Faced with the impending terminal decline of cheap oil, which is forecast to happen within the next 20 years, oil-producing industries are exploring new extraction methods, going to extraordinary lengths to stand a change of keeping up with demand. Eighty-five million barrels. That is how much oil we consume around the world every day. It is a staggering amount - enough to fill more than 5,400 Olympic swimming pools - and demand is expected to keep rising, despite the impending supply crunch. The International Energy Agency (IEA) forecasts that by 2030 consumption will rise to about 105 million barrels per day with a commensurate increase in production, although whistle-blowers recently told The Guardian newspaper in London that insiders at the IEA believe the agency vastly overestimates our chances of plugging that gap. The agency officially denies this.
Wherever the truth lies, it is widely expected that by 2030 we will have passed the peak of conventional oil production - the moment that output from conventional oil reserves goes into terminal decline. Some governments and corporations are waking up to the idea and beginning to develop alternatives to keep the world's transport systems moving when cheap oil runs out. But none of these is likely to make up the global shortfall in time. The pressure is on to keep the black stuff flowing and so the next two decades will see an unprecedented effort to exploit increasingly exotic and unconventional sources of oil. They include tar sands - a mixture of sand or clay and a viscous, sticky petroleum deposit called bitumen - oil shale (a sedimentary rock containing kerogen, a precursor to petroleum) and synthetic liquid fuels made from coal or gas.
Purely in terms of geological abundance, these sources look more than sufficient to meet global demand. According to the IEA, taken together, they raise the remaining global oil resource to about nine trillion barrels - almost nine times the amount of oil humanity has consumed to date. The trouble is that the name "non-conventional oil" hides several dirty little secrets and a whole host of huge challenges. Non-conventional oils need large amounts of energy, water and money to coax them from the ground and turn them into anything useful, like diesel or jet fuel.
As a result, non-conventional oil production to date has been slow to expand, with current output of just 1.5 million barrels per day. Not only that, because they take so much energy to produce, they are responsible for higher carbon emissions per barrel than conventional oil. But, slowly, things are beginning to change. Growing awareness of the impending oil shortage and its ramifications - Deutsche Bank predicts a barrel price of $175 by 2016, for example - has driven a surge of investment in new technologies to recover non-conventional oil more effectively. "Canada could eclipse Saudi Arabia," says Julie Chan, the vice president of finance at E-T Energy, a Canadian company developing a new technique to extract oil from tar sands.
The most famous of the non-conventional resources are the Canadian tar sands, where proven reserves are second only in size to Saudi Arabia's conventional crude. Today, production stands at 1.2 million barrels per day. Tar sands containing bitumen are extracted from huge mines and processed to produce oil. But mining and processing the raw bitumen is expensive and requires huge volumes of water. In Canada, the industry is already reaching the legal limits of what can be drawn from the Athabasca River in winter. Worse, mining is possible only for deposits less than about 75 metres deep, and that is just 20 per cent of the total resource. So a whole range of new technologies is now being explored to extract the deeper bitumen.
Steam-assisted gravity drainage (SAGD) is one of the most established processes, accounting for almost half of tar sands production. Steam is injected into a well to melt the bitumen, which drains into a secondary shaft from where it is pumped out. Nexen, a Canadian oil company, has developed a new twist on SAGD by dispensing with natural gas as fuel and using some of the bitumen to generate the energy needed to produce the steam. And a method called "toe to heel air injection" takes a similar approach to SAGD, but does its burning underground.
A third approach sounds a little more "out there", but in theory has the potential to be the least polluting of all the new bitumen-extraction techniques. Instead of heating the bitumen in a conventional fashion, the idea is to zap it with electricity, using a technique called electrothermal dynamic stripping process (ET-DSP). The electrical resistance of the Earth generates heat, which liquefies the bitumen and allows it to flow into a central production well.
IHS CERA, an oil consultancy that recently produced a report on the growth prospects for tar sands production, estimates it will take between five and 15 years to commercialise the new technology. So what of the other alternatives? Oil shale is the next large unconventional resource under consideration, with about 2.5 trillion barrels of "oil equivalent" identified. It was used to produce oil before the oil industry took off in the late 19th century. To produce oil from it, you essentially need to speed up a geological process that takes millions of years. This is done by heating the rock to 500°C until the kerogen decomposes into a synthetic crude oil and a solid residue.
Three-quarters of the global shale resource lies in Colorado, Utah and Wyoming, and the US president Barack Obama's administration has recently restarted the process of leasing federal land for shale oil research and development. A number of technologies are being developed to heat the shale underground. These utilise microwaves, high-temperature gas injection, and radio waves combined with supercritical CO2. Such heating creates an oil reservoir that can then be extracted using conventional drilling.
So with huge reserves and up-and-coming technologies, what are the prospects for unconventional sources? Most analysts agree on one thing: despite the enormous size of the non-conventional resource, it will be decades before the new technologies can have a significant impact. In the meantime, any attempt to increase output quickly will have major regulatory and financial hurdles to overcome. In the US, federal bodies are effectively banned from buying non-conventional fuels because of their high CO2 emissions.
The IEA's chief economist Fatih Birol says non-conventionals can defer global peak oil to "around 2030". Others are not convinced. "If everything goes well," says Steven Sorrel, of the UK Energy Research Centre, "oil sands might produce six million barrels per day in 20 years' time, but by then we'll need to add at least 10 times that much capacity - without allowing for any growth in demand. It's very hard to see non-conventionals riding to the rescue."