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An interview with David Goodstein

David Schneider

David Goodstein, vice provost and Frank J. Gilloon Distinguished Teaching and Service Professor in the physics department at the California Institute of Technology, recently published his sixth book, titled Out of Gas. In it he points out that the 21st century will mark, quite literally, a turning point for civilization: In the not-too-distant future, the production of fossil fuel—oil, natural gas, coal—will stop increasing and begin declining, forcing society to exploit other sources of energy. Out of Gas provides a brief overview of this enormous problem and notes some possible solutions.

Assistant managing editor David Schneider asked Goodstein to elaborate on some of the issues he surveys in this book.

David GoodsteinClick to Enlarge Image

Why did you decide to write a primer on energy and energy policy?

This is the most important problem of our time. I asked myself (a physicist whose research serves no useful purpose) what I could do about it. The answer was, I could write a book.

To whom have you targeted this book?

It's for the educated nonscientist (although scientists seem to like it too). 

The clear message of the book is that this is the century in which humanity must learn to live without fossil fuels. One of the several alternatives you discuss is nuclear energy, which you point out has various pluses and minuses. Weighing everything, do you think it's time to put aside concerns about the environment or terrorist threats and begin building more nuclear power stations (as James Lovelock recently urged)?

Definitely yes. But we should remember that nuclear fission energy is not a magic bullet that will solve the problem. The largest practical nuclear plant is roughly 1 gigawatt. It would take an almost unimaginable 10,000 of those to replace the 10 terawatts of fossil fuel we consume worldwide today. And then the known reserves of uranium would only last a decade or two at that burn rate.

Do you think there are reasonable prospects for fusion power? Is enough money being spent on fusion research? Is it well directed? In particular, what do you think of the argument that Robert Hirsch has made against investing everything in huge tokamaks, which he believes will never be economically attractive even if they can be made to work?

Fusion is the best hope for the long-term future. Tokamaks are not the only possibility. People are working on spheromaks, inertial confinement schemes and colliding beams as well. I can't judge whether the money is being spent wisely, but this is the only energy technology that really big bucks have been spent on.

In discussing the problem of the carbon dioxide released from fossil fuels, you dismiss geological sequestration as a workable remedy. Why are you gloomy about this tactic?

You have to put away a few ten-thousandths of the entire atmosphere of the planet to make a difference. That's an awful lot of gas to put somewhere and keep it there.

Do not some reasonable minds differ on your central point about rapidly running out of fossil fuel? For example, don't some believe that exploitation of unconventional sources of fossil fuel (say, Venezuela's heavy oil or Canada's oil sands) will delay the turn-down in production for a few decades yet?

I'll answer by offering an excerpt from a postscript I’ve drafted for the paperback edition (due out from W. W. Norton next February):

Some experts doubt there will be an oil crisis in the near future. They have been dubbed the "antidepletionists." In my experience they are intelligent, well-informed people, and most of them are employed by the oil industry. That doesn't automatically make them wrong. After all, people who work in the oil industry are the ones most likely to be interested and knowledgeable about it. We should keep in mind, though, that the oil industry has a very strong incentive to deny that there is any looming shortage of oil. The reason is to keep down the price of oil properties they would like to acquire.

As we have seen, the worldwide "proven reserves" of oil now stand at just over 1 trillion barrels, and the R/P (reserves-to-production) ratio is about 40 years. Nothing alarming about that, say the antidepletionists; the R/P ratio hovered around 40 years through most of the 20th century. That is true, but to understand what the ratio really means we have to reexamine the term "proven reserves." To most of us, "proven reserves" would consist of all the oil that's been discovered minus all the oil that's already been extracted. But that is not how the oil industry uses the term. Oil companies and petroleum-producing nations alike report as "proven reserves" only a portion of what they believe themselves to have in reserve. When a new field is discovered, geologists use various techniques to measure its length and width, its depth and the porosity of the rock and so on, finally coming up with an estimate of how much oil the field might contain. That estimate gets turned over to officials of the company or country, who can report as "proven" whatever fits their current needs, saving the rest for a rainy day. That leeway is what permits "proven reserves" to go on growing and the R/P ratio to remain essentially constant no matter what is happening in real oil fields.

What is actually going on in real oil fields is sobering. Worldwide, the rate of discovery peaked around 1960 and has been declining ever since. Meanwhile, the worldwide rate of consumption of oil has continued to grow, and first exceeded the rate of new discovery around 1980. The gap between the two has grown steadily during the last 25 years. That should mean that proven reserves have declined by some 150 billion of barrels over that period. Instead, the reserves have steadily increased. Why? Because companies and countries continue to pull out new reserves that they’ve kept up their sleeves. In fact, in the late 1980s the proven reserves of OPEC nations jumped by nearly 400 billion barrels without the benefit of any new discoveries. To reach that new height OPEC merely changed its quota rules for how much oil each member nation was permitted to pump, based in part on their reported proven reserves, and the new proven reserves magically appeared.

Add the growing gap between rate of discovery and rate of consumption to the giant jump in OPEC reserves and we see that something like 500 billion barrels of oil have been brought out of the shadows by these methods and added to worldwide proven reserves over the past 25 years—an amount equal to roughly half of all existing reserves. Obviously this game can't go on much longer. Either the industry will run out of hidden reserves or they will simply start lying—reporting reserves that don't exist at all. That may have already started to happen. The once-proud Royal Dutch Shell Group recently made headlines when it was forced by outside auditors to reduce its claims of proven reserves, and correspondingly the value of its stock shares.

Antidepletionists are fond of saying that discovery has been declining since 1960 because so much oil had already been found that no more was needed; thus exploration dwindled to a standstill. That is most certainly not the case. For example, 1999 and 2000 were spectacular years for oil discovery, driven by giant findings at Azadegan in Iran and the Kashagan East field in the North Caspian Sea. But even in those years, new discovery fell far short of consumption. In truth the world is consuming oil at such a breathtaking rate—more than 25 billion barrels per year and rising rapidly—that no discoveries, past, present or future, are going to keep up with demand. And remember, the people of China are just beginning to drive.

Economists believe that the demand for anything can never exceed its supply. The mechanism of price assures that the supply will show up when it's needed. Of course, that has pretty much never been true of the oil industry, which has nearly always been governed by cartels, first the Texas Railroad Commission, then OPEC. When world oil production peaks, OPEC will lose control, and the price mechanism will kick in with a vengeance, making it economically feasible for other sources of fuel to replace the missing oil. In a sense, that has already happened in the case of Canadian oil sands, which are now being mined at a profit. But the product that comes out of the ore is not rich enough to make gasoline, so hydrogen must be added. As a result, some of the world's largest plants for extracting hydrogen from natural gas have been built in Alberta. In other words, oil from oil sands is not only more costly in money than conventional oil, it is also more costly in energy. That will be increasingly true as other hydrocarbon resources are exploited.

Doesn't the experience of the 1979 oil shock give you at least a glimmer of hope that demand for oil will slacken considerably as the price rises? That is, isn't it at least conceivable that the peak in global oil production could pass without huge disruptions to society?

I thought the oil shocks of 1973 and 1979 were huge disruptions, whose damages were limited only because they were artificial and short-lived. A real worldwide peak will have consequences that are completely unpredictable, but what happened in '73 and '79 doesn't make me optimistic.

In the book, you give away that you drive a hybrid—in what other ways are you thinking globally and acting locally?

I've always lived where I could walk to work. But I have to be honest: my other car is a Lexus. I bought the hybrid as soon as they came out, not so much to conserve fuel as because I had been telling my students at Caltech for decades that hybrids were the only sensible way to make cars.

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