicians pontificated about the need for collective belt-tightening and offered income tax credits to homeowners for energy-saving insulation. Meanwhile, doomsday scenarios predicted ever-increasing shortages of fossil fuels and $100-a-barrel oil prices by the year 2000.
Surprise. Doomsday is nigh and oil has been selling at $10 to $15 a barrel, not $100. Adjusting for inflation, gasoline is cheaper today than it was before the Arab oil embargo. Indeed, the world seems to be awash in oil.
This year, wells around the world — from the sands of Saudi Arabia to the deep continental trench off the coast of Brazil — will pump some 75 million barrels of oil each day to satisfy demand. That’s about 25 billion barrels a year, and the number is climbing at a rate between 2 and 3 percent a year. Barring a worldwide recession, the U.S. Energy Information Administration believes the world will be consuming around 110 million barrels a day by the year 2020. And it looks as though we won’t be running short by then either. “It’s hard for people who remember the seventies to accept this, but I believe we’ll never ‘run out’ of oil the way the pessimists used to think,” says Michael Lynch, a political scientist at MIT.
“People think of the Earth as having a certain amount of oil the way you might have a certain amount of money in your bank account,” adds Daniel Yergin, chairman of Cambridge Energy Research Associates, who wrote the The Prize, a history of oil, and The Commanding Heights, a study of market forces and the energy industry. “But in reality, the ultimate amount available to us is determined both by economics and technology.” So even though the United States has already spent more than half its domestic oil reserves on its energy-hungry economy, the gloom-and-doom predictions of the seventies were averted because of advances in oil technology and colossal new oil finds in West Africa, Colombia, and Russia. And Roger Anderson, director of the energy research center at Columbia University’s Lamont-Doherty Earth Observatory, expects the future will hold more of the same. “If you pay smart people enough money,” he says, “they’ll figure out all sorts of ways to get the oil you need.”
These days a host of innovators is probing for new sources of oil underwater. Geologists have perfected seismic imaging of seafloor geology, with the hope of tapping into vast new oil fields like the one that lies beneath the Caspian Sea in Kazakhstan. That region could harbor a staggering 200 billion barrels — making it one of the largest oil basins ever discovered. And drilling companies can now venture well over a mile into the seafloor. Unmanned submarines make the descent, fitted with robotic arms that guide the drill into the seafloor. The Gulf of Mexico could produce a total of 15 billion barrels, the coast of Brazil 30 billion, and the coast of Angola and elsewhere along West Africa another 30 billion — totaling some 75 billion barrels. “This ultra-deepwater drilling moves into the realm of science fiction; it’s something no one ever believed would be possible,” says Lynch. By the year 2005, a fifth of the world’s oil could be recovered from such deepwater drilling.
