Over the past 150 years oil has remained the world’s single most important source of energy — providing about 40% of the world’s energy — followed by coal at 26%, natural gas at 22%, hydro/nuclear at 10%, with wind and solar at just a few percent. Oil is also the lowest cost source of high density energy — oil energy has until recently always been considered “cheap.” In the US, about 70% of all oil consumed is used to produce transportation fuels, including gasoline, jet fuel, diesel, and kerosene. One could easily say that the world, including the US, is literally “hooked” on oil.

In 1938 the King of Saudi Arabia offered to sell all of his oil mineral rights for $5 million. Today, the oil industry is the largest industry in the world — $2 to $4 trillion per year depending on the price of a barrel of oil.

Rex Tillerson, CEO of ExxonMobil, the world’s largest public oil company, recently stated, “I expect the current economic downturn to be a temporary event and that robust energy demand from developing nations would be restored quickly. Exxon will maintain its long-term view on investment strategy in the face of the faltering economy.” A reasonable translation of this means that oil supply will not be able to keep up with demand.

The US uses about 21 million barrels of oil per day, or 7 billion barrels per year, and its needs have increased until just recently at a rate of about 1.5% per year. However, the US is capable of producing only about five million barrels of oil per day. The other 16 million barrels must be imported from oil producing countries such as, Canada, Mexico, Saudi Arabia, Russia, Venezuela, Nigeria, and a few others. Canada is currently our largest source of oil.

Out of the 209 countries of the world only 112 produce oil; Saudi Arabia, the largest producer of oil, produces about 10 million barrels of oil per day.

From the 1920s to the 1940s, the US was the world’s largest oil producer. With demand for oil growing, except for today’s “temporary pause” due to the world financial crisis, there is another serious issue that must be addressed — globally about 80% of all oil fields are experiencing serious production declines of 6% to 9% per year. In fact, Mexico supplies the US with about 16% of its oil imports representing about 78% of Mexico’s total oil exports. Mexico is currently experiencing a 16% production decline on its Cantarell Oil Field, the third largest oil field in the world. Soon, Mexico will need all of its oil to meet its own domestic needs.

The US, with five percent of the world’s population, uses about 25% of the world’s 85 million barrels of oil production per day, or 31 billion barrels per year. Countries like China, with 1.7 billion people, and India, with 1.1 billion people, use only a fraction of what we use per capita. However, big changes are underway in both of these countries — as well as in many others.

There is also a lot of talk about drilling off shore to find the oil that we need. There is no question that in time and with a great amount of capital investment, some additional oil fields can and will be found. The critical problem is that not enough oil will be found to meet the world’s growing needs. With less oil production in the US today, there is one indisputable fact — the US will be even more dependent on foreign oil imports in the years ahead. Matthew Simmons, a highly respected oil expert, predicts in his book,
“Twilight in the Desert,” that most of Saudi Arabia’s giant oil fields, including the Ghawar field (the world’s largest oil field which has been producing about five million barrels of oil per day for more than 50 years) is now or will soon experience the same fate as Mexico’s Cantarell Field — inexorable decline.

All of this simply means that the US will always be dependent on other oil-producing countries to provide enough oil to meet its growing needs. This will be true unless and until the US embarks on establishing true alternatives to oil. However, despite best efforts to date, such an alternative is not yet on the horizon — certainly not in the foreseeable horizon. Even the most promising alternatives to oil are unable to significantly impact US oil energy demand.

To solve the oil energy challenge, the US government must do the following:
• Recognize that there is a serious long-term oil energy problem facing our country (and the world) today.
• Make finding or inventing meaningful new renewable technologies to replace oil a top priority.
• Fund the effort with many multi-billions of dollars—this would likely be one of the most beneficial parts of a true long-term financial stimulus package.
• Financially incentivize scientists and inventors to find and invent new technologies that are needed to replace oil.
• Provide proper recognition (i.e., an equivalent of a Nobel Prize) for people who create viable, commercial alternatives for oil or its more efficient use.

At the same time, we must be prepared to wait 10 to 20 years for new technologies to evolve. There are no quick fixes.

As a bridge to the energy future, it would seem that more time, effort, and money must be invested in improving current enhanced oil recovery (EOR) technologies. Today there are an estimated 6.2 trillion barrels of oil trapped in existing global oil fields. If only 10% of this oil could be recovered it would provide an additional 620 billion barrels of oil, or enough oil for another 20 years, the time we need, at the current global annual consumption rate of 31 billion barrels of oil. In the US, there are an estimated 600 billion barrels of oil trapped in existing oil fields. At 10% additional recovery, this translates into an additional 60 billion barrels, or just under nine years of supply at the current consumption rate of 7 billion barrels per year. EOR technologies truly provide logical “bridges to the future.” EOR technologies find oil where oil has already been found – in existing oil fields. The environmental impact of such technologies is far less than other alternatives and within EOR some technologies are even better than others.

There is no quick fix to the current oil energy crisis. Many knowledgeable experts believe that solving our growing oil energy needs must be considered the number one global challenge of the 21st Century — nothing else comes close. The time to start addressing this need is today. Tomorrow will be too late.

C. Paul Davis is Senior Vice President of Titan Oil Recovery, a microbial enhanced oil recovery company that uses field-proven biochemistry and microbiology to achieve additional oil production from existing oil fields.