The New York Times reported yesterday that new technological innovations are re-energizing the oil industry in the United States and world-wide, and as a result, OPEC could see its clout increase in the coming years. The newspaper reported: The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels. In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s. And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s. Exxon, like Chevron, will use three-dimensional imaging of the underground field and the injection of a gas in this case, carbon dioxide to flush out the oil. Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world s reserves are drying out have given way to predictions that more oil can be found than ever before. In a wide-ranging study published in 2000, the U.S. Geological Survey estimated that ultimately recoverable resources of conventional oil totaled about 3.3 trillion barrels, of which a third has already been produced. More recently, Cambridge Energy Research Associates, an energy consultant, estimated that the total base of recoverable oil was 4.8 trillion barrels. That higher estimate which Cambridge Energy says is likely to grow reflects how new technology can tap into more resources. It s the fifth time to my count that we ve gone through a period when it seemed the end of oil was near and people were talking about the exhaustion of resources, said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after both world wars and in the 1970s. Back then we were going to fly off the oil mountain. Instead we had a boom and oil went to $10 instead of $100. There is still a minority view, held largely by a small band of retired petroleum geologists and some members of Congress, that oil production has peaked, but the theory has been fading. Equally contentious for the oil companies is the growing voice of environmentalists, who do not think that pumping and consuming an ever-increasing amount of fossil fuel is in any way desirable. Increased projections for how much oil is extractable may become a political topic on many different fronts and in unpredictable ways. By reassuring the public that supplies will meet future demands, oil companies may also find legislators more reluctant to consider opening Alaska and other areas to new exploration. On a global level, the Organization of the Petroleum Exporting Countries, which has coalesced around a price of $50 a barrel for oil, will likely see its clout reinforced in coming years. The 12-country cartel, which added Angola as its newest member this year, is poised to control more than 50 percent of the oil market in coming years, up from 35 percent today, as Western oil production declines. Oil companies say they can provide enough supplies which might eventually lead to lower oil and gasoline prices but that they see few alternatives to fossil fuels. Inevitably, this means that global carbon emissions used in the transportation sector will continue to increase, and so will their contribution to global warming. The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world s energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore, and, of those, few are open to investors. At Bakersfield, for example, Chevron is using steam-flooding technology and computerized three-dimensional models to boost the output of the field s heavy oil reserves. Even after a century of production, engineers say there is plenty of oil left to be pumped from Kern River. We re still finding new opportunities here, said Steve Garrett, a geophysicist with Chevron. It s not over until you abandon the last well, and even then it s not over. Some forecasters, studying data on how much oil is used each year and how much is still believed to be in the ground, have argued that at some point by 2010, global oil production will peak if it has not already and begin to fall. That drop would usher in an uncertain era of shortages, price spikes and economic decline.
