It's About Forty Years Until the Oil Runs Out
Speakers at a Stanford GSB conference on environmental sustainability stressed the need for innovation in renewable energy.
— If the world had to rely on the United States for all of its oil, the supply wouldn’t last very long — one year to be exact. According to calculations by Gilbert Masters, Stanford Professor of Civil and Environmental Engineering, Emeritus, current oil supplies in all nations combined would last the world for only about 41 years. Masters painted the sobering picture of the world’s looming energy dilemma during a January conference on environmental sustainability. He was one of more than a dozen speakers urging attendees to “Reduce Your Ecological Footprint,” during a three-day conference jointly sponsored by the Stanford GSB Alumni Association and the University’s Woods Institute for the Environment. Other topics covered included an analysis of Wal-Mart’s efforts to offer more environment-friendly consumer products and the explosion of interest on the part of venture capital firms in investing in sustainable companies.
Canada’s supply of oil could serve as the world’s only supply for six-and-a-half years. Central and South America combined would have about three years’ worth. Africa contains only a 2.7-year global oil supply, while Europe and Asia combined have 3.3 years total. Half of the world’s oil reserves — enough to last 23 years — are found in the Middle East nations of Saudi Arabia, Kuwait, Iran, Iraq, and the United Arab Emirates. With new oil sources not guaranteed, Masters said, more companies are showing interest in renewable energy, including solar and wind power, and electric-powered vehicles.
He cited a Morgan Stanley report from October 2007 saying that the market for environment-friendly products and technologies will reach $1 trillion by 2030.
The potential of power that uses fewer resources has also caught the attention of the business world. Venture capital investments in “greentech” businesses have risen to $2.4 billion in 2006, up from only $0.9 billion in 2005, Masters said. VC investments in solar power alone reached $1.2 billion by the end of the third quarter of 2007.
The United States leads the world in oil consumption, with about half of all the oil use powering personal vehicles. Car companies have been pushed to develop cars that get better mileage or use alternative fuels because of legislation including a mandatory increase in corporate average fuel efficiency (CAFE) standards. As part of a broader energy bill approved in December, the U.S. Congress passed increased CAFE standards that require passenger cars and light trucks sold in the United States to get 35 miles per gallon, the first increase in average fleet fuel economy in 32 years.
Masters is bullish on the development and wider adoption of electric-powered vehicles. Unlike oil, which is increasingly expensive and scarce, “Electricity is an inexpensive fuel,” said Masters who advocates generating electricity for cars from sunlight using photovoltaic technology. While a typical car using conventional fuel “costs you 14 cents a mile just to buy the gasoline, if you had a hybrid, it would cost you half that, about 7 cents a mile,” said Masters. Purchasing electricity during off-peak hours would cost about 1.5 cents a mile. Factor in a “smart garage” generating photovoltaic technology with roof tiles and consumers would have enough power “to drive one of these plug-in hybrids and all-electric cars about 12,000 miles a year,” Masters said. Photovoltaic technology also has implications for American homes and offices. About 40 percent of all photovoltaics are being purchased and installed in Germany, Masters said, and the industry has generated about 40,000 jobs. All kilowatt hours produced by residents’ homes must first be sold to the utility company. By contrast, in the United States, homeowners who generate photovoltaic power only sell leftover power, he added.
For media inquiries, visit the Newsroom.