The story of peak oil
"Our civilization rests upon a technological base which requires enormous quantities of fossil fuels. What assurance do we then have that our energy needs will continue to be supplied by fossil fuels: The answer is - in the long run - none... In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect: the longer they last, the more time we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift." -- U.S. Admiral Hyman Rickover, May 14, 1957.
Admiral Rickover's 1957 speech, Energy Resources and Our Future, was likely inspired by a prediction made in 1956 by M. King Hubbert, then a senior geologist with Shell oil. Hubbert predicted that the United States production of oil (in the lower 48 states) would peak between 1965 and 1970 and then begin an irreversible decline. To put this in perspective, the United States was the world's leading producer of oil at the time.
Perhaps the most interesting aspect of this story is the reaction that Hubbert's prediction engendered. It was widely rejected by geologists, politicians and others, particularly as it didn't seem to immediately come true. As Matt Simmons explains "By the late 60's, Dr Hubbert had fallen into such disrepute that he'd become almost a joke... one of the classic reasons that people dumped all over Hubbert was that in 1970 when we were supposed to quote "run out" we had never produced more oil - the year we peaked." By 1981, the price of oil had increased ten-fold and US production had decreased by almost 30% from a decade earlier, despite drilling four times as many oil wells. US production has continued to decline ever since. In Hindsight, Hubbert had got it exactly right.
The energy crises of 1973 and 1979, although often considered political in origin, can be directly attributed to growing US dependence on middle-east oil as domestic production declined. The lesson we might have learned from these energy crises was that fossil fuels are finite, and as a society we aren't very good at acknowledging when we are approaching the limits. Instead, as the 1970's oil crises headed into the 1980's oil glut, we took a very different lesson: ‘the markets will provide.' Price increases will lead to greater production, balancing the supply-demand equation. In the 1980's increased global oil production replaced declining US production. But when global oil production peaks and declines, it's not clear what the market will provide. That may happen very soon.
Here are the facts: crude oil production has remained flat or declined since 2005, despite record high oil prices. Oil production has peaked and is in decline in at least 33 of the 48 largest oil-producing countries in the world. Global oil discoveries peaked in the 1960's and we've been using more oil than we've been finding every single year since the mid-1980's. Almost all credible sources have global oil peaking and declining no later than 2030. Many experts now believe that we have already reached the peak or will in the next five years or less. This latter group includes Matt Simmons, T. Boone Pickens, Colin Campbell and others.
The debate about when we will peak may be beside the point. With the most optimistic scenarios predicting we will start running out of oil in 20 years, Admiral Rickover's perspective seems apt when he stated the exact length of time fossil fuel reserves will last is important only with respect to how long we have to transition to other energy sources. In fact, these were the conclusions of a report issued in 2005 by the US Department of Energy, Peaking of World Oil Production: Impacts, Mitigation, and Risk Management. The report states that "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem... without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."
Oil doesn't simply power our cars and heat our houses, though in northern countries such as Canada the latter is no small concern. It also underpins our agriculture, mining, manufacturing and petrochemicals industries. In western countries every one calorie of food we consume used more than ten calories of fossil fuels to grow, process and transport. There are no options to replace oil one-for-one with something else - the only option is to learn to do more with less, and then try to figure out where even that will come from. Massive investment in renewables combined with (Re)electrification of transport, more organic and urban farming, more bicycles and public transit, and less stuff that we don't need... these might create a new future, but in all probability with the peaking of oil, the old future that we all imagined dies here. Fortunately, our happiness does not depend on lots of material stuff (even if we think it does) and this new future could even be better than the old one
If we want a lab experiment in surviving peak oil, we need look no further than Cuba. When the soviet union collapsed in 1990, one of the results was that this small island nation was suddenly cut off from its largest trading partner, and its imports of petroleum suddenly dropped by more than half. One of the first things to collapse was Cuba's agricultural sector. Cuba adapted to the suddenly limited resources by increasing urban agriculture and decreasing transportation distances, by decreasing the size of farms and increasing labour by humans and animals over large machinery, and by going organic. Cuba went from a farming system that was almost entirely conventional modern agriculture, with inputs of fertilizers and pesticides that actually surpassed the United States, to 80% organic farms, in only a decade.
The movie that was made about Cuba's post-oil revolution was called The Power of Community. This is one movie scenario dealing with Peak Oil - another might be Mad Max. While Mad Max is of course ridiculous, it also has an uncomfortable parallel in the Iraq war - expending vast amounts of energy to capture ever dwindling energy reserves. Understanding and responding to peak oil requires a re-evaluation of all of our limits to growth. The 1972 book of this title predicted peak oil, climate change, and food limitations (which we are also seeing today). The Limits to Growth made it clear that pursuing growth will lead to inevitable collapse as we exhaust the earth's systems and reach one limit after another. The time is almost gone to heed their warning, but peak oil, in combination with climate change, may be our final wake-up calls.
In 1976, after his famous prediction was realized, M. King Hubbert wrote "During the last two centuries we have known nothing but exponential growth, and in parallel we have evolved what amounts to an exponential-growth culture, a culture so heavily dependent on the continuance of exponential growth for its stability that it is incapable of reckoning with the problems of non-growth. Since the problems confronting us are not intrinsically insoluble, it behooves us, while there is yet time, to begin a serious examination of the nature of our cultural constraints, and of the cultural adjustments necessary to permit us to deal effectively with the problems rapidly arising."
"Our Energy Challenge" a presentation by Richard E. Smalley (1943-2005), Gene and Norman Hackerman Professor of Chemistry and Professor of Physics & Astronomy, 1996 Nobel Prize Winner.
