A very glum, serious looking energy advisor, Dr. Robert Hirsch, made some alarming statements on CNBC recently — statements you’d be unlikely to spot on Fox News.
It is estimated that by 2025 worldwide demand for oil will increase 50% over 2005 levels — much of this increased demand coming from developing China and India. Dr. Hirsch now says it is “very likely we are at the maximum of world oil production” (that’s 85 million barrels p/day — and worldwide demand is said to be 87 million barrels, and rising). The thought of $13 per gallon fuel is enough to send shivers down any thinking man’s spine. Some now believe we’re heading for $200 p/barrel oil within a year. This will have significant implications for almost everyone, everywhere. And yet, it will only be the beginning.
Dr. Hirsch should know what he’s talking about. In 2005, at the (some could say, belated) request of the U.S. Department of Energy, Dr. Hirsch and his team researched and produced a sobering report, titled Peaking of World Oil Production: Impacts, Mitigation, and Risk Management (full report here, summary here).
The report looks at the implications for the United States of a peaking in worldwide oil production and outlines strategies for three potential scenarios:
- Scenario I assumes that action is not initiated until peaking occurs.
- Scenario II assumes that action is initiated 10 years before peaking.
- Scenario III assumes action is initiated 20 years before peaking.
The report examines what actions and alternatives could be applied to these scenarios, and estimates how long it would take to implement the same.
The upshot is that the consequences of peak oil vary significantly depending on when we begin to fast-track replacement fuels.
— Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
— Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
— Initiating a mitigation crash program 20 years before peaking offers the possibility of avoiding a world liquid fuels shortfall for the forecast period. — Summary Report
Dr. Hirsch is not an environmentalist. He is acutely aware of our complete dependence on the black gold, but his mitigation strategies include environmentally disastrous options like coal-to-liquids and the Alberta Tar Sands. The environmental consequences of Peak Oil are not the focus of his study, but rather an examination of what it would take to save the U.S. economy from heading into a 1930s type depression, or worse, once worldwide oil production begins to decline.
Based on studying oil fields that have peaked already (like those in the U.S., U.K., Norway, Argentina, Colombia and Egypt), Dr. Hirsch stated the following in 2005:
Examination of these actual histories showed that in all cases it was not obvious that production was about to peak a year ahead of the event, i.e., production trends prior to peaking did not provide long-range warning. In most cases the peaks were sharp, not gently varying or flat topped, as some forecasters hope. Finally, in some cases post-peak production declines were quite rapid, as in the U.K. for example…
It is by no means obvious how world oil peaking will occur, but if it follows the patterns displayed by these regions and countries, the world will have less than a year’s warning. — Summary Report
If Dr. Hirsch’s examinations are correct, and with his now believing we’re on the top, or just over the crest, of the short-lived edifice of global oil production, then this now puts us squarely in ‘Scenario I’….
The world has never faced a problem like this. Without massive mitigation at least a decade before the fact, the problem will be pervasive and long lasting. — Summary Report
“Massive mitigation”, to Dr. Hirsch, includes major advancements in vehicle fleet fuel efficiencies, ramping up production of oil from tar sands, fast-tracking dozens of coal-to-liquids and gas-to-liquids plants, and ‘enhanced oil recovery’ (pumping CO2 and/or water into waning oil fields to force more oil out) — most of which take significant time-frames to implement, and which become much more expensive to implement if oil has already peaked prior to undertaking such projects.
The other speaker in the clip above, Robert McTeer, Former President of the Federal Reserve Bank of Dallas, gives us an idea of a likely outcome of this ominous situation — we will drill more, and we will do whatever it takes to fast-track the production of liquid fuels, the environment be damned. As more and more people begin to feel the pinch, and it becomes increasingly obvious that our lifestyles, indeed, our very society — oil being the lifeblood of our modern existence — are about to rapidly unravel before our eyes, then priorities may well shift from concerns over the planet to concerns of personal and national economic survival.
President George Bush recently visited King Abdullah, ruler of Saudi Arabia. The main point on the agenda was to plead for increased oil production from the Kingdom . This was the second visit with this same request this year. Each time Mr. Bush has come away disappointed.
King Abdullah has been a long time advocate of stable oil prices, so his refusal to increase production could easily be taken to mean that the Kingdom is already operating at or near full capacity. Indeed, in 2006 a spokesperson for Saudi Aramco, the state-owned national oil company of Saudi Arabia, was quoted as saying that their mature oil fields “are expected to decline at a gross average rate of 8 percent a year without additional maintenance and drilling” and that even with “a multitude of remedial actions” (like drilling new, smaller fields and implementing enhanced oil recovery techniques), the decline would still be “around 2%”. (hammerblog).
The Saudis know that oil reserves are finite. In fact, they have a saying: “My father rode a camel, I drive a car, my son rides in a jet airplane — his son will ride a camel”. Even as far back as 1998 the Kingdom’s ruler could see the writing on the wall.
Abdullah began shaking the Kingdom out of its petroleum hangover by declaring in 1998 that the “boom is over and will not return — all of us must get used to a different lifestyle.” — Time
Sigh. 1998. Imagine what we could have done with that ten year window, if only politicians and economists didn’t tend to look at the world through their rear view mirror, or think of ‘the future’ as being only as long as a presidential term. Indeed, it was as far back as 1949 when the peak oil theory was born, with M. King Hubbert stating that the fossil fuel era would be of short duration. Mr. Hubbert was a geoscientist working for Shell, and in 1956 he predicted a peak in U.S. oil production — accurately pegging a decline in U.S. production by the late 1960s to early 1970s. Despite being slammed as alarmist, his predictions came true in 1970. Mr. Hubbert is famously quoted as saying “Our ignorance is not so vast as our failure to use what we know.” Like with climate change, peak oil deniers are becoming increasingly muted as the signs become more obvious, but it seems that, as a race, we live by the motto of “if it’s not broke, don’t fix it”. We don’t want to rock the economic boat, but then it capsizes.
Mustering support for an invisible disaster is much more difficult than for one that is obvious to all. — Summary Report
The times they are a-changin’. Crude oil was the cheapest, most accessible and most energy-rich fuel available. All other liquid fuel alternatives, for air, land and sea transport and for our fossil-fuel dependent agricultural systems, come at great cost — in terms of energy expended to get a return, and in terms of environmental impact. Reducing our oil dependency is the absolute best thing we can do. This is a hard concept for politicians to get their head around, as it involves people becoming more self-sufficient — with decreased profits for transnational corporations. Where after 9/11 we were advised to ‘go shopping’, the best practical advice for peak oil is to relocalise, to stop getting further into debt, and to start doing what we can to provide for our own needs. The days of ‘Victory Gardens’ are upon us again.
If we keep our heads in the sand, you can be sure that every effort will be made to drill and contest, and fight, for the world’s waning oil supplies — and our ever-more-desperate bid to maintain the status quo will drive us to ignore, and hasten the onset of climate change with destructive fuel sources like coal-to-liquids, which have double the global warming potential over standard crude deposits. As an environmentalist, it can be easy to just say “we need to invest in renewables”, but I also recognise that if we are indeed sitting atop the peak oil bell curve, then these clean, green alternatives will, just like their dirty counterparts, never be ready in time to stop major social upheaval over the next decade. Additionally, we will be working with the law of diminishing returns. For example, a wind turbine (made of steel, concrete and plastic) may not produce as much energy in its lifetime as was expended in its creation (if the energy required to build it doesn’t come from oil, then it would have to come from solar and wind — which will always be more expensive sources than fossil fuels). Imagine building a skyscraper, or a vehicle, entirely from wind or solar power?
On a more chilling note — as our population explosion over the last century has been in almost perfect parallel with our increased oil production, it is conversely believed that as oil sources dry up our world will inevitably have to return to something closer to our pre-oil population levels. It is said that ten calories of fossil fuels are used to produce one calorie of food that we eat. As oil prices continue to rise, food prices will do likewise, putting it out of reach for the poorest. As fuel shortages and rationing take hold, so it will also be with food.
The 3rd president of the United States, Thomas Jefferson, dreamt of the U.S. being an agrarian society — “a nation of farmers”. He may well, posthumously, get his wish.
The following clip gives me a little hope. There is one country that has already lived through its own peak oil experience. When the Soviet Union collapsed, oil supplies to Cuba rapidly ceased — suddenly plunging the nation into a world without hydrocarbons. It was an extremely painful transition, but difficult, pragmatic decisions were made — ultimately resulting in Cuba rising above its ‘special period‘, against the odds.
When it is dark enough, you can see the stars.