Oil is a finite resource, and as such it's discovery, use and decline follow fairly predictable mathematical models. M King Hubbert, first demonstrated this in the late 1950, correctly predicting the peak production of US oil in 1970. He went on to predict world peak oil also, based on peak discovery, 1963. It happens to be right about now. ( see footnote for clarification ).
Kjell Aleklett and his team at Uppsala University in Sweden, using IEA ( International Energy Assoc ) estimates of reserves, puts the year of Peak Oil at 2008. He is not alone, scientists, leading industry figures and now even the US military is warning of looming shortages by the middle of this decade.
The principle is quite straightforward and widely accepted but often misunderstood. It is not that we are "running out of oil" so much as, we are passing the point of maximal production. In other words, the amount, or volume, we can supply in any given unit of time will fall and continue to fall.
During the last few years peak output reached 84 million barrels of oil a day ( about 1000 barrels a second ). In 2007-8 as the oil priced increased to $147 / barrel, production ramined static. This is not what would be expected if market forces determined production ( even accounting for OPEC quotas ). The GFC intervened, demand eased and the oil price fell.
So what happens next?
With economic growth, particularly in India and China, demand will inevitably rise and we will again reach previous levels of consumption. Will our production, as forecast by IEAE rise past previous levels ? To 90 or even 100 mpd ? Or will we hit the same production limits and see the same pattern of oil price rises ?
One thing seems certain, in the absence of external events that affect global consumption ( like another GFC of Flu pandemic ) we will find out within the next few years.
But, even if we are able to produce 90 mbd, what happens after that ? This is a problem that will not go away. It is a not a question of if but when we reach Peak Oil and subsequently, how the growing mismatch between oil supply and oil demand impacts on our economy and essential activities, like agriculture and health, that are all important. And moreover, how nations go about securing it.
It is also compounded by the fact that oil sources are getting harder and more expensive to acquire. In particular, more energy input is required to achieve the same recovery.
If we accept this to be the case, what options are there ?
Firstly, to defer or smooth the peak, reducing our oil demand by increasing energy efficiency and developing other substitutes. But the latter is problematic because of the extraordinary properties of Oil.
Energy dense ,liquid and so far cheap and accessible, there is nothing else on the planet that comes close. Bio-fuels have required almost as much energy to produce them as they can in turn produce ( usually in the form of oil ). Similarly Hydrogen, is not a fuel source but an energy carrier. Both of these media are therefore not solutions, in addition there are immense technological barriers remaining and the problems of scale.
Clearly the worst thing we could do right now is to increase oil use and dependence. And this is exactly what economic growth entails.
Growth over the last century has been the product of surplus energy from fossil fuels, and mostly oil. More goods, more transport, more resources, more food, more services, all depend on more energy.
Then there is more debt. How does this fit into the picture ?
Our economic growth is also underpinned by borrowing more from the future. Growth stumbles or slows and we borrow more to stimulate economic growth. The resulting debts we are accruing now, mean that we can only ever pay them off by further growth. This it would seem, is economic perpetual motion.
It is also reliant on a continual and ever growing source of oil. An incorrect and dangerous premise.
The second aspect, which is really adaptation, is planning for a low energy future. We have a limited amount of time in which plentiful oil is available, instead of using it for increased consumption we can build the infrastructure we will need to survive an oil depleted world. Electrified transport, renewable energy, and the decoupling of our health and agriculture from oil based energy. This will be very much more difficult if we delay until peak oil is here.
The longer we have to make the transition the more successful it can be. It will be far more costly if we wait for energy prices to rise and far more problematic if we wait for energy scarcity to arrive.
But right now we are doing nothing. It hardly features in mainstream debate, and politicians in the large part seem unaware, talking incessantly about economic and population growth. Both of which look very different in a post-peak world.
But it is what happens after Peak Oil that is the real challenge. Because peak oil means peak everything: health, food, water, you name it.
Peak Oil
Australian Association for the Study of Peak Oil and gas
Kjell Aleklet - expects peak oil to prevent most IPCC scenarios
- interesting, but I'm not sure we should rely on this to prevent climate change.
Life after the oill crash ( blog ).
Transition towns and community action
Transition towns
World changing: Changing your thinking
