The end of oil? Guess again

Sure, the easy-to-find black gold is getting scarce. But Big Oil has a few cards left to play -- no matter what the cost to the environment or the developing world.

By Sonia Shah

Sept. 15, 2004 | Are we "out of gas"? Is it the "end of oil," as the titles of two recent books suggest? Environmentalists and human rights advocates everywhere might breathe a sigh of relief, if so! Now, finally, we can move on from rapacious, climate-clogging, Nigerian-and-Colombian-slaughtering hydrocarbons to something better. Big Oil is going down! Right?

If only.

Keep in mind that the $2 trillion oil industry is well-practiced at rising miraculously from the dead. In 1879, the light bulb was invented, in a stroke destroying the entire market for oil, which was premised on supplying kerosene lamps. In 1909, the world's first Big Oil company, Standard Oil, was beheaded. In 1960, OPEC was formed and oil companies were effectively shut out of more than half the world's known oil reserves. In 1997, the Kyoto Protocol threatened to permanently curb global oil consumption. Now, in 2004, so many people want so much oil that it seems there just isn't going to be enough. Demand is overtaking supply.

But is it?

True, from the perspective of the Big Oil companies, all the good stuff -- the kind of oil that makes itself known by conveniently appearing in puddles at the surface, generously spurting out of the ground under its own pressure, and politely declining multibillion-dollar state interventions for security -- is gone. But this, arguably, has been true since the early 1970s, when the flow of oil from stable, homey places like Texas and Oklahoma sputtered out.

Since then, Western oil companies have been successfully drilling for oil in progressively more hostile, unforgiving places, from the deeply frozen tundra of the north slope of Alaska and the densely populated swamps of the Niger delta, to the stormy North Sea and thousands of feet under the shifting waters of the Gulf of Mexico. And each foray has left broken communities and ecosystems in its wake.

Big Oil's quest to survive in the age of diminishing oil reserves will likely intensify the trend.

Although the big oil companies could easily ramp up their solar and wind power divisions in preparation for the end of oil -- for the cost of a single leg of a drilling rig, for instance, oil companies could build a solar-cell manufacturing plant that would make the price of solar power competitive with coal -- the evidence suggests they have quite different plans in mind.

Next page: From the tar sands of Canada to the oxymoronic "clean coal"