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Before the oil runs out: How will this era end?

The world is swimming in crude, but it's getting costlier to extract, and demand is rising fast. Is it the end of the line for cheap oil? An overview. Part 1 of three

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The warnings keep piling up. Author Paul Roberts cautions his readers about "The End of Oil." National Geographic's cover story last month examined how the world might survive "After Oil." The Economist magazine asks, "Is the age of oil drawing to a close?"

With the discomfort growing, consumers are considering fuel-efficient cars. Industry has gotten serious in its search for alternatives. New efforts are focused on wind, solar, nuclear, and even old, reliable coal (in a cleaner version) for the energy future.

But is the world really running out of oil? The short answer is no. Earth is swimming in the stuff. What's changed is that the era of cheap oil - a period that has lasted 150 years - is showing its age. Only a dramatic breakthrough - either in technology or consumption patterns - can forestall its conclusion in a decade or two.

If it happens, the end of cheap oil would have a profound effect: stunting world economic growth, constraining China's rise, and challenging Western lifestyles. America's joy ride, in particular, could come to a screeching halt.

"The US has 2 percent of the world's proven oil reserves. But it burns 25 percent of the world's transportation fuels," says an analyst close to the oil industry who asked not to be named. "This isn't going to work out in the long run."

The problem isn't readily apparent from a supply viewpoint. When the world's first oil well was sunk in Pennsylvania in 1859, the Earth contained at least 6 trillion barrels of crude oil, geologists estimate. So far, we have used only about 1 trillion barrels.

So what's all the fuss about?

Part of the worry has to do with access. Of the original 6 trillion to 8 trillion barrels in the ground, the industry is capable of extracting only about half - 3 trillion to 4 trillion barrels. Lots of oil is locked in difficult underground formations that are hard, if not impossible, to exploit using current technology.

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