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(this page is a reproduction of the Peak Oil intro that used to live at www.leeds-susnet.org.uk dug out from http://web.archive.org due to leeds-susnet.org.uk being offline! - credit J. Atkinson)

  • Overview
  • Resources


  • Overview
    The term "Peak Oil" is used to describe the point in time when global oil production reaches its highest ever flow rate. After this event, oil production will enter permanent decline. At first this might not seem like a very important event, until we begin to look at how much we currently rely on oil, or try to find alternatives - in large enough amounts - for when it starts drying up.

    At the moment, the world uses around 84,000,000 barrels of oil every day - that works out at 23,501,396,286 pints every day, or the equivalent volume of 2 Lake Windermeres every year.

    We've come to depend on it for nearly everything that allows us to live our way of life. Oil makes up 40% of our total energy use, and 95% of our transport fuel. We use it as both a fuel and a lubricant to keep our cars, lorries, trains and planes moving. It is used as a feedstock for the plastics, chemical and pharmaceutical industries. Man made fibres come from oil. Perhaps most worrying of all is that modern agriculture depends on petroleum-derived weedkillers and pesticides, as well as natural gas-derived fertilizers to achieve current yield levels.

    There are some alternatives that can be used for many of the jobs that oil currently performs. However, there are problems, and in terms of the amount we currently use, nothing comes anywhere close. For example, biodiesel can be used to power lorries and cars, but it comes from crops that are currently grown using oil-derived pesticides. Even if they were grown organically, it would take an area 5 times the size of the UK's existing agricultural land to provide enough biodiesel for Britain's current petrol use. And then where would we grow our food?

    Looking at alternative sources of hydrocarbon energy doesn't give much more hope; heavy oils, natural gas, and even coal can be turned into synthetic crude, but there are serious engineering, environmental or political problems with all of them that mean that production of them will never be ramped up quickly enough to fill the gap left by declining supplies of conventional crude.

    For example, there are massive oil sands deposits in Canada but extracting it is far more costly than conventional oil in financial, energy and environmental terms, and the overall production rate is ultimately constrained by the amount of fresh water and natural gas (massive amounts of which are used in processing the sands) available in the region.

    Many governments and scientists still hope that nuclear fusion technology can be developed to provide almost limitless supplies of energy but even optimists admit that "Making fusion a viable energy source for mankind is an enormous scientific and technological challenge." The fact that the nuclear fusion research sector has consistently promised results within "a few decades" yet still failed to deliver any major results gives little confidence that a solution will be found in time.

    The much-hyped "hydrogen economy" is very unlikely to materialise. Hydrogen only occurs naturally on earth as a compound - it needs to be "cracked" from the substance that contains it (such as water or natural gas). Cracking hydrogen generally takes as much energy as you get from the hydrogen at the end of it, so there is no net energy gain in the process. Furthermore, if we switched all the world's 600,000,000+ road vehicles to run on hydrogen, we'd also need to retrofit our entire fuel distribution infrastructure to handle a more volatile substance - at a time when rising energy prices will be making such major, industrial projects far more expensive.

    A recent report for the United States Department of Energy concluded that a "crash programme" of implementing efficiency measures plus stimulating increased production capacity for other sources of hydrocarbons would need to be initiated some 20 years before global oil production peak if severe economic hardship is to be averted.

    So what might happen when worldwide oil production enters decline? At the most basic level, the price of oil will rise, pricing the poorest people out of the market first. Some commentators believe that as oil, and subsequently all other forms of energy become ever more expensive, businesses will increasingly struggle with their input costs while at the same time their customers will be spending less on consumer goods as a growing proportion of their salaries are needed to pay energy bills.

    Many firms could find themselves in difficulty, leading to increasing redundancies, further weakening consumer confidence and leading to a vicious circle resulting in growing numbers of business failures. This could have grave implications for the stock market, and by extension any investments dependent on it, such as many managed pension funds.

    The fact that consumer debt is at an all time high in this country is further cause for concern. As energy prices rise, the rising overall cost of living is likely to put pressure on the Bank of England's Monetary Policy Committee to raise interest rates in order to control inflation.

    Rising interest rates for customers already struggling with large debts could easily lead to growing rates of bankruptcy. This could spell real trouble for banks that have lent out as much as 7 or 8 times their own assets' total value. If enough customers start defaulting on their debts, the lending institutions could find themselves with burgeoning portfolios of reclaimed property (that nobody else can afford to buy, so their value will collapse) and become bankrupted themselves.

    Rising oil prices are also likely to have a significant impact on healthcare standards as the price of modern, petroleum-derived medicines, plastic equipment such as syringes, and the electricity to power hospitals and the many machines in them all rise.

    Now consider the fact that we depend on oil and natural gas (which is due to peak around 10-20 years later than oil) for our current food yields, and we depend on oil-powered planes and trucks to transport it to our supermarket shelves. Modern fertiliser and pesticide-intensive farming methods have destroyed much of the natural, organic health in the world's soils, so simply switching to organic farming will take time - it usually takes about 3-5 years for depleted soils to recover to the point where they can become more productive again. If we leave it until there is an oil crisis, this period of transition is likely to be one characterised by widespread hunger, similar to the Special Period experienced by Cuba in the 1990s.

    In summary, abundant, cheap oil will - in the course of our lifetimes - become a thing of the past. The transition will come as a shock to many in society, and the less we do to prepare for it, the worse that shock will be. Our governments and business are unlikely to solve problems for us because they are primarily focussed on winning the next election or maximising profits for this financial year - long term planning for a difficult future (that may require implementing unpopular policies or compromising near-term profitability) is a secondary concern. The sooner that we, as communities start planning for Peak Oil and building a "parallel public infrastructure", the more prepared we will be when Peak Oil's effects really start to bite. Inaction now means greater suffering later.

    OK, so when exactly is all this likely to start happening then? Well, unfortunately Peak Oil is a phenomenon that you can only really identify with certainty in hindsight. It is possible that it will be more of a drawn out production plateau, rather than a distinct peak. However, There is consensus among several highly respected independent energy industry figures that it will happen within the next 5 years, if it hasn't already happened. Certainly, the fact that the price of the benchmark West Texas Intermediate Crude oil has tripled over the last 3 years suggests that supplies are getting tight, and the fact that many of the anticipated economic indicators are becoming apparent, suggests that - Peak Oil or not - the economy is already begining to slow down.



    Resources 

    Factsheets

  • Peak Oil Summary - Mike Tooke

  • Media Articles

  • New Statesman Energy & Environment special, October 2005

  • Academic Research Papers, Industry journal articles etc

  • "Peaking of World Oil Production: Impacts, Mitigation, & Risk Management" - Robert L Hirsch, Roger Bezdek & Robert Wendling


  • "Megaprojects report, April 2006" - Chris Skrebowski


  • "Megaprojects report, October 2005" - Chris Skrebowski


  • "Oil Sands Fever: The Environmental Implications of Canada's Oil Sands Rush" - Dan Woynillowicz, Chris Severson-Baker & Marlo Raynolds

  • Presentations & Slides

  • "The Second Great Depression - Causes and Responses" - Colin Campbell (requires flash player)


  • "Peak Oil - The Emerging Reality" - Chris Skrebowski


  • "Hirsch Report Overview" - Joe Atkinson

  • TV, Film & Multimedia

  • "Four Corners Broadband Edition: Peak Oil - Jonathan Holmes Investigates"


  • Peak Oil explained - flash animation


  • "History of Oil - Rob Newman (requires real player)


  • "End of Suburbia: Oil Depletion and the Collapse of the American Dream" - Previews and UK distributor.


  • "The Power of Community: How Cuba Survived Peak Oil"


  • Arithmetic, Population & Energy - Excellent lecture by Dr Albert Bartlett (retired professor of physics from University of Colorado)


  • The Watt Podcast



  • "Simplicity is the ultimate sophistication" - Leonardo da Vinci