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" EXPANDING SUPPLY These days everyone is worried about oil. The primitive black goo has been linked to climate change, economic disruption and other problems, but make no mistake: We still need oil, and lots of it. Not only is American demand rising--this year it&amp;#039;s expected to top 21 million barrels per day--but ascendant economies in India and China have developed huge appetites for the stuff. The stark reality is that the supply is finite. &amp;quot;Peak oil&amp;quot; theorists argue that production is already maxed out, meaning imminent shortages and sharper price spikes; more optimistic experts believe that day is 20 to 30 years away. Both camps agree that the task ahead is twofold: Develop new supplies while learning to stretch existing reserves. The Relentless Search There has not been a major find on U.S. soil since Prudhoe Bay in 1968, which means most major exploration has moved to the deep waters of the Gulf of Mexico, where drilling and production are difficult and expensive. Last year, a Chevron-led consortium announced the discovery of the Jack field, 270 miles off Louisiana. It may hold 15 billion barrels, which would more than double domestic reserves. &amp;quot;The technology that is being brought to bear is phenomenal,&amp;quot; says energy writer Robert Bryce, author of Gusher of Lies. &amp;quot;What we are seeing today in offshore drilling is the terrestrial version of the space program.&amp;quot; Bryce is among those pushing to open offshore leases along the East and West coasts currently under federal moratorium but estimated to hold as much as 19 billion barrels of oil and 86 trillion cu. ft. of natural gas. Tapping vast unconventional sources that don&amp;#039;t flow to the surface is also hugely challenging. The oil sands of Alberta, Canada, contain 175 billion barrels of proven reserves--the largest in the world outside Saudi Arabia--but the oil costs as much as $15 per barrel to produce, compared to $2 for Saudi crude. Likewise, shale deposits in Colorado, Utah and Wyoming hold promise, but no one has yet figured out how to extract them at a profit. Royal Dutch Shell has placed a $200 million bet that it can unlock Colorado&amp;#039;s Green River Formation, which could produce 4 million barrels per day--20 percent of current U.S. consumption.  Priming the Pump  (Photograph by Martin Dubois) Pumping oil is surprisingly inefficient: For decades, companies relied on ground pressure and crude secondary well-flooding methods that recovered just one-third of a field&amp;#039;s reserves. Now, through enhanced oil recovery techniques, companies can collect up to three-quarters, dramatically lengtheninga field&amp;#039;s useful life. -- D.C.    CO2 Injecting carbon dioxide into the ground increases reservoir pressure and the fluidity of heavy, gummy oil, enabling it to escape rock pores and flow toward wells. It takes about 8000 cu. ft. of CO2 to get an extra barrel of oil.   STEAM Injected steam reduces oil&amp;#039;s viscosity, which increases flow rates. Shell claims that in the past decade steam injection has enabled it to produce more than a billion additional barrels of oil from a California field discovered in 1911.   CHEMICAL Surfactants can form a soapy film in the well, lubricating oil so it flows to well bores. A quarter of the oil from China&amp;#039;s massive Daqing field, which produces more than 1 million barrels per day, is recovered by this means.   MICROBES When introduced into an oil reservoir, microbes plug small channels in the rock, forcing oil through larger pores. They also generate surfactants and carbon dioxide. One Texas field boosted production by 43 percent--but it took two years.   ULTRASOUND In a recent development, the Pacific Northwest National Laboratory in Richland, Wash., has conducted lab tests on a device that is mounted on well-bore pipes, where it uses ultrasound to heat flowing oil, rendering it less viscous.   CONTINUED: Extending Supply &amp;amp;gt;&amp;amp;gt;&amp;amp;gt;  EXTENDING SUPPLY Moving Target  Since the oil age began in 1859, the world&amp;#039;s producers have pumped approximately 1 trillion barrels from the earth. At current rates of production, they could pump the second trillion by 2030. A hotly debated question: When will our global exploitation of this nonrenewable resource reach the pinnacle of production, known as peak oil? The most pessimistic pundits, such as Kenneth Deffeyes, professor emeritus of geosciences at Princeton University, speculate that we&amp;#039;ve already peaked, with social and political upheavals soon to follow. &amp;quot;By 2025,&amp;quot; he has written, &amp;quot;we&amp;#039;re going to be back in the Stone Age.&amp;quot; But energy market analysts such as Michael Lynch, president of Strategic Energy &amp;amp;amp; Economic Research in Amherst, Mass., believe that pessimists overlook the law of supply and demand: As cheap supplies dwindle, prices start to rise. Higher prices reduce demand by forcing consumers to use less. They also spur efforts to develop previously uneconomical energy sources. These market forces, optimists say, mean oil won&amp;#039;t peak for at least another 20 years and that our economy will have time to adjust. This graph reflects a centrist position. Based on data compiled by the International Energy Agency, a consortium of experts from 27 countries, it projects continued increases in the production of both natural gas and oil. -- D.C. Moving Beyond Fossil Fuels Our total energy needs are dictated not only by supply, but also by demand. Every barrel of oil saved through conservation or the use of alternative sources is just as valuable as a barrel pulled from the earth. Pioneering conservationist Amory Lovins coined the term &amp;quot;negabarrels&amp;quot; to refer to the savings that can be reaped by making buildings and vehicles more efficient. Corn ethanol is likely not a long-term solution: If all the corn in the U.S. were converted to ethanol, it would provide only 6 percent of the nation&amp;#039;s energy needs. Cellulosic ethanol, though, can be produced from virtually any carbon-based stock, including wood and solid waste. At the recent Detroit auto show, General Motors announced a joint venture with cellulosic-ethanol startup Coskata. In December, Silicon Valley startup Nanosolar introduced solar panels that can produce electricity for around $1 per watt--less than the cost of power from coal-fired plants. Then there are two old standbys: nuclear power and natural gas. Nuclear power is a cost-efficient and nearly carbon-free energy source but it comes with environmental concerns that since the 1970s have handcuffed plans for any new construction. Thanks to recent incentives, the Nuclear Regulatory Commission expects to take applications for 32 new reactors by 2010. Natural gas is a clean fuel primarily produced domestically; horizontal drilling is tapping hard-to-reach but vast deposits like the Barnett Shale surrounding Fort Worth, Texas. These new supplies could spur utilities to rely more on gas to generate electricity. By 2017, though, oil and gas are still expected to make up 60 percent of the American energy portfolio, says Bob Fryklund of the Houston consulting firm IHS. In the end, the real question shouldn&amp;#039;t be how long will the oil last, but how long will the energy last? With more efficient vehicles, alt fuels and cleaner electric power all coming on line over the next few years, oil may well become a smaller part of the total energy pie. In fact, some analysts predict that today&amp;#039;s high prices will spur so much progress in conservation and alternative sources (not to mention new oil exploration) that oil prices could actually fall dramatically. That sounds like a problem most people could live with. Oil Alternatives  Breaking our fossil fuel dependency will require plugging into the grid instead of pulling up to the pump. Passenger vehicles chug 40 percent of the oil Americans use, but change may be coming: Chevy promises the Volt in 2010, and numerous plug-in concept cars--like the electric Aptera--debuted this year. Meanwhile, inexpensive electricity could also eliminate oil-based heating--and nearly half of the natural gas consumption in electrical production and residential heating. Here are the pros and cons of some leading energy options. -- D.C. Wind Energy   +  Wind farms will generate more than 1 percent of U.S. electricity this year. The only reason projections aren&amp;#039;t higher? The industry grew 45 percent last year and now it&amp;#039;s running out of turbines. The American Wind Energy Association speculates that this barely tapped resource could provide 20 percent of U.S. power by 2020.   -  That will only happen if the money is right: Congress approved a 2-cent-per-kilowatt-hour federal tax credit for wind installations in 2005, but the credit is set to expire at the end of this year. In 2004, the last time the subsidy lapsed, construction of new installations fell 77 percent.   Solar Energy   +  The U.S. solar industry grew nearly 60 percent last year--but still ranks below the wind sector. Google and Wal-Mart made headlines with workplace installations, and residential use continues to grow. The industry hopes solar can supply 200 gigawatt-hours per year by 2030--enough to power 20,000 households.   -  Money remains the issue here, too. It can cost $25,000 to retrofit a home with a basic 3-kilowatt solar system, and while prices for panels have dropped in the past 30 years, they&amp;#039;ll have to keep coming down to meet those industry goals.   Ethanol Production   +  This biofuel may become a crucial bridge to electric cars, and engineers at Coskata, a startup company in Warrenville, Ill., say they can create ethanol for less than $1 per gallon. The company hopes its first commercial plant will produce 100 million gal. of ethanol per year by 2011.   -  Coskata engineers claim that each unit of energy input generates 7.7 times as much in output, so they may have solved ethanol&amp;#039;s sluggish energy balance issue. Still, one major hurdle remains: Fewer than 1 percent of the nation&amp;#039;s gas stations are equipped to dispense ethanol.   The Case For Conservation Given the technical challenges and expense of finding new sources of petroleum, many experts think conservation and efficiency hold tremendous potential for reducing dependence on foreign energy supplies while boosting productivity and prosperity at home. Here are the most promising measures. -- D.C. Better Mileage | 1 Billion Barrels Saved Per Year     From 1975 to 2000, American cars cut their fuel use by the equivalent of 2.8 million barrels of oil per day, spurred largely by Corporate Average Fuel Economy (CAFE) laws. Then progress stalled. December&amp;#039;s energy law will raise CAFE standards to 35 mpg by 2020, but pushing them to 40 mpg would cut oil demand by 1 billion barrels per year, roughly our current imports from Saudi Arabia, Iraq and Venezuela combined.  Improved Mass Transit | 45 Million Barrels Saved Per Year     Public transportation ridership has risen 25 percent since 1995. The savings if one-third more people rode mass transit: 45 million barrels per year.  More Energy-Efficient Homes | 30 Million Barrels Saved Per Year     One recent study found that weatherizing oil-heated houses produced average savings of nearly 18 percent. If all oil-heated homes achieved this level by 2013, the National Resource Defense Council estimates it would save nearly 30 million barrels per year.  Streamlined Air Traffic | 18 Million Barrels Saved Per Year     The Federal Aviation Administration&amp;#039;s NextGen GPS-based air traffic control system is expected to reduce delays and speed takeoffs and landings. A Department of Energy study estimates those measures could save the equivalent of 18 million barrels per year by 2013.  (Illustrations by Gil Ahn)  Only 120 of the world&amp;#039;s 4000 active oil and natural gas fields satisfy a remarkable 40 percent of total global consumption. Based on data compiled by geoscientists at the University of Texas, this map pinpoints 932 giant fields\u2014those with estimated reserves of at least 500 million barrels of ultimately recoverable oil or gas equivalent. Although discoveries of these megafields peaked in the 1970s, drillers using new technologies have located 69 new giants since 1999 and anticipate finding up to 33 more before the end of the decade. Below are the biggest hits of the past eight years, including major discoveries within our own borders that could help reduce imports of foreign oil. \u2014 Davin Coburn "^^<http://www.w3.org/2001/XMLSchema#string>
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