The so-called Hubbert Peak - a model which " posits that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve."
…or at the very least a future where high prices place the crucial resource/products created using oil out of reach of many ordinary consumers. Putting to one side for a moment of the contributions of oil to climate change, ‘Peak Oil’ offers a clue as to why we all need to be concerned about reliance on this fossil fuel. Developed, and the vast majority of developing countries are largely locked into a lifestyle in which oil is a crucial ingredient, not only of energy production, but also of wider societal infrastructure and consumer products. Peak oil has been predicted for years, whilst some argue that we are already there, but governments are woefully unprepared for the impact of unaffordable prices and scarcity. None of this information is new, nor are the arguments surrounding it. But they, and in particular their ramifications, are largely relegated to the background. This week oil consuming countries released emergency reserves in an attempt to cut the price of crude, and succeeded by around $6 (Levitt, 2011) whilst the failure of developed economies to leave recession has also weakened demand. These measures also have other ramifications, as members of the oil cartel OPEC express their displeasure at the move (Levitt, 2011). The concentration of oil resources amongst just a few countries has always weighed on the minds of strategists in consuming nations, accounting for warm relations, arms sales, and a host of ways in which consumer nations have been complicit in the reduction of other’s liberty elsewhere. It might be hoped that the uprisings in the Middle East allow developed nations to conduct relations only with societies which provide for the security and freedoms of their citizens, but don’t hold your breath. The importance of oil reserves will do little to lessen tensions in international relations.
Despite the release of emergency reserves and the weakness of developed economies the price of oil has remained above $100 a barrel (Macalistair, 2011). This is just a temporary measure, much the same as Osborne’s populist windfall tax on North Sea energy reserves, that will ultimately do little to forestall the harsh truth. Over the next few decades oil prices are likely to carry on rising as demand outstrips supply, even despite the development of African reserves, the Arctic and other unconventional sources. Developing economies such as China or India are increasing their consumption to the extent that total aggregate demand could well outstrip supply within the coming decades. That policy makers are yet to acknowledge this is largely an indictment of their, and our own, narrow and short-term horizons. There is little public debate as to how nations dependent on oil might cope with the resource becoming increasingly unaffordable. Consumers in the UK rage about the slow and not so slow rise of pump prices, closing their eyes to the fact that this is the market system they have signed up to – scarcity demands a premium. New technologies or sources may yet provide alternatives, but they are unlikely to help us avoid the pain of unaffordable oil in the short-term, or to come without costs of their own. Despite the term ‘fossil fuel’ oil is still treated as if it is a perpetual or renewable supply, even as a ‘right’, rather than natural capital which we are liquidating at an ever faster rate. As this continually fails to measure up to reality consumers will no doubt cry foul, despite our own complicity in the process. Having personal capital, of land or of money, may well determine whether we as individuals adapt to these circumstances given that governments have largely failed to challenge the vested interests which keep us on such an unsustainable path (it should be noted that public opinion will often reinforce these same vested interests over our own self-interest). An extent of social and economic pain is largely inevitable, especially if you’re nearer the bottom of the heap than the top.
L Godfrey
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References
Tom Levitt, 2011 : http://www.theecologist.org/News/news_analysis/954032/peak_oil_is_getting_closer_but_the_world_is_not_ready.html
Terry Macalistair, 2011: http://www.guardian.co.uk/business/2011/jun/23/oil-petrol-energy-prices
Related articles
- UK ministers ignored ‘peak oil’ warnings, report shows (guardian.co.uk)
- Why Doesn’t the UN Consider Energy Depletion? [Casaubon's Book] (scienceblogs.com)
[...] The wise will start planning for a post-oil future now [...]