European countries have already made a switch to biofuels and are beginning to feel the effects and complications. While it hasn't resulted in direct food shortages, biodiesel is already causing shortages of vegetable oils.

Will countries like China and India follow this trend in energy conversion? It is difficult to imagine any country with enormous population would make such a move. This conversion could result in massive world food shortages as never experienced. Both countries realize this and are pursuing aggressive oil exploration.
Some American environmentalists believe that it is possible to make a complete switch from crude oil to alternatives by 2050. This is very unrealistic as crude oil provides us with more than just a form of energy. It is a raw source of chemicals for manufacturing drugs, plastics, chemicals, and fabrics.

So what is the realistic solution with the arrival of peak oil? Canada, USA, and Venezuela sit on more unconventional oil than all historical conventional crude and present reserves that are available. Peak oil does not mean an abrupt end to oil. It does mean that demand of conventional oil will exceed supplies of conventional crude. This spells the end to cheap crude.

Extracting oil out of America's huge oil shale deposits is once again drawing attention. It will be successful as new technology comes on stream. With higher crude prices there will be decent returns in revenue. It will inspire more interest and new ideas. Oil companies' attention will once again be drawn to this area.

The Green River Shale Formation encompassing the States of Colorado, Utah and Wyoming was first discovered in 1924. This famous shale formation covers tens of thousands of square miles. It is found in three different ancient lake basins. The layers of sediment in this formation stretch undisturbed for many miles.

This shale is a soft sedimentary rock that readily fractures into layers, composed of minute particles of clay, which may easily be removed. It was formed from multi layers through erosion. There are 40 million layers in one part of this formation. Deposits within these layers are fossilized plant, animal life and algae, which has turned over millions of years into kerogen. Some claims have been made that this was formed from the Great Flood of Biblical times. Geologists say that this formation was formed through countless floods perhaps through 500 to 700 millions of years.

There are two conventional approaches to oil shale processing. In one, the shale is fractured and heated to obtain gases and liquids by wells. The second is by mining, transporting, and heating the shale to about 450oC, adding hydrogen to the resulting product, and disposing of and stabilizing the waste. Both processes use considerable water. The total energy and water requirements together with environmental and monetary costs have so far made production uneconomic. During the oil crisis of the 1970's, major oil companies spent several billion dollars in various unsuccessful attempts to commercially extract shale oil.

Clearly this was the biggest positive news to hit the American business world. Potential of this oil discovery could jolt the American economy and possibly lift a financial burden due to costly oil imports. Commodity markets reacted quickly. There was an immediate ripple effect on global oil prices.

Hoopla came to a quick end when knowledgeable oil people scrutinized this new oil find. First and foremost, a successful test well does not prove how much oil is actually in the ground. Determining an in-place reserve takes a highly skilled team of petroleum geologists more than just several months to calculate.

When drawing oil from extreme depths under the ocean bottom, problems arise from high pressures. Oil being pumped to the surface is very hot. It must be cooled before it is pumped onto a tanker vessel. Along with the hot pressurized crude there is a mix of natural gas. This must be separated and somehow stored, or shipped two hundred miles to the mainland. This is not an easy feat as natural gas is lightweight, bulky and not easy to compress.

Environmentalists immediately expressed their major concern. Jack Field is located in the midst of a direct path of category 3 and 4 hurricanes. The closest inland shore is 200 miles away. If a serious hurricane strikes it could be a multi-million dollar disaster

Financial analysts looked at the very high costs of developing this field. What will the production costs end up at? No one can be certain that this new oil find will be a profitable success even at current high crude prices.

In the late 1700s sperm whale oil was popular for lamp oils and candles because it burned with less odor and smoke than most fuels. However, sperm oil was very expensive. A gallon in the early 1800s cost about $2.00, which in modern values equates slightly over $200 a gallon.

The demand for whale oil took a tremendous toll on whales, and some species were driven to the very brink of extinction. In the Early 1800s whales were killed at a rate of about 15,000 per year. Sources estimated that there were 50,000 of various species of whales remaining in 1850.

Invention of the kerosene lamp had an immediate impact on the whale industry. Kerosene was easy to produce, cheap, smelled better than animal-based fuels when burned, and did not spoil on the shelf as whale oil did. Most people could afford kerosene; it sold for less than 7 cents a gallon.

Chevron Corp. and partners Devon Energy Corp. and Statoil ASA have initiated this new technology to explore further into the Gulf of Mexico. Located 270 miles southwest of New Orleans, is the region of exploration by the Consortium, named Jack Field. It is a 300-mile-wide swath of the Gulf that lies below miles of water and deep within a bed of ancient rocks.

Using newly designed floating oil rig platforms, which can withstand the regores of Gulf storms and drill deeper than their predecessors, they have met success. On September 6, 2006 the Consortium announced that they might have discovered America's biggest source of oil since the discovery of Alaska's North Slope more than a generation ago.

Below 7,000 feet of water the drill bit went through a total of 28,175 feet, or a distance of 6.6 miles from surface of the drilling platform. The Consortium stated that the well sustained a flow rate of more than 6,000 barrels of crude oil a day during the production test.

In 1924, the discovery of an oil field beneath the Nash salt dome in Brazoria County, Texas, was the first to be based on single-fold seismic data. Before that, oilfield exploration was very much a guessing game based on surface signs. Stakes were high, and rewards could be tremendous, but losses from dry holes could be devastating. Then, engineers and geoscientists discovered that they could use low-frequency sound waves to map subsurface geologic structures and locate possible hydrocarbon traps.

Today, 3D-seismic technology is applied to solve problems and reduce uncertainties across the entire range of exploration, development, and production operations. Surveys are used to characterize and model reservoirs, to plan and execute enhanced-oil-recovery strategies, and to monitor fluid movement in reservoirs as they are developed and produced. These capabilities have been made possible by advancements in data acquisition, processing, and interpretation that have both improved accuracy and reduced turnaround time.

Oil wells drilled in the Southern United States have an initial recovery rate of 20 percent. Enhanced recovery techniques such as water flooding and carbon dioxide flooding are then employed to extract an additional 40 percent of the oil. The remaining 40 percent of the resource is still untapped. This may seem insignificant until one looks at actual number of barrels of crude.

American researchers in Mississippi hope to tap into the 40 percent of which remains in most petroleum reservoirs after use of standard production techniques. What is really interesting about their research is the method to be used. It is environmentally friendly and initial costs seem to be very affordable.

Indigenous bacteria are injected into the oil-bearing formation. The particular bacterium flourishes in this environment and eventually changes the pathway of water injection. This forces oil into new channels and accumulations of oil. Coupled with carbon dioxide flooding this will result in much greater recovery of oil than either previous technology alone.