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Peak Oil and Climate Change: No Cod Either

July 22, 2010

The leader of a poor country goes to the leader of a very rich one.

“Please sell us some oil,” he asks, “so we too can enjoy the wonderful life your people enjoy.”

“There isn’t any oil”, comes the reply.

“That’s no good. How can I tell my people they must live in poverty, while they watch you on TV having a fine life? Please sell us the oil we need”.

“There isn’t any oil”.

“If you don’t sell us the oil, the poor people of the world will rise up in great anger, and take it from you”.

“They can’t,” replied the weary leader of the rich country. “Listen carefully. There isn’t any O–I–F–L”.

The leader of the poor country looks baffled. “There is no “F” in OIL”.

“That’s just what I’ve been trying to tell you!”

1

 Sorry about that, the oldest joke so far. I found it down the back of the wardrobe concealed in a big ball of fluff, but it does the job. For one thing, the joke as I first heard it – where cod was the subject – applied only to a fish and chip shop, not the whole bloody ocean, which goes to show that irony is a weapon easily concealed. Another purpose I have is to alleviate, temporarily I’m afraid, the apocalyptic tone that creeps in to this blog from time to time.

I really want to write positive, hopeful posts, but because many of my ideas have to be considered in the context of what I think we’re doing wrong, I have had to write about many of the negative aspects of human behaviour. I haven’t spent much time extolling our virtues, however. For the record, let me state that humans at their best are wondrous, luminous creatures; incredibly talented, skilful beyond any reasonable expectation, and extraordinarily surprising. At their worst, they are utter shite.

I’m on a mission, as I’ve already admitted. It is to put the creation of a utopian civilisation at the top of every agenda. All the time I’ve been writing, I have been seeking any opportunity to persuade the reader that doing something about our lot and improving it is urgent. Reading this blog or my essays is not enough however, not nearly enough. So far, I’ve alluded to certain disasters we might bring on ourselves, like the destruction of our culture, screwing up the food chain or having a another world war.

The trouble is, these things are only possibilities, and may not happen. My experience of humans is that unless they have to change, they will not – how many disasters could have been averted by the measures that were put in place after the event? All in all, I don’t think any possibility about which I could hypothesise would actually be sufficient to actually cause change. What I need is inevitability, something I can predict with confidence, a catalyst event that cannot be avoided and that will lead to catastrophe if we don’t change our ways. A date for the apocalypse would also be helpful. The catalyst is the end of fossil fuels; the date, around 2025 (see footnote).

To repeat that another way: there is going to be a monumental problem that will involve every single person on the planet, in less than 20 years. And since dates like this offered by pundits like me are usually spurious, let me explain how I came to it. There are various estimates, from a variety of sources, which predict when oil production will slow down. The earliest projection I found was 2014, the latest 2025. I have erred on the side of caution, and quoted the later date. I then checked the data with the International Energy Authority figures. They have published comparisons between various research bodies, energy companies and so on, and the latest date for a slowdown averaged out at 2025. It was also interesting to note that while every oil production graph declined over time, every projection of world energy requirements went steadily upward.

Our modern civilisation has come about because we found a way – apparently – to get something for nothing. We didn’t have to create coal, gas or oil. All we had to do was get it out of the ground and use it. Fossil fuels are rather like a one-shot rocket booster for mankind, provided by nature. You fire it, civilisation advances very fast for a while, then the rocket dies and you look back to see how far you went. When the balance sheet of our times is audited by history, I think we will be found wanting of judgement considering where we have chosen to go on this once-in-a-mankind free ride.

The people of the industrial west have very little notion of how dependent they are on fossil fuels, especially oil. Energy has been so cheap that the costs of industrialisation were greatly subsidised from the beginning. The entire edifice created out of the industrial revolution is based on the fossil fuels, with no other alternatives. When the oil and gas run out (coal being rather more limited in utility), there will be great change in every walk of life.

Let’s consider a few.

Our factories run exclusively on non-renewable energy sources. Absolutely everything we value about our consumer lifestyles in the west will be affected. The consumer goods that constitute our main rewards will become very expensive, until virtually everything is a luxury again, rather than the necessities they have become. Healthcare and medicines will cost a great deal more, since all pharmaceutical industries use raw energy in copious quantities. The infrastructure of the industrial nations, which burns energy like there’s no tomorrow, will shrivel into a parody of itself.

Rationing of one kind or another will be introduced if industry cannot produce sufficient goods. There will be waiting lists for every manufactured product, including clothes, tools, decorating and building materials, computers, phones and CDs. The demand will still exist, but we’ll be back to delivery in a year of our one and only TV, and our choices will be limited in ways we can barely conceive of, surrounded as we are by the cornucopia of goods we take for granted.

Plastic will become as expensive as teak or ivory, while the extraction and processing of raw materials will be prohibitively expensive for all but the most basic commodities. Mass-production will have to be scaled down considerably as the cost of electricity and fuel oil goes through the roof, and the diminished scale will increase all manufacturing costs. Getting to and from work will cost ten times what we pay now. Personal transport will disappear as we know it; fuel cells and hydrogen-powered vehicles will never run so cheaply they can offset the enormous investment a car will come to represent, since a car’s production is one of the most energy-intensive industrial processes. Road, rail and sea transport overheads will suffer dramatic increases, greatly adding to the costs of moving materials and goods, especially foods, as well as people. Air travel will cost a fortune, the routes and flights greatly diminished as the price of jet fuel soars.

And in every example I have given, there is another factor that will cost us dear. Think how many people work in these industries, then think what will inevitably happen to them when the oil starts running out and factory after factory is forced to close down, or severely cut back output. Not only will the price of everything go up, but many more people will have no job to go to, and no income. The economy will shatter and all the services and institutional support we take for granted, like the NHS, benefits and pensions, will all cease because the tax revenue on which they depend will wither away. The outcome of such a scenario is a return to widespread poverty all across the western world. An entire culture betrayed by its own values; if society believes that through conspicuous consumption they get their reward, what happens to us when we can no longer be rewarded? What good will free trade and global markets do us when there’s nothing to buy, or nothing we can afford?

I’m having adjectival problems getting across the enormity of this issue. Wherever you are right now, if you look around you, everything you can see was made, one way or another, out of fossil fuels. Every item in your home relied on fossil fuels for its manufacture. Everything you own required fossil fuels to get it to your home, and depends on fossil fuels to take it away when you’ve finished with it. The cheap food you buy depends on the products of the chemical industries, harvested by machines and delivered in ships and lorries, all of which depend on fossil fuels. The list goes on and on and so am I, so I’ll stop now, but I hope you’re convinced.

2

Please have pity on this poor messenger, for he hasn’t yet delivered the worst of it. There are two geopolitical implications to the end of cheap energy that I think are of grave concern. The first issue arises when people who are used to a high standard of living find they can no longer maintain it. In this case, the US – by far the most energy-dependent country in the world – will be worst hit by a slowing down in fossil fuel production. Even now, Americans enjoy petrol that costs a fraction of the price in other nations. The car-owning voters are so committed to their vehicles and the right to travel in them that no federal government has been able to take them on. The whole geographic infrastructure, from shopping to work, education through urban planning, is based on car and plane travel. Without cars, America would come to a standstill overnight.

But American consumption is not just about cars, it’s about everything. As the US economy starts to decline, and a raft of social problems make their first appearance, there will be tremendous pressure on the government to “do something about it”. It has always been the policy of US governments to first protect the right of the US citizen, and in the current world order that can easily be seen as a mandate to protect the right to consume.

In light of the way we often seek to blame others, and bearing in mind the US is the greatest military power in the world, it would not be beyond the realm of speculation to suggest that other nations sitting on extremely valuable oil reserves, especially in the middle east, are coming under increasing threat. While setting prices in keeping with oil’s scarcity, they may find themselves blamed by the US administration for causing a reduction in the US standard of living. Shortly thereafter, they would be invaded to “protect ordinary Americans from the threat posed by unscrupulous Islamic leaders, who never forgave us for invading Iraq and now seek to manipulate our economy” or some such.

Europe and the Far East, desperately needy themselves, and outraged by the US dominance of the energy reserves, would align themselves with the remaining oil producing countries, mimicking the interlocking defence agreements that brought about the first world war. As positions harden into US, European and Pacific Rim alliances, each block would be vying for access to the remaining cheap energy reserves in order to pacify their desperate electorate. It’s alarmingly obvious where all this could lead.

The second globally significant aspect of a slow-down in energy production takes the form of a broken promise. The benefits of industrialisation have been most iniquitously distributed, and much advantage has been taken of underdeveloped nations through political and economic colonialism. The knowledge that things are very unfair is widespread, and the only thing that keeps the lid on is the promise that one day, you too could have all these wonderful things.

Throughout the history of capitalism, the founders have sought to enlarge their markets by bringing their wares to other nations. When a nation was too poor to join the club, they were promised that if they adopted democracy, built an infrastructure, educated their people and worked industriously, they too could enjoy the fruits of mass-production (although some managed this without the inconvenience of democracy, but never as well, it seems). In the meantime, we would help them achieve their industrial ambitions in exchange for cheap raw materials and labour – and I do mean cheap. The exploitation of poor nations by rich ones is notorious, but the anger of poor nations is tempered by a vision of the future in which they can live like Americans (presumably by exploiting someone else, although I can’t imagine who that will be. We can’t all be slave-owners; somebody has to play the slave).

With the decline of cheap energy, the emerging nations who invested in industry will not have time to produce enough benefits to achieve parity with the wealthy nations. Those nations who have yet to gear up for industrialisation never will. All underprivileged countries will look at the west, and realise that not only did one-fifth of the world’s population enjoy a privileged lifestyle on the back of the four-fifths who contributed the resources; they also used up all the energy that made it possible. It will be the end of the dream for underdeveloped countries, faced with the certain knowledge they will remain that way because there are no cheap fossil fuels left with which to rebuild their countries. The rocket will flicker and the engines die. Only then will many realise that only a few took the ride, leaving everyone else behind.

3

 The year 2025 is not when oil will run out. That event is probably a hundred years away, or more. This date is, however, the reasonable prediction of something completely inevitable; the decline of available energy. One day around that time, OPEC will announce that it couldn’t produce quite as much oil as in the previous year. It might not be 2025; an error of a few years either way is neither here nor there. What is certain is that the downturn in production will happen in your lifetime, unless you are over 70 as you read this.

With the slowdown will come the panic, and the wars. Economic markets will go into freefall, because there can be no possible light at the end of the tunnel except our worst energy nightmares, dirty brown coal or nuclear fuels. Nuclear power is the only possible timely replacement for fossil fuels that can produce enough clean power to keep industry going. A proliferation of nuclear technologies through the developing world – which they will demand as the only way the promise made to them by the west can still be met – will also greatly exacerbate the risk of nuclear incidents, civil, military or subversive. Vast sums will be plunged into renewable energy sources and ways to get rid of the increased quantity of radioactive waste, but much too late. New nuclear power stations, which can take many years to build and bring on line, will only be started when we are already in trouble; the opponents of nuclear power are very vocal and wield considerable influence.

While I too deplore such dangerous technologies, I cannot help but conclude the arguments are flawed. It has long been recognised that renewable energy will never provide the kind of power needed to make steel, build ships or run train networks. Are we to stop doing these things, or watch them become elitist activities through the sheer expense, because of an aversion to the power source that could keep them going? That said, the faster we develop benign energy sources, the less nuclear power would be required. It is a matter of balance and prioritisation.

Nor is it that our demands for cheap energy are stable, let alone diminishing. As I said earlier, all projections of world energy demands over the next century can be represented as a line travelling forever upward on the graph. Our needs are on a crash course with reality, and the collision will be one hell of a bang.

Footnote: This piece was written in 2002. Turns out that the IEA was lying, so the 2025 date is rather optimistic and the collision is imminent. Here’s one chilling assessment:

 

“A supply crunch appears likely around 2013…given recent price experience, a spike in excess of $200 per barrel is not infeasible”

Professor Paul Stevens, Chatham House, writing in the Sustainable Energy Security: Strategic risks and opportunities for business white paper produced by Lloyd’s of London and Chatham House

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18 Comments leave one →
  1. July 22, 2010 3:49 pm

    Hi Graham,
    I think you’ve said it all in the footnote.

    The father of Peak Oil is usually considered to be M. King Hubbert, who correctly predicted that U.S. oil production would peak in the early 1970s. He put global peak oil at around 2000.

    There are always estimates that put peak oil decades away but I would be skeptical of them because there is clearly an ‘information pyramid’ at work here. The masses who have never concerned themselves with dwindling oil resources are at the bottom , you and I are in the middle , and at the top are the few with much more reliable and (more importantly) accurate information to hand. Now those people at the top, they’re not known for being completely candid. They are going to suggest peak oil is due at a different time than when their estimates suggest. And it’s in their interests to suggest that peak oil is FURTHER OFF than it’s actually due. Those suggestions are the sort of thing the IEA publish imho.

    Also , surely the fact that we are now scrambling for oil on the edge of the continental shelf is another indicator that the low hanging fruit is gone.

    “The Long Emergency” by James Howard Kunstler is on my reading list for this one.

    All the best , Hengist

  2. The King in Yellow permalink
    July 22, 2010 3:59 pm

    Thanks for cheering up my day.

    Somewhat apocalyptic in tone, but given a time lag of 8 years still true today.

    I tend to think we still have time to mitigate against peak oil and the impact on our fossil fuel dependent economic and industrial model. In some ways the gulf oil disaster may be a useful event to concentrating the minds of people that the low hanging fruit has been picked and that oil really is getting scarcer, more difficult to drill, and thus more expensive.

    Time is against us though

    All the best.

  3. Graham Wayne permalink*
    July 22, 2010 4:25 pm

    Hengist: thing I wonder is if the government is privy to the right information. If they are – and were not duped by the IEA, why are they not responding to a crisis that some commentators – like the Chatham House contributor – think is only three or four years away?

    King In Yellow: I’d apologise about the tone, except that climate change combined with peak oil adds up to something pretty monumental, so perhaps it is appropriate. I’ve been told off before for ‘trying to scare people’ but if we don’t find this scenario scary, just how complacent are we?

  4. July 22, 2010 4:32 pm

    I was going to say “2025, you’re optimistic!”, but then I saw your footnote. Still, 2013-14 is considered optimistic in some circles. Notice that liquid oil production has pretty much plateaued since 2004.

  5. July 22, 2010 8:43 pm

    Here’s what I thought two years ago.

    http://muchachoverde.blogspot.com/2008/07/my-oil-depletion-strategy.html

    My view hasn’t changed but today there are 79 000 results on google. I’m not sure that we’d agree on a definition for ‘the government’, but there’s not a lot they can do anyhow. In that context the Chatham House report is informed and timely, major decision makers will take notice of it, the vast majority of us will forget about it. I hate to sound cynical but that’s the natural order of things. Thanks for bringing it to our attention.

    In essence the establishment/government are responding. 40% cuts, new age of austerity, etc. Personally I don’t buy the line that the financial crisis has it’s roots in a few poor people in Detroit defaulting on their sub-prime mortgages.

  6. July 23, 2010 10:13 am

    Hengist, I like to think of peak oil like a car crash unfolding in slow motion (climate change too, though in slightly slower motion). The car is already out of control and there is little the driver (government and business and whomever else exercises authority and influence in society) can do to avoid a smash (I won’t call it an accident because they had plenty of warning on both counts). However, the reactions of the driver during the last few “seconds” (years and months) prior to the crash can still have a big effect on the nature and severity of the damage. So, I think the driver still has an important role in preventing a multi-car pile up with most passengers dead and hopefully just having a fender bender with some severe whiplash and a few vehicles written off.

    PS Since you don’t have comments on your own blog, I’ll have to tell you here that I think you’ve misspelt sesquipedalian.

  7. adelady permalink
    July 25, 2010 4:32 pm

    The car crash analogy is very apt. I remember once having to go to a training course on driving company cars. The professional driver doing the lecture was very, very insistent that we should always keep our eyes moving side to side – so that we had the habit when we needed it.

    He described the tyre marks left at headon fatal crash sites. They nearly always consist of 2 sets of tracks heading straight for each other. At the speeds involved, this is a very long distance. He pointed out that if *either* of the drivers had looked to the side, rather than frozen staring in horror at the approaching disaster, they would have steered in the direction they looked – and avoided the collision entirely – especially if both had done so.

    We may not be able to avoid a crash – but if we look to alternatives or other directions, we can reduce the impact considerably. (We’ve bypassed all the escape routes.)

  8. Graham Wayne permalink*
    July 25, 2010 6:28 pm

    I agree – the ‘crash’ is inevitable. We are talking about what I would call rushed adaptation. We had time to make this relatively painless but missed that boat, yet it is true we still have time to avert the head-on collision.

    I worry most about the US in this respect. Reading this weekend about the anti-immigration feeling apparently growing nationally now, not just in border states, suggests the far right are attracting growing support. Let’s hope this doesn’t lead to a resurgence of the anxiety driven politics of the 50s, a shadow that seems to be looming again whenever some senator calls for trials of science. Did they learn nothing from Scopes at all?

  9. adelady permalink
    July 26, 2010 3:48 am

    The immigration thing perplexes me. The right wing in the US seems to be anti both AGW and the idea of more immigration (I think the illegality issue is just window dressing for a more general distaste).

    Why hasn’t anyone worked out that mass migration is one of the guaranteed consequences of the differing impacts of climate change. The first, worst affected are going to have to move – where will they go? And then if more are affected, where do they go?

  10. Graham Wayne permalink*
    July 26, 2010 5:57 am

    adelady

    Actually, both AGW and immigration speak to the longstanding US distaste for ‘the other’. It’s a country founded by those fleeing persecution, from Christian sects through Russian pogroms against the Jews to the Irish rack rents. Little wonder they wanted to be isolationist – ‘leave us alone and we’ll do the same to you’ – but the Wall Street crash in 1929 punctured their sense of invulerability, while WW2 reminded them of the prodigious power they could bring to bear as the development of the military-industrial complex also lifted them out of the depression. (The black slaves, while strictly speaking immigrants just like everyone else in the US, also became ‘the other’ and are as feared now as they remain disenfranchised).

    Given their fear of communism after WW2, and the way the US gained imperial (and cultural) ascendancy for a brief but dizzying moment, I think that the conflation of various right-wing anxieties causes the US conservatives to seek any number of scape-goats for the betrayal of unregulated business (the dot com boom and bust, then Enron, the sub-prime) while even nature seems to be picking on them, their pre-eminence falters and their nascent empire turns to dust. The immigrants and the lefties they think are behind climate change are simply more manifestations of ‘the other’ – those that have been persecuting Americans since the Mayflower landed, and that they cannot seem to escape without leaving the planet.

  11. July 26, 2010 10:36 am

    and that they cannot seem to escape without leaving the planet.
    Which is another typically right-wing reaction to ecological degradation: plenty more planets to colonise and pillage.

    And, of course, the mythological “origin” of the US as groups fleeing persecution and wanting to be left alone elides the story of the indigenous population and the disaster that these original refugees caused to them.

  12. Graham Wayne permalink*
    July 26, 2010 10:57 am

    Quite right Byron – always easier to see oneself as a victim, rather than an oppressor. How quickly they stopped being victims, and started the victimisation…

  13. July 26, 2010 11:02 am

    Not that they are particularly unique in that regard. The tendency of victims to themselves become bullies is well established at personal, communal and national levels. I don’t have a particular anti-US hatred, though as global superpower, their hypocrisy is more visible than most.

  14. The King in Yellow permalink
    July 26, 2010 3:28 pm

    Of late I have noticed that nuclear power is touted as the magical solution to peak oil and other issues of AGW.

    The deniers, and indeed everyone should take not of this article in today’s Torygraph:
    http://www.telegraph.co.uk/finance/markets/7909323/Is-uraniums-three-year-bear-market-over.html

    Seems that, if we all jump on the nuclear band wagon, then by 2030 at least supply of uranium will be insufficient to meet demand. This is on top of increased costs of that uranium. Now obviously, new deposits of uranium will probably be found, but we are still talking about a finite resource being competed for by an increasing number of nations.

    Another quick fix that simply staves off the inevitable.

    All the best.

  15. July 26, 2010 5:10 pm

    Though die-hard cornucopians who see a nuclear salvation talk about fourth generation fast breeder reactors that use spent fuel from old reactors and so recycle nuclear waste. I don’t have the expertise to know whether this is merely hand-waving or has credibility.

  16. Graham Wayne permalink*
    July 26, 2010 6:58 pm

    Uranium could be processed economically from seawater – 2008 costs per kilo were $300 – which is hugely expensive compared to the average cost of mined uranium. But if demand goes up so will the price, and there are several methods being researched. A mere decade of interest has seen extraction efficiencies rise by an order of magnitudes, so we are not going to be short of the stuff.

    Is nuclear power desirable? In its current form, perhaps not. However, it is a baseload solution we know we can build, and that will work. Personally, I think there is rather too much anxiety about nuclear – with all due respect to the terrifying power we unleash in such systems – but my concerns would be addressed to terrorism and dirty bombs rather than meltdowns.

    I also remind myself that, like all technologies, nuclear power generation can improve. I don’t know much about 4th gen stuff, nor the ‘safe’ versions. I would find it hard to believe we could not improve on, and perhaps make safe, some version of nuclear power. But we come full circle in discussions like this, because we are running out of time to sort this stuff out (not to mention what to do with the prodigious amount of radioactive waste already sitting around).

    It also seems ironic that for my entire life, fusion has been touted as the endless energy supply of the future, and in the future it stubbornly remains – as far away now it seems as it ever was. (Sorry – bit cynical there…)

  17. July 26, 2010 9:07 pm

    Fusion is where it has been since the 50s: “ten years away”.

    You’re right that proliferation is a bigger issue than meltdown, though in a world going through a slow motion car crash, it is an open question whether there will be adequate funds to maintain a whole raft of new nuclear plants (and to decommission all the ones currently reaching the end of their lives, where it can take decades more to decommission). I’ve heard that the safety cut backs during the final years of communist eastern Europe were quite scary and that there were not further explosions was largely down to good luck.

  18. Watching the Deniers permalink
    July 28, 2010 11:45 am

    Great post about an issue that does not really get enough coverage.

    If climate change is the devastating right hook, peak oil is the sneaky sucker punch that will catch us by surprise.

    Right at the very time when we’ll need the money, resources and commitment to mitigate and adapt to climate change we may find our oil dependent infrastructure and industries collapsing even quicker.

    I strongly recommend people read the Hirsch report prepared for the US Department of Energy.

    http://en.wikipedia.org/wiki/Hirsch_report

    http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf

    The report concludes the onset of peak oil will be abrupt and severely disruptive. It calls for forward thinking and investment in mitigating its impact.

    Sadly like action on climate change, not enough is being done.

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