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Page added on February 25, 2015

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Oil: Shocking how vital it still is

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The idea is a pretty simple one. Every now and again – amid all the swirling reports and breaking news – it is worth taking a pause and bringing together what we know about the most important resource in the world.

As part of the Big Oil Drop project, I was asked a straightforward question. “Why is oil so important? And could you write about it.”

It was so straightforward a question that it sounded faintly ridiculous.

Well, of course oil is important, I blustered, erm, we need it to drive in our millions of cars, jobs depend on it, the supply of energy is at the heart of much of global politics (just look at Russia now), wars are fought over it, without oil the lights would go out…

I tailed off, realising that yes, of course, I knew oil was important. But quite how important slightly eluded me.

And so I started digging around for some facts. And only when you start doing that does the hugeness of its influence on the global economy become clear.

Ryan Carlyle, the US engineer, wrote in Forbes about why oil is vital. “You can’t move anything, anywhere faster than about 25mph without oil,” he said.

“You can’t operate a modern military, and you can’t run a modern economy. There is no doubt in my mind whatsoever that modern civilisation would collapse in a matter of months if oil stopped flowing.

“Oil is about as important to the developed world as agriculture.”

Oil and food (and let’s include water in that, to avoid argument) are the two most important resources on the planet.

The United States consumes 19 million barrels of oil a day. A barrel of oil is about a bath’s worth.

China consumes 10.3 million, Japan 4.5 million and the UK 1.5 million.

Every day, the world consumes 91.2 million barrels of oil, according to the US Energy Information Administration.

That’s a lot of bathfuls.

And that consumption figure will go up, not down.

Every week, 1.5 million people are added to the world’s urban population. And that tends to add to our consumption of oil as societies move from an agrarian economy to a consumption and manufacturing economy.

The growth of the “emerging seven” countries (China, India, Brazil, Russia, Indonesia, Mexico and Turkey) will only add to this upward pressure on demand.

As a recent report from the accountants PwC revealed, emerging economies, most notably China and other fast-growing Asian economies, account for nearly half of all infrastructure spending (that’s the development of cities and factories, in the main).

That’s up more than 10% since 2006. And it all adds to oil demand.

Because the more we live in cities – and the more countries develop – the more we want cars to drive around in and lorries to deliver the goods we want to consume.

The global vehicle fleet (commercial vehicles and passenger cars) is predicted to more than double from about 1.2 billion now to 2.4 billion by 2035. Most of that growth – 88% – is in the developing world and nearly all of it – just under 90% – will be fuelled by oil.

Of course, there are alternatives to oil. And across the world, environmental targets and efficiency gains are having an impact.

But those developments are only slowing the increase in demand. They are nowhere significant enough to reverse it.

Look at cars. In the forecasts, transport demand for oil rises by about 30% by 2035, while the actual number of vehicles doubles.

But 30% is still a significant rise.

Renewable energy is replacing some of the world’s appetite for oil.

A recent report by the Economist Intelligence Unit suggests that the growth of renewables will outpace the growth of oil and coal products in 2015.

You can read some interesting analysis of that report (and see an important graph) here.

But although the growth of renewable energy is rapid, it is from a very low base.

And it was put in perspective by Bob Dudley, the chief executive of BP.

“Fossil fuels [oil, gas and coal] are projected to provide the majority of the world’s energy needs, meeting two-thirds of the increase in energy demand out to 2035,” he said at the launch of the oil giant’s Energy Outlook 2035.

“The strong growth of US tight oil [that’s oil taken directly from rocks via the process of fracking] in recent years has had a dramatic impact, with oil increasingly flowing from West to East rather than East to West.

“This is likely to continue, with strong growth in China and India driving energy demand.”

Peak oil – that is the theoretical moment when oil extraction will reach its height and inevitably decline – has been long predicted and never arrived.

In fact, you can go back to the 19th Century to hear predictions oil would run out during the “lives of young men”.

More than 100 years later, we are still waiting.


21 Comments on "Oil: Shocking how vital it still is"

  1. forbin on Wed, 25th Feb 2015 8:44 am 

    take a finite quantity of anything , use it at rate X and in Y years time you’ll run out …..

    following production curves for any finite resource and you will , after X amount years , find it had peaked and declined

    the maths are simple , but predictions of any said peak are hard for a given date for any resource but they will peak.

    I suspect the author of the article majored in Business Studies and failed his maths o-levels…..

    Still gotta laff haven’t you ?


  2. Davy on Wed, 25th Feb 2015 9:09 am 

    Will someone please pay Bob Dudley, the chief executive of BP, to return to civilian life permanently at a country club of choice and leave the energy forecasting to the energy professionals on PO.

  3. Revi on Wed, 25th Feb 2015 9:39 am 

    He says how vital it is, and how we need to have bathtubs of it just to function, and how we are going to need more of it, and then ends with:
    More than 100 years later, we are still waiting.


  4. Rodster on Wed, 25th Feb 2015 9:46 am 

    “Peak oil – that is the theoretical moment when oil extraction will reach its height and inevitably decline – has been long predicted and never arrived.”

    So then why are the energy producers going after ‘tight oil’ if peak oil doesn’t exist?

    As Arsenio Hall used to say: “things that make you go hmm”.

  5. rockman on Wed, 25th Feb 2015 9:59 am 

    Rodster – The same old misdirect implying that the date of PO is THE important issue while avoiding a discussion of diminishing reserves and the higher prices you noted. Fortunately not as many folks are not taking this bait as they once did,

  6. Nigel on Wed, 25th Feb 2015 10:12 am 

    Kamal Ahmed – business editor of the BBC.

    Words fail me…. I pay this idiots wages…

  7. green_achers on Wed, 25th Feb 2015 10:39 am 

    Shocking how vital t still is, and nauseating how little we’ve done to remedy that situation.

  8. Nigel on Wed, 25th Feb 2015 10:56 am 

    I’m annoyed now, how can someone who is employed to be THE business editor of the BBC not know how important oil is!? And, why does he suggest that somehow oil and agriculture are mutually exclusive. This is metropolitanism at its worst – obviously he think agricultural people work with scythes and horses… idiot, fool, twonker…

  9. Plantagenet on Wed, 25th Feb 2015 11:06 am 

    We live in the OIL AGE. Our entire economy and mode of life is based on using oil. Its not shocking how vital oil is—its shocking that so many people don’t realize how vital oil is.

  10. Pveroi on Wed, 25th Feb 2015 11:14 am 

    “Why is oil important” is a question being answered in elementary schools today – and much better than what you find here. This article is for 90 year old Alzheimer’s patients. Author is pathetic. Children around me understand peak oil just fine no thanks to you.

  11. J-Gav on Wed, 25th Feb 2015 3:02 pm 

    Only 4 or 500,000 products we use are derived from petroleum. So, yeah, sure, our dependency upon it is bound to be really shocking … for anybody who’s just awakened from a coma after 50 years.

  12. shortonoil on Wed, 25th Feb 2015 4:02 pm 

    the supply of energy is at the heart of much of global politics

    What is deliciously ironic is that he states in black, and white “energy is at the heart of much of global politics” but continues as if barrels of oil are energy units. Hayward, a previous BP CEO and graduate petrologist said, “everyone knows oil floats”, when confronted with the damage that was feared to happen to the Gulf from the Macondo well blow out by the sinking of the heavy fractions. BP sure can spawn them!!

  13. Speculawyer on Wed, 25th Feb 2015 4:24 pm 

    Yeah, it is a bit shocking. Everyone knows it is a finite commodity that we literally burn up . . . you’d think that people would work a bit more to reduce dependence on it. And some are. But it is kinda crazy they way some people allow themselves to be put into such a vulnerable position.

  14. Makati1 on Wed, 25th Feb 2015 6:12 pm 

    Cheap 40 proof vodka is NOT 12 year old Chivas Regal…and the liquids called “petroleum” are not real oil if you look at NET ENERGY. Net energy has been declining since the 70s at least, but you NEVER see a graph of stats that mention it. EROEI.

    We waste what oil energy we have left making plastic throwaway crap for profit instead of using it to build a world we can live in after it is gone.

  15. Ted Wilson on Wed, 25th Feb 2015 6:26 pm 

    Dog says “Bow Bow”, Pig says “Oink Oink”, BP says “Oil Oil”.

    After all an oil company will talk about great future for Oil. In their annual energy stats, they include
    Gas to Liquids,Coal to Liquids,Bio-fuels in Oil category and this is gross mis-representation of facts.

    Soon they may include edible oils like Sunflower oil, Canola Oil, Coconut and Palm Oil in Crude Oil category.

    Their ais is just to show that World consumes more Oil than any other source of energy.

  16. Mark Shaw on Wed, 25th Feb 2015 6:34 pm 

    Recently there was news that Oil companies gave $1.2 million to a scientist to spread the news that Global Warming is Hoax.

    Similarly oil companies should have given money to Forbes, BBC and many other news media to say that Oil will still be the important fuel even in 2035.

  17. Speculawyer on Wed, 25th Feb 2015 9:02 pm 

    “Ryan Carlyle, the US engineer, wrote in Forbes about why oil is vital. “You can’t move anything, anywhere faster than about 25mph without oil,” he said.”

    Yeah . . . you might want to talk to Elon Musk about that.

  18. GregT on Wed, 25th Feb 2015 9:53 pm 


    Elon Musk, his capital, his technologies, and his industrialism, are all reliant on oil. Without oil, Elon Musk is plowing his fields with Oxen to feed himself, just like very other human being on this planet.

    You are living in a non-reality conspiracy theory.

  19. shortonoil on Thu, 26th Feb 2015 5:26 am 

    Without oil, Elon Musk is plowing his fields with Oxen to feed himself, just like very other human being on this planet.

    During the early Middle Ages wealth was calculated in oxen. The average peasant was worth about 1 oxen. To suit up a Knight, and his horse, and employe a squire cost about 17 oxen. You had to be rich before you could go around murdering people.

    In truth we will never be without oil. We will just have oil that no one can afford to take out of the ground, or afford to buy. The Elon Musk’s of the world will still be the rich ones. They will have TWO oxen to feed themselves with! Their life’s ambition will be to get a suit of armor, and a horse.

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  21. Davy on Fri, 3rd Feb 2017 5:09 am 

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