Over the recent past, concerns have been raised over the alleged depletion of naturally available resources. Economists, as well as geologists, have predicted that there is a high risk of loss of resources such as oil in the near future due to a number of factors. One of these contributing factors is the ever increasing world population. As the number of people keeps rising, the resources keep getting more and more used. Moreover, the number of corporate organizations increases by the day and this, as proprietors of the ‘we are running out of resources’ movement state, will lead to an increased overdependence on the resources. This aspect is said to be duly substantiated and made worse by the aspect of competition which is a very common occurrence in modern day business operations.
Despite these claims being rampant and widely discussed over the past three decades, recent developments have stated that the world’s resources are nowhere close to running out. The thought of the resources being depleted has actually been said to be highly exaggerated, a factor that has seen it be described as a myth. However, this claim seems to be used as a way not to limit the extraction of oil, which might be the proposed solution to avoid depletion. Oil, which is one of the world’s primary resources has largely been linked with running out. This paper provides some very significant insights on why the world is running out of oil resources and why there is need to embrace the future for better alternatives.
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Literature Review
First and foremost, it should be noted that oil is a resource which is naturally finite (Miller & Sorrell, 2014). This statement suggests that at some point and time, the oil found in the earth’s crust will be exhausted. In essence, stating that oil will be exhausted over time implies that a measure of the quantity of oil present in the earth’s crust today has been measured and compared to the amount of usage in the world today. As of 2013, it was reported that oil barrels had measured up to 1687.9 billion barrels. This was an increase from the previously reported 1,342 billion barrels in the year 2009 (Udochukwu & Ogbonnaya, 2011). Statisticians and experts in the oil industry said that with the current usage of oil annually, this amount of oil was only sufficient enough for a period of not more than 53.3 years.
A case study was conducted in Nigeria, which is one of the biggest oil producers in the world (11th positioned) and the number one producer in Africa to determine if it was true that oil was getting depleted. As of January 2007, Nigeria was recounted to have had a total oil production of 36.2 billion barrels in oil reserves. On a daily basis, Nigeria has a production capacity of three million barrels each day when all oil that hat has been cut-ins is brought back online (Udochukwu & Ogbonnaya, 2011). Of the three million barrels, two million are obtained onshore, and the other one is obtained offshore. Nonetheless, Nigeria is the eighth largest exporter of crude oil in the world (Udochukwu & Ogbonnaya, 2011). In the year 2006, the nation was recorded to be exporting close to 2.15 million barrels of oil in a day. With its primary importer being the United States of America, they have been able to develop their production further. Other importing companies of Nigerian oil include Europe, which imported 19% of the oil produced in Nigeria in 2006 and South America, which imported 7.6% in the same year (Udochukwu & Ogbonnaya, 2011).
Significantly, oil is business is very vital for Nigeria, and its demise would totally cripple the country. It forms the largest number of export earning with an over 90% rating. Also, it is the country’s primary source of revenue given that it accounts for a close to 85% of the total revenues collected. For the study, Udochukwu & Ogbonnaya (2011) used the Hubbert model. They came up with a statistically appropriate amount of oil reserve amounts in the country which they used to draw their calculations. The results of this study indicated that there was a probable depletion of the oil reserves at hand.
Nonetheless, the increased dependency on oil in the manufacture of certain products like household goods is also another occurrence that predicts a possible depletion of oil (Udochukwu & Ogbonnaya, 2011). Modern food production makes use of certain petroleum products to ensure that food is preserved from spoiling. Also, the clothes that people wear today are manufactured through processes that involve the use of oil. With the increased agricultural engagements by people today, oil still keeps developing more need as it is used in farming inputs like fertilizers and pesticides. Moreover, the machinery that is used in modern day farming, that is, the tractors and trailers all use fuels derived from oil to run. Significantly, other equipment like the refrigerators that are common in most households today are developed using machines that run on oil and are transported on oil-dependent networks. In essence, almost all of what is in the household relies on oil in a way or the other (Sorrell, Speirs, Bentley, Brandt, & Miller, 2010).
As it was earlier on stated, the increasing number of people in the world is one of the major threats to resource extinction (Miller & Sorrell, 2014). The continuously increasing number of individuals and modern technological advancements are a direct implication of increased demand for oil. With time, the demand will be quite higher than the supply, and this will eventually result in the complete loss of the resource. People will own their own homes, purchase their own cars, and even run their own firms, a factor that in the long runs leads to one place—the increased use of oil-derived products. In light of firms, every day has seen the opening of new enterprises all which seek to establish themselves. Regardless of the industry, such firms always find themselves using oil either directly or indirectly. It could be office machinery that runs on particular oil products or a car that is used for transport within the organization. At the end of the day, it all ends up in increased demand for a finite resource.
Analysis
As for the case of Nigeria, a number of barrels might be increasing annually, but this is not to mean that oil production is steady. On the contrary, the world population is increasing more tremendously, a factor that implies that the demand will be quite higher than supply with time. This brings about the issue of marginal costs where there is a price for every additional unit of goods produced. In this case, the amount of oil is increasing, but this comes at a higher cost. Again, it should also be noted that there is a difference between oil that was produced like seven decades ago and oil that is extracted today. This difference primarily comes to exist as a result of the percentage of water in the oil. Previously, oil had very minute amounts of water. The percentage has, however, been increasing over the years, which is a very imperative indicator of changes in the level of oil production. So, are we running out of resources? The most appropriate answer for this query would be ‘yes, we are’ as it is evidentially proven from the case of Nigeria that oil levels are going down by the day.
There might be a lot of room to debate the issue for economists and geologists but one factor remains to be true: that oil is finite. Previously given predictions on the extinction of oil might have been wrong but this does not imply that oil will never run out. The most probable experienced mistakes were in time calculation and errors that occurred as a result of failing to fully know the amount of oil that is held within the earth’s crust. Even as of today, it cannot be fully justified when oil is going to become depleted fully because of the time to time discoveries that are being made of new areas that are found to have large oil deposits. The only way that this depletion can be evaded is by reducing the dependency on oil products and finding alternatives to its use. As it has been seen, there is a lot of dependency in the world today on oil-derived products which has made the levels of its mining and extraction to intensify. Increased production and increased consumption all signify one thing altogether which is that the earth’s resources are running out as the days go by.
References
Miller, R., & Sorrell, S. (2014). The future of oil supply. Philosophical Transactions. Series A, Mathematical, Physical, and Engineering Sciences, 372 (2006), doi: 10.1098/rsta.2013.0179
Sorrell, S., Speirs, J., Bentley, R., Brandt, A., & Miller, R. (2010). Global oil depletion: a review of the evidence. Energy Policy, 38 (9), 5290-5295.
Udochukwu, B., & Ogbonnaya, I. (2011). A prediction on Nigeria’s oil depletion based on Hubbert’s model and the need for renewable energy. ISRN Renewable Energy , vol. 2011, doi: 10. 5402/2011/285649
