Are We at the Bottom of the Barrel?

The U.S. Government Accountability Office (GAO) has released “Crude Oil: Uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and decline in oil production.” The study addresses the questions, “have we reached peak oil production and how much oil is really left to meet ever increasing energy demands?”

Covering many unanswerable factors in determining the answer, the GAO states that peak production will be anytime from now until 2040, but this is a speculative estimate. True numbers are uncertain because more than 60 percent of reserves are in countries with unstable political conditions; the oil is not accessible due to environmental or technological challenges; and future economic growth and political policies are unknown.

From “Crude Oil:”

In the United States, alternative transportation technologies face challenges that could impede their ability to mitigate the consequences of a peak and decline in oil production, unless sufficient time and effort are brought to bear. For example:

- Ethanol from corn is more costly to produce than gasoline, in part because of the high cost of the corn feedstock. Even if ethanol were to become more cost-competitive with gasoline, it could not become widely available without costly investments in infrastructure, including pipelines, storage tanks, and filling stations.

- Advanced vehicle technologies that could increase mileage or use different fuels are generally more costly than conventional technologies and have not been widely adopted. For example, hybrid electric vehicles can cost from $2,000 to $3,500 more to purchase than comparable conventional vehicles and currently constitute about 1 percent of new vehicle registrations in the United States.

- Hydrogen fuel cell vehicles are significantly more costly than conventional vehicles to produce. Specifically, the hydrogen fuel cell stack needed to power a vehicle currently costs about $35,000 to produce, in comparison with a conventional gas engine, which costs $2,000 to $3,000.

See the Source:
GAO – U.S. Government Accountability Office
Crude Oil: Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production
Energy Bulletin