Oil crisis

The 20th century can be described as the century of oil. The output of oil soared from 20 million tons in 1900 to 35.5 billion tons in 2000. Because of the high efficiency of oil, all countries after the industrial revolution have developed a route that uses oil as the main energy source without exception. In the second half of the 20th century, oil became the mainstream of world energy, and the world economy had made brilliant achievements, making it difficult for coal to reproduce its former glory. However, most people never thought that the oil resources that nature bestowed on mankind were not unlimited, and that oil crises would happen again and again. People who are accustomed to oil have no mental preparation for how to live when the world does not have oil.

main content:

  1. 1 With the arrival of peak oil, the gap between supply and demand is widening
  2. 2 A new round of oil crisis
  3. 3 Where is the way out
  4. 4 China's oil


1. With the arrival of peak oil, the gap between supply and demand is widening

With the arrival of peak oil, the gap between supply and demand is widening
The civilization of human development in the 20th century was largely based on the belief in the unlimited supply of cheap oil, and the demand for oil in all countries was growing rapidly. But can world oil production and supply expand indefinitely? the answer is negative. As early as the 1950s, a geophysicist named M. King hubbert of Shell Petroleum Company predicted that when we ran out of half of the natural world’s oil and there was a "peak", increasingly Increasing demand will face dwindling supply, which may cause catastrophic consequences. This seems to be a spell, which is incredible. Hubbert used the discovery rate of petroleum reserves to first estimate the United States, and believed that when the rate of newly discovered petroleum reserves began to decline, it could be calculated that half of the country's (or region) total petroleum reserves was the "peak". , From the rate of mining can predict when the peak will come. This prediction was confirmed in the United States decades later and is called the "Hubbert Peak" (Figure 1).

Figure 1: Schematic diagram of Hubbert peak

The so-called "discovery rate" does not mean that new reserves will not be discovered, but that at the beginning, reserves are always found to have increased a lot. A large number of oil deposits have been discovered and later discovered, but new discoveries are becoming more and more. not enough. Not only in the United States, but also in the world, newly discovered oil reserves have been declining for decades. According to the world's oil reserve discovery rate from rising to falling, using the Hubbert peak calculation method, the total global oil reserves are about 2 trillion barrels (equivalent to about 280 billion tons). How reliable is this calculation? The United States Geological Survey (USGS) conducted a detailed survey between 1995 and 2000, and concluded that the world’s total oil reserves are at least 2 trillion barrels, and possibly 2.7 trillion barrels (about 375 billion tons). . This survey report is quite consistent with the results of Hubbert's calculation method. According to this conclusion, the peak of oil reserves is about 1 trillion to 1.35 trillion barrels (140 billion to 187.5 billion tons).

This peak oil means that the era of oil shortage has begun. Statistics show that up to now, the accumulated oil produced in the world has exceeded 160 billion tons, which has exceeded the peak of reserves. The Hubbert peak shows that the oil crisis does not have to wait until the oil reserves are completely depleted, but occurs with the arrival of the peak. Because of the upward trend of oil demand, it will increase by a few percentage points every year, at least 2%. On the other side of the peak, oil supply will decline at roughly the same rate. In this way, there is a gap between supply and demand, and this gap is expanding at a rate of about 5% per year. This is the oil crisis! If there are no alternative energy sources to fill this gap in time, chaos and disasters will occur in the world's energy supply and demand. If we increase the intensity of oil extraction to meet the temporary increase in demand (maintain the current world oil production at around 4 billion tons or more per year) and temporarily "bury" the crisis, the consequences may be even more serious. One day An explosive disaster will happen.

Perhaps some people think that the peak oil has not come so soon, and new oil deposits continue to be discovered? Perhaps one day, a large oil reservoir like the Middle East will be discovered, and the arrival of peak oil may be delayed by 10 or 20 years. This kind of speculation may be possible, but it is subjectively blind. Even if the discovery and exploitation of large oil fields can lag the peak for several years, what is 10 or 20 years for the development of human society?

What is frustrating is that in addition to petroleum, other fossil energy sources like coal and natural gas also have the same pattern, and there are also the problem of peaks, but the peaks will not come at the same time due to different development priorities. But judging from the difference of only a few decades, it is also worrying enough. If you look at the long river of energy history, fossil energy is only a short period of time, and disappointment is of no avail (Figure 2).

Figure 2: The fossil fuel era of human energy

2 A new round of oil crisis

A new round of oil crisis
In fact, the oil crisis has occurred again and again, and it has become stronger again and again.

The first oil crisis occurred in 1973. In October of that year, the fourth Middle East war broke out between Israel and Egypt. In order to force the United States to give up support for Israel, Arab countries used oil as a weapon. A series of oil production reduction and embargo measures. In just three months, the international crude oil price soared from 3.1 US dollars per barrel to 12.6 US dollars, a full increase of more than three times. This triggered the most serious global economic crisis after the Second World War. During this crisis, industrial production in the United States fell by 14%, and industrial production in Japan fell by more than 20%. The economic growth of all industrialized countries has slowed down significantly. Many people feel deeply about this crisis and still have lingering fears.

OPEC (OPEC) is the Organization of Petroleum Exporting Countries, established in Baghdad, Iraq in 1960. It includes 11 major oil exporting countries, including Saudi Arabia, Kuwait, Iraq, Iran, Venezuela, Qatar, and the United Arab Emirates, and is headquartered in Vienna.

Maintaining oil prices is OPEC’s main task, and it has also established a system to regulate the output of various countries. In the year of its establishment, the oil output of OPEC member countries accounted for 80% of the world's total output. But by the late 1980s, oil production in non-OPEC countries had exceeded OPEC.

OPEC controls three-quarters of the world's known oil reserves. Currently, oil production accounts for one-third of the world's oil production. It is mainly used for export and has a strong influence on the world oil market. It is estimated that by 2020, its share of oil production may increase to 50%.

The second oil crisis occurred in 1978. At that time, the Islamic Revolution broke out and the political situation in Iran changed drastically. Oil production was affected, from 5.8 million barrels a day to 1 million barrels, breaking the fragile balance of global oil supply and demand. The Iran-Iraq war broke out the following year, the situation in the Middle East was chaotic, and oil production fell. The price of oil rose from US$13 to US$34 per barrel, causing the global economy to fall into depression.

The third oil crisis occurred in 1990. Iraq captured Kuwait, and the Gulf War broke out in January 1991. Iraq was subjected to economic sanctions by the international community, and the external supply of crude oil was interrupted. As a result, the international oil price soared to 42 US dollars per barrel. At that time, OPEC members led by Saudi Arabia rapidly increased their lives, quickly stabilized oil prices and resolved the crisis.

 Tips Gulf War
In 1990, Iraq launched an aggression against Kuwait, which triggered a punitive war against Iraq authorized by the United States, Britain, Australia and other Western countries. This is the Gulf War. The core content of this war is oil. If the Iraqi Saddam regime occupies Kuwait, it will have a quarter of the world’s oil resources, thus achieving the goal of controlling the economic lifeline of Western countries. As a result of the war, Iraq was defeated, and the oil that Iraq possessed by the United Nations imposed an embargo and sanctions could not be turned into hard currency.

The direct causes of the three oil crises mentioned above were all due to reduced oil production and supply, and soaring oil prices. These reasons can be said to be man-made and not due to the depletion of oil reserves, but they have already shown the power of oil: when oil supply suddenly decreases, the world's economy will be affected, and even an economic crisis will occur. Two-thirds of the world’s oil reserves are concentrated in the Middle East. The Middle East’s oil exports account for more than 14 of the world’s consumption. Always hold your breath and pay attention to the current situation in the Middle East.

At the beginning of the 21st century, a new round of oil crisis followed. Since 2000, oil prices have risen all the way, from 10 US dollars per barrel in 1999 to 70 US dollars in 2005 and 88 US dollars in 2007, and they are about to break the 100 US dollars mark. The crisis came quietly, causing many politicians to panic, and people seemed to feel bad luck. What is worrying is that this crisis will not ease with the end of the war like previous crises, but may be protracted. Because the growth of oil production is indeed slowing down, and even the production volume is gradually decreasing, while the world's demand for oil is still increasing. The current oil crisis is reflected in the rapid growth of oil prices. Inflation and speculation in the market are certainly one of the reasons for the rise in oil prices, but the main reason is that supply exceeds demand. This is exactly what oil supply is approaching or reaching its limit, and the emergence of "peaks" is inevitable. Phenomenon. The oil crisis is impacting the global economy and will undoubtedly affect the national economy and people's livelihood of all countries.

3 Where is the way out

Where is the way out
Although the oil crisis has appeared, and although there are still many people concerned about the impact of fossil fuels on the environment, some people still ignore it. They believe that oil is an indispensable component of national power and democracy and freedom. Where can a country be without oil, and that oil is international The decisive factor in the affairs, even in order to control the oil at all costs.

Many people in the scientific community believe that with the emergence of peak oil, the oil crisis has arrived. Some of them made pessimistic comments, believing that once there is no oil, the end of the world will come. The magnificent civilization achieved by mankind in the 20th century was due to the use of oil, and the advanced automobile industry relied on oil. Without oil, the civilized world would decline.

However, most people in the scientific community both oppose war and do not agree with the "doomsday theory." Although they are worried, they think there is a way out. The arrival of peak oil must be a serious warning to people. Oil reserves can only be maintained for decades. Now we must take action to develop alternative oil energy sources and gradually transition to an era without oil. This is also possible. of. If it is too late to wait until the last drop of oil is exhausted, then devastating disasters and chaos in the village will be inevitable. On the other hand, since the era without oil is always coming, why not act early to gradually adapt, and wait until the "doom" arrives before acting? If we develop more alternative energy sources as soon as possible, especially renewable energy, the reduction of fossil energy will not hinder mankind.

4 China's oil

China's oil
China used to be a backward country with a backward oil industry and was considered a "poor oil" country. In 1948, its oil production was less than 100,000 tons. After the founding of the People’s Republic of China, a large number of oil fields were discovered through a census. In the early 1960s, the "Songliao Oil Search Battle" was launched, and the Daqing Oilfield was discovered. Then, the Shengli Oilfield in Shandong was discovered in 1963, and the Shengli Oilfield in Tianjin was discovered in 1964. Dagang Oilfield, etc. The rapid increase in oil production has fundamentally changed the backwardness of China's oil industry and got rid of the label of oil-poor. By 1978, oil production exceeded 100 million tons, and it entered the ranks of the world's oil-producing countries. Crude oil production reached 150 million tons in 1995, ranking fifth only after Saudi Arabia (400 million tons), the Commonwealth of Independent States (350 million tons), the United States (330 million tons) and Iran (180 million tons). Before 1993, it could not only meet China's needs, but also provide exports. This situation lasted for more than 20 years and created a lot of foreign exchange. With the rapid development of the national economy, China's demand for oil has continued to increase. Domestically produced oil is no longer enough. Since 1993, China has once again become a net oil importer, with imports increasing to more than 43 million tons in 1999. With the addition of 160 million tons of domestically produced oil that year, the oil consumption at the end of the 20th century has exceeded 200 million tons, and in 2005 it was nearly 300 million tons. As China's oil reserves are relatively not abundant and the degree of provenance is low, although the output is not small, the stamina is insufficient. Nearly half of the current oil demand depends on imports. China has become the world's second-largest oil consumer and the third-largest oil importer, which is very detrimental to the country's energy security. What is worrying is that after years of mining, the remaining reserves that have been proven to be recoverable are not much, only about 2.4 billion tons, which has also passed the "peak", and the oil may be exhausted in more than 10 years.

It should be noted that the proportion of China's oil consumption in the total energy structure is still relatively small, currently accounting for only 20%. This is half the rate of 40% in developed countries in the world, and a lot less than the average of about 35% in developing countries. This ratio is obviously not conducive to economic development, because oil as an energy source is much more efficient than coal. Everyone in the world says that China's energy use efficiency is low. Apart from technical and other reasons, it also has a lot to do with China's coal-based energy structure. Therefore, the country is working hard to improve the energy structure, and it is understandable to increase oil consumption.

However, with the arrival of the world oil crisis today, relying on increasing imported oil to improve our energy composition seems to be struggling and it is difficult to work. Even if it is done temporarily, the cost is high and it cannot be sustained. The weakness of China's energy structure (the small proportion of oil) inadvertently left a favorable situation, that is, its ability to fight the oil crisis is relatively strong. Many people who believe that the world's oil resources are rich and have unlimited supply, are intoxicated with luxurious lifestyles, and are unprepared for crises, panicked when oil prices climbed all the way, first suffered a loss, but life was sad. So, how to fight the oil crisis? One example is worth learning from, and that is the story of the French developing nuclear energy to fight the oil crisis. Stimulated by the oil crisis in 1973, the clever French took up "nuclear weapons" and adopted strategic measures to vigorously develop nuclear energy, reducing their dependence on oil imports and making great achievements. It provides China with nuclear energy equivalent to nearly 100 million tons of oil every year, leading the development of nuclear energy technology and becoming the world's largest nuclear energy country. We are not talking about learning mechanically to develop nuclear energy, and fighting the oil crisis is not just about nuclear energy. Various petroleum alternative energy sources, especially renewable energy sources, are powerful weapons. Therefore, while striving to use as much oil as possible through various channels, including strengthening production and imports, do not relax the development of alternative energy sources. Only by making sufficient mental preparations for the outbreak of the oil crisis can we be in the active position. We would rather allocate more funds to purchase high-priced oil and develop alternative energy sources as soon as possible. This is the scientific development path. This is more beneficial to the situation where China’s energy structure is less dependent on oil.