Running Short, No Matter What

The growing chorus of Cassandras warning of potentially disastrous oil shortages gets a powerful new voice this week. In a 291-page report to be released at simultaneous press conferences in eleven countries, a group of 35 experts concludes that by the year 2000 oil production in the non-Communist world could fall short of meeting demand by 15 million to 20 million bbl. per day --about as much as the U.S. uses now. Moreover, the shortfall is likely to occur even if coal production doubles, the output of nuclear-generated power multiplies 15 times, conservation measures cut the increase in petroleum demand to half its historic growth rate, and the "real" price of oil (discounted for inflation) rises 50%, further reducing consumption.

Though it is gloomier than some previous reports, the conclusion is not brand new. What makes it weighty is its global authorship. The report ("Energy: Global Prospects 1985-2000") is the product of a 2 1/2-year study by the Workshop on Alternative Energy Strategies, a group organized by MIT Professor Carroll Wilson. He assembled 35 industrial, government and academic experts from twelve oil-importing nations and three exporters: Iran, Mexico and Venezuela. They plotted likely oil demand and supply under a wide range of assumptions: high and low rates of economic growth, "vigorous" and "restrained" government conservation policies, and the effects of oil-price rises of different amounts.

How Soon? No matter how the WAES experts added up the numbers, they kept coming up with a shortage. The biggest question is: How soon? The answer, the WAES group found, depends heavily on the production policies of Saudi Arabia, which has the world's largest known oil reserves. If the Saudis decide that oil in the ground is more valuable than oil sold on the market, and cap production at the present level of around 9 million bbl. per day, the shortage shows up as early as 1981. If the Saudis more than double output, to 20 million bbl. per day, the shortage is delayed --but only for eight years, to 1989. Even if there is no production limit at all, shortages show up in the late 1990s. And such a delay might not be any boon to consuming nations: because of the long lead times needed to develop alternate sources of fuel, the situation "could become critical before it seems serious."

The report is open to objection. Its demand estimates assume a free world economic growth averaging 4.4% a year, which some experts consider high. It also assumes that no more than 20 billion bbl. per year--the equivalent of two Alaska North Slopes--can be added to the world's proven oil reserves. Some other studies have suggested that the amount of oil waiting to be found is much higher. Wilson says that the report was intended less as prophecy than as a call to action. It advocates unprecedented international cooperation in devising new technologies, sharing existing resources and enforcing conservation on a basis of "wartime urgency"--a phrase strikingly reminiscent of Jimmy Carter's call for the "moral equivalent of war in the fight to save energy."

This file is automatically generated by a robot program, so viewer discretion is required.