Amidst growing tabloid indignation about public sector pension strikes, Athenian riots, Eurozone jitters, and probably something terribly important regarding X-Factor auditions, it is quite understandable that IYTT’s ever-burgeoning ranks of followers (4 the last time I checked) may have overlooked the recent revelations surrounding the previous Labour government’s offhanded dismissal of reports which suggested that Peak-Oil is rapidly approaching.
As Luke Godfrey has already eloquently dealt with the potential social, economic, and geopolitical effects of oil scarcity, as well as identifying the seemingly insurmountable challenges facing anyone who attempts to prepare for it, this article will assess the likelihood of peak-oil occurring in the first half of this century – because, let’s face it, one could be forgiven for assuming that, as the world marches ever confidently towards a big, black and sticky future, there is no problem.
Before I launch into the spurious and boring exciting analytical bit, it would be pertinent to define exactly what peak-oil is. It does not, as many people assume, describe the depletion of the entirety of the globe’s oil reserves. Rather, peak-oil is the point at which petroleum extraction reaches its maximum level and begins to fall below levels of demand. In 2009, an extensive study conducted by the UK Energy Research Centre concluded that this could be reached as early as 2020[1].
There are two primary trends which suggest such an outcome.
On the demand side, global oil use is anticipated to rise by 35% over the next 20 years, driven by economic growth in China, India, the Middle East and Latin America[2]. In the developed world oil consumption is also expected to expand significantly. In the case of the United States, for instance, demand for oil, led by the transportation sector, is projected to rise by 44% from 19.7 million b/d in 2004 to 28.3 million b/d in 2025[3].
In spite of the reassurances of oil companies and oil-producing nations, there is reason to question whether crude output can be expanded to satisfy these increasing demands. Firstly, estimates of reserves given by corporations and cartels are often exaggerated in order to raise stock prices and maintain favourable loan conditions – the downside revisions of reserve estimates which the DoE makes annually are testament to this[4]. Many of the oilfields upon which a large proportion of global oil consumption depends are nearing their peak sustainable volume. Secondly, the rate of new oilfield discovery reached its zenith in the 1960s and has declined in each successive decade[5].
The pattern of existing oil reserve depletion, falling rates of new oilfield discovery and increasing demand for petroleum will, as US Joint Forces Command has recently argued, render the function of oil as the motor of the global economy unsustainable[6]. The concepts of energy security, economic security and national security are inseparable. It must be made apparent to those in government and industry that a failure to recognise this and act accordingly will jeopardise them all. The benefits of reducing our dependency on oil far outweigh the costs of not doing so. History is littered with societies which, complacently identifying the safety of the present as the status-quo, ignored the fact that security is not guaranteed, cheap or eternal[7]. We must guard against becoming one of them.
J Chisem
[1] Froggatt A et.al ‘Sustainable Energy Security: Strategic Risks and Opportunities for Business’ White Paper for Lloyds360 (Chatham House, London, 2010) p.13 http://www.chathamhouse.org.uk/publications/papers/view/-/id/891/
[2] Raphael S and D Stokes ‘Energy Security’ pp.379-393 in ‘Contemporary Security Studies’ edited by Alan Collins (Oxford University Press, Oxford, 2010) p.381
[3] Barrels per day – US Energy Information Administration ‘Annual Energy Outlook: 2004’ (US Department of Energy, Washington DC, 2004) p.150, Table A11 http://www.eia.doe.gov/oiaf/archive/aeo04/pdf/0383(2004).pdf
[4] Campbell C and J Laherrere ‘The End of Cheap Oil’ pp.78-83 in ‘Scientific American’, London, March 1998 p.79 http://www.oilcrisis.com/campbell/EndOfCheapOil.pdf
[5] Klare M ‘Energy Security’ pp.483-496 in ‘Security Studies: An Introduction’ edited by PD Williams (Routledge, London, 2008) p.489-491
[6] Macalister T ‘US Military Warns Oil Output May Dip Causing Massive Shortages by 2015’ in ‘The Guardian’, London, 11th April 2010 http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply
[7] Ferguson N ‘Complexity and Collapse: Empires on the Edge of Chaos’ pp.19-33 in ‘Foreign Affairs, Volume 89, No 2, March/April 2010’ p.21
Related articles
- The wise will start planning for a post-oil future now (ifyoutoleratethis45.wordpress.com)
- Government Dismissed “Alarmist” Peak Oil Warnings From Own Staff (treehugger.com)
- Denial of Peak Oil Grows Dangerous: Opinion (thestreet.com)
