The recent trends in the development of energy efficient technologies has posed a big question to the future of the cash rich oil industry. The declining prices of oil barrels across the world has forced over half a million people to lose their jobs. The biggest consumers of oil over the past few decades, United States, and China, have massively cut down their consumptions recently. Let us have a quick look at some of the lesser known historical facts about the oil industry which led to the present scenario.
Around 1960s, the environmentalists started to quantify the oil reserves using the R/P ratio. This ratio gives an estimate of how long the oil reserves would last. The R/P ratio over the world was calculated to be around 40 years. This implied that all the oil would deplete within 40 years, hence technology must rely on alternative sources from the 2000 era. Incredibly, this ratio has remained almost constant since 1960s!! Even today we predict the oil reserves to last for another 40 years. This apparent contradiction is because engineers and geologists have been discovering new oil fields and advanced technologies for deep drilling.
As technology advanced more and more, oil production increased over the years along with a massive increase in consumption in countries like United States, China and India. But the turn of the century observed an increased political tension between Iran and United States which led the latter investing more in the production of shale oil reserves and cutting down imports from the middle-east. The development of better energy-efficient technologies has also resulted in a decreased demand of oil over the world leading to a substantial fall in oil prices.
The big question is how long are the oil reserves going to last and how useful is it for the future. If we look at the trends of R/P ratio, the advancing technology would find improved techniques for exploration and oil productions are most likely going to sustain for more than half a century. Although there have been huge investments for renewable sources of energy, a large-scale implementation is seemingly impossible considering the latest trends in research. For example, it is predicted that almost 90% of the worldwide automobile industry (one of the biggest consumers of oil industry) would still rely on fuels to power their engines several decades from now. Amidst all the floating myths of the decline of oil industry, it will find articulate ways to sustain itself through the barriers of time.