One question raised repeatedly involves the remaining time before oil reserves are depleted, that is, the end of the oil age and the beginning of the alternative energy era. Concerning the depletion of oil reserves, both local and international oil companies continue to discover new oil fields, and the quantities of oil discovered remain much larger than what has been consumed so far. The best proof of this is the offshore fields discovered on both sides of the Atlantic, in Angola and Brazil for example, and the rising output in the Caspian region. This is not to mention shale oil currently being produced in North America, the ongoing rise in the productive capacities of oil-producing Gulf countries (e.g. Saudi Arabia, the UAE and Kuwait), and the large increase in Iraqi productive capacity. Oil companies use cutting-edge technologies to discover new fields in the deep sea or in rocky layers of the earth, in addition to enhancing production yields from the already-discovered fields. This is known as enhanced oil recovery (EOR), where, instead of extracting only 15 percent of the oil reserves in a given field, as was the case in the majority of fields in the Middle East until recently, a much higher proportion is now being extracted. Statoil (Norway) recently announced that it is in the process of establishing a research center, specializing in EOR. Bear in mind that Statoil is currently extracting about 50 percent of the oil in the fields it operates, while the global EOR average is about 35 percent. Statoil aims to improve EOR methods to increase recovery by 1 percent annually, with a view to reach an EOR rate of 60 percent throughout its fields. Improving EOR methods means that it will be possible to increase oil output from each respective field by many times over the quantities that were possible to extract in the past, using conventional methods. For a company like Statoil, for instance, a 1 percent increase in EOR rates raises the company's oil reserves by about 327 million barrels per year. There is another important technique to increase the size of oil reserves, even though it does not fall under the category of conventional production, that is, production from oil fields: Shale oil production. In North America, there is increased reliance on shale oil, the production of which has pushed crude oil output in the U.S. up by 3.7 percent compared to the previous year, and it now stands at approximately 6.5 million barrels per day. This level of output has not been seen in the United States since January 1997. Experts predict that U.S. oil production will reach about 8 million barrels per day during the next five years. The main reason for the increase in production is fracking technology, whereby shale rocks are cracked to extract hydrocarbons. According to U.S. Department of Energy data, the United States produced around 83 percent of the oil it consumed this year. Other technologies currently being used in oil discovery include horizontal drilling, rather than vertical drilling, where it is now possible to drill wells to reach adjacent oil reservoirs. Technology also plays an important role by improving the quality of petroleum products, especially gasoline and diesel, which are rendered more suitable with modern environmental laws. It is worth noting here that diesel has become the most widely used transport fuel in Europe. The Secretary-General of OPEC Abdullah al-Badri, in a speech in Berlin last month, predicted that energy consumption will increase in the future, particularly oil consumption, because the world is living today in the era of 'energy poverty', as he said. Badri said that the world population is expected to rise to 8.6 billion people by 2035, an increase of 1.6 billion people from the present day. According to Badri, this increase means that the world will add the equivalent of the populations of India and the United States combined to its population in 2035. The OPEC Secretary General said that the world economy was likely to improve in the future, with further trade liberalization and expansion, particularly in the emerging countries where poverty rates were higher. Indeed, there are 3 billion people living on 50 cents a day, 1.4 billion people with no access to electricity, and 2.7 billion people who rely on biomass to meet their basic needs. Badri also expected that demand for energy would increase, to meet the rise in consumption and higher living standards. OPEC's studies suggest that energy consumption worldwide will grow by 50 percent in 2035 compared to 2010. This would lead to more consumption of most energy resources, but oil would nevertheless remain the primary source of energy until 2035 – despite the fact that its share among overall energy resources will decline during this period from 34 to 28 percent. As is known, oil is chiefly consumed in the transportation sector. Today, there are around 800 million vehicles on the world's roads using gasoline or diesel. As is also known, oil is a depleting substance, which means that one day, oil will no longer be available. But the main problem does not lie here. Instead, the biggest challenge is to disengage from the culture of the ‘oil rush', and seek early adjustment of the resulting corruption and extreme public and private spending that is not commensurate with the output of producing countries. * Mr. Khadduri is a consultant for MEES Oil & Gas (MeesEnergy)
