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Last Updated: Tuesday, 5 September 2006, 10:19 GMT 11:19 UK
Has oil production finally peaked?
Pumping oil in the US
Are we ready for Peak Oil?

With the demand for energy around the world ever increasing, are we edging closer to "peak oil" - and what can be done about it?

Stephen Leeb, founder of Leeb Capital Management Group and a long-time analyst on Wall Street, thinks so.

"We have a president that says we're addicted to oil, but doesn't say that we don't have enough oil to satisfy our addiction," he says. "He really hasn't alerted us to the fact that it's a true crisis."

The crisis anticipated by these so-called petro-pessimists is one in which the world returns to the dark ages. At its most gloomy, the picture is one of civil unrest, world wars, and people dying of hypothermia in winter.

But then there are the oil-optimists - who believe we are entering the golden age of oil when higher prices and new innovations will see breakthroughs in recovery and discovery of oil.

Going deeper

At the forefront of this hunt for fresh oilfields are people like the scientists at Shell's Exploration and Production Centre in Houston.

They are developing new technologies such as electromagnetic waves to peer through rock and silt for precious reserves of oil thousands of feet below the sea bed.

Geophysicist Rocky Detomo's job is quite simple: to tackle the technologically impossible.

We don't go (to deep water) because we want to - we go there because it's the last place on earth where the elephants live
Roger Anderson, Columbia University

"We're looking deeper, we're looking in deeper water, we're looking at deeper depth, we're looking in countries we have never looked before, environments that are very hard to get to," he says.

"We have to bring all the technology we can to bear to be successful."

But haven't all the "elephant fields" - the big ones, which can pump for decades - been discovered?

Mr Detomo says they are still out there. But the quality of the oil, or difficulties in extracting it, can cause problems.

"The technology of today and tomorrow can look better and better at the opportunities," he says. "So far there's no limit on finding oil. The technologies can keep up with finding it, but it gets more and more difficult."

Fresh options

His colleague, Lance Cook, is working on so-called "tubular expandables" to counter some of the problems of drilling at great depth.

Traditional wells get narrower as each the lowest sections are added through the existing well in a telescoping effect. His team has developed what they call a "secret formula" to create a metal which expands once it is in place.

The idea is that this kind of drilling could enable much more oil to be retrieved from depths of 8-10,000 feet - "like microsurgery", he says.

Another option, one being trialled in the Na Kika project in the Gulf of Mexico, links a number of small fields together, each of which - because they are too deep, too far offshore or too dispersed - would not be viable individually.

Oil rig in the Gulf of Mexico
The search for oil is going ever deeper

And then there are submarines.

Roger Anderson, of Columbia University in New York, is working on fitting drills equipped with seismic imaging to submersibles, which could drill miles underground with gyroscopes to orientate themselves towards "the jackpot".

Oil would not need to be brought to the surface - but would be taken straight to shore through pipes across the sea bed.

"The reason we're in ultra-deep water is that that's the last frontier," says Mr Anderson.

"We don't go there because we want to. We go there because it's the last place on earth where the elephants live."


Given all the potential advances, petroleum geologist William Fisher from the University of Texas believes we have a long time to go before any kind of peak emerges.

"Peak oil's been predicted a number of times over the years, and it continually moves forward," he says.

"Even people on the lower end of it increase their estimates over time, because technology and know-how improves. My own sense is that we won't find a peak, and that there will probably be a demand peak that will probably come in 25 or 30 years."

This idea that technology is some miracle worker just isn't the truth
Matt Simmons, Simmons & Company

But even if oil optimists like Fisher are right, the timescale for finding alternative energy sources satisfy global energy demands is still tight.

No room for miracles

And some people believe the pressures are more immediate.

Robert Skinner, former head of Oxford's Centre for Energy Studies, says we need to be more frugal both in how we use oil - and how we extract it.

Even improving the recovery rate from existing wells by 5% would produce a lot of extra oil, he points out.

"The petroleum can last a long time," he says.

"But not if the future resembles the past - no way. We will run out of oil, no question¿ if we run out of ideas."

And Matt Simmons - whose firm, Simmons & Company, is the only independent investment bank specialising in energy - warns that there simply is no panacea for the prospect of peak oil.

"This idea that technology is some miracle worker just isn't the truth," he says.

"There's always the chance for a miracle, but when you're talking about going down 17-18,000 vertical feet, and going out 5 miles, being in temperatures of 350 degrees, this stuff takes a long, long, long time to develop.

"And by then we've run out the clock."

Driven by Oil will broadcast on Radio 4 on Mondays, at 0900 BST and 2130BST, from 4 September 2006 onward.

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