JOHN YDSTIE, host:
Bolivia's announcement comes as the price of crude oil continues to rise. It's now hovering around $74 a barrel. That's a 45 percent increase from a year ago. With the high cost of crude oil, more people are looking for alternative sources of energy. And we're taking some time on Tuesdays to meet some of them.
As part of our discussion on the future of fuel, NPR's Scott Horsley explores how quickly those alternatives may be needed.
SCOTT HORSLEY reporting:
Earlier this year, Chevron announced a major new discovery; a test well off the coast of Africa revealed what could be as much as one billion barrels of oil. That sounds like a lot, until you realize the world consumes a billion barrels in less than two weeks. And big discoveries, like Chevron's, are getting fewer and farther between. Gone are the days when a Hillbilly, like Jed Clampett, could strike black gold by accident while shooting at some food.
(Soundbite of TV program, “The Beverly Hillbillies”)
Unidentified Man (Actor): Mr. Clampett, that swamp of yours is full of oil.
Mr. BUDDY EBSEN (Actor): (As Jed Clampett) I could have told you that.
Unidentified Man: Well, my company would like to pump it out.
Mr. BUDDY EBSEN: Yeah, I'd like that, too. But I just can't afford to have it done.
(Soundbite of laughter):
Unidentified Man: Oh, no. Look, you don't understand. You see, you're a very rich man.
HORSLEY: Oil production in the United States peaked back in 1970, while the Beverly Hillbillies was still on the air. Some analysts believe world production is close to maxing out, as well.
Mr. MATTHEW SIMMONS (Author, Twilight in the Desert): By show of hands, how many of you have ever run out of gas in a car. I bet you did it the same way I did. You just forgot to look at the fuel gage.
HORSLEY: At a California energy conference in February, author and investment banker Matthew Simmons warned many people have been ignoring signals from the global fuel gage. And, as any one who's ever had to carry a gas can knows, that can lead to a rude awakening.
Mr. SIMMONS: What I find interesting is that cars can run at 70 miles per hour to the last second until they run out of gas. And the moral of that story is that energy shortages can happen instantaneously.
HORSLEY: Simmons believes we're nearing such a shortage. In his book, Twilight in the Desert, he argues that Saudi Arabia has overstated its ability to pump more oil. And once Saudi production peaks, he says, oil production around the world will enter a period of irreversible decline.
Simmons isn't the only one sounding that alarm. Other books on the same shelf carry ominous subtitles like, The Impending World Oil Shortage, and How You Can Thrive When Oil Cost $200 A Barrel. Simmons argues the day of reckoning is coming sooner, rather than later.
Mr. SIMMONS: Peaking of usable energy is basically either, A: approaching the front door, B: knocking at the world's door, or now, inside the house. And the worse thing we can do is be in denial.
HORSLEY: Energy analyst and historian, Daniel Yergin, has heard these arguments before. He counts five different periods when the world feared it was running out of oil. The first was in the 1880s. Such fears usually gain traction when oil prices are high. But each time, Yergin says, the dire warnings have proved premature.
Dr. DANIEL YERGIN (Chairman, Cambridge Energy Research Associates): The last time before this time was in the 1970s when people said we're going to fall off the oil mountain and live in an age of permanent shortage. Since then, world's supplies have increased 60 percent. So I don't see why we're at the end of technology now and why it would be finished now.
HORSLEY: Yergin's company, Cambridge Energy Research Associates, has done a field-by-field analysis of oil deposits around the world. He expects producers can keep pumping more oil for the next 20 to 30 years. That's not to say it will be easy to produce that much oil. But Yergin says wars, hurricanes and a shortage of trained engineers, pose a bigger challenge than how much oil is in the ground.
Dr. YERGIN: There is ample supplies beneath the surface of the planet to have significant growth in oil supply for quite a number of years. The technology is there. The resources are there. But the real question is what happens above ground?
HORSLEY: Yergin is encouraged by the growing interest in the energy business, saying he's never seen such a bubbling up of technology. Many of the venture capitalists, who helped spark the Internet boom, are now focused on meeting the world's energy demands.
Dr. YERGIN: You'll have innovators and entrepreneurs and people trying ideas that may seem sensible today, or may seem way out. But out of that whole soup will emerge some new ways of doing things.
HORSLEY: Whether you believe oil is nearing its peak, as Simmons does, or decades away from it, like Yergin, Paul(ph) says it's important to consider alternative sources of energy. He says new fuels will be needed to supplement oil, even if they're not needed to replace it.
PAUL: The energy demands in the world are not going to go down. So I guess the way I would put it--we're going to need every molecule and every electron.
HORSLEY: And that means some new Beverly Hillbillies could make their fortunes from ethanol, wind power, or another form of energy instead of bubbling crude.
Scott Horsley, NPR News.
YDSTIE: Forecast for global oil production in the coming decades vary. You can see three of them at npr.org.