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TechnoratiIt used to be that only environmentalists and paranoids warned about running out of oil. Not anymore. As climate change did over the past few years, peak oil seems poised to become the next big idea commanding the attention of governments, businesses and citizens the world over. The arrival of $119-a-barrel crude and $4-a-gallon gasoline this spring are but the most obvious signs that global oil production has or soon will peak. With global demand inexorably rising, a limited supply will bring higher, more volatile prices and eventually shortages that could provoke -- to quote the title of the must-see peak oil documentary -- the end of suburbia. If the era of cheap, abundant oil is indeed coming to a close, the world's economy and, paradoxically, the fight against climate change could be in deep trouble.
Though largely unnoticed by the world media, a decisive moment in the peak oil debate came last September, when James Schlesinger declared that the "peakists" were right. You don't get closer to the American establishment and energy business than Schlesinger, who has served as chair of the Atomic Energy Commission, head of the CIA, Defense Secretary, Energy Secretary and adviser to countless oil companies. In a speech to a conference sponsored by the Association for the Study of Peak Oil, Schlesinger said, "It's no longer the case that we have a few voices crying in the wilderness. The battle is over. The peakists have won." Schlesinger added that many oil company CEOs privately agree that peak oil is imminent but don't say so publicly.
One who does is Jeroen van der Veer, CEO of Royal Dutch Shell. Without using the term "peak oil," van der Veer warned in January, "After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand."
Of course, peak oil could arrive sooner than 2015; columnist George Monbiot has claimed in the Guardian that a Citibank report calculates the date at 2012. But even 2015 leaves a very short time in which to prepare, because modern societies were built on cheap, abundant oil.
"The world has never faced a problem like this," warned a 2005 study funded by George W. Bush's Energy Department. "Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary."
The United States, with its two-hour commutes, three-car families, atrophied mass transit and petroleum-based food system, is most vulnerable to an oil shock. But similar vulnerabilities exist in most industrial societies, not to mention the roaring economies of China and India, where oil consumption is rising faster even than GDP as newly middle-class consumers buy the cars they have long dreamed of.
At first glance, one might think that peak oil would help the fight against climate change. After all, less available oil should translate into less oil consumption and lower greenhouse gas emissions. But modern civilization, to borrow George W. Bush's term, is addicted to oil. If peak oil arrives before the addiction is treated, the junkie will seek even more dangerous ways to get his fix.
Indeed, this is already happening. In Canada, energy companies are mining so-called tar sands -- a mix of sand, water and heavy crude oil that can be refined into usable petroleum. But burning tar sands is about the worst thing to do if we want to avoid catastrophic climate change because the resulting petroleum has a much greater carbon footprint than conventional oil. Currently, a dozen such projects are under way; projects awaiting approval would quadruple the emissions those projects generate. One encouraging sign: in response to a lawsuit filed by Ecojustice, the top federal court in Canada has temporarily blocked a tar sands project proposed by an ExxonMobil subsidiary on climate change grounds. "This is something which will clearly apply to every single oil-sands project that comes before environmental assessment of any kind," said Sean Nixon, a lawyer for Ecojustice Canada.
More encouragement: some high-level government officials recognize the danger of peak oil and may be contemplating action. British Foreign Secretary David Miliband wants his country to consider creating "a post-oil economy." New York Governor David Paterson has spoken in detail about the imminence of peak oil and what government can do about it: invest in greater energy efficiency in the short term and new low-carbon energy sources in the medium to long term. Plug-in hybrid cars, for example, can get more than 100 miles per gallon -- double that of today's generation of hybrids. And if the plug-in hybrids rely on electricity generated by solar, wind or other green energy sources, they fight climate change and peak oil at the same time.
Finally, activists in scores of towns and cities around the world are trying to prepare their communities for the transition to a post-oil economy. Rather than wait for national governments and multinational corporations to save them, these ordinary citizens are examining how their communities can produce their own energy, food, buildings and other essentials using local resources rather than materials that arrive from afar via oil-based transport. "Economic relocalization will be one of the inevitable impacts of the end of cheap transportation fuels," argues peak oil theorist Richard Heinberg. In Britain this movement has taken the form of "transition towns," which seek, in the words of organizer Rob Hopkins, "to design a conscious pathway down from the oil peak." Drawing on the experience of his hometown of Totnes, in Devon, Hopkins has just published The Transition Handbook, which explains how other towns can also begin preparing for the post-oil future.
Some of the transition movement's ideas -- printing local currency, forming solar buying clubs, building "cob" houses made of mud -- may seem quaint, inconvenient or naíve. But nothing is more naíve than assuming that the endless oil that modern societies grew addicted to over the past fifty years will last forever. The day of reckoning appears imminent, and as Hopkins says, "it is better to plan for it than be taken by surprise."
Mark Hertsgaard is The Nation's environment correspondent, a fellow of The Nation Institute and the author of five books that have been translated into sixteen languages, including Earth Odyssey: Around the World in Search of Our Environmental Future. His next book is Living Through the Storm: Our Future Under Global Warming.
Copyright © 2008 The Nation
23 Comments so far
Show All" petsr4ever07 "
Yes, capped wells are a fact. I worked in the oil patch in Wyoming for two years on drilling rigs doing everything from worm corner to derrick hand.
It was a common practice to cap wells that tested good. The "dry hole" could be used as a tax write-off under the oil depletion allowance laws and then when prices were high the oil could be developed. And sometimes they kept the results secret to cheat a landowner out of royalties.
Nobody really knows how much of the stuff is out there. Some say Venezuela has reserves that rival Saudi Arabia. The Russians have lots and we are in Afghanistan trying to subsidize Big Oil's access to Central Asian reserves. And then there is the artic circle opening up with...irony...the melting of ice due to global warming.
Iraq has huge reserves and the multi-nationals operating there agreed way back in the 20's to limit production as to not flood the market. The secret Whitehouse energy meetings in the early Bush regime included oil executives mapping out who would get what part of Iraq's oil wealth.
There just might be more carbon (oil and coal) stored in the earth than our atmosphere could ever absorb and maintain life as we know it ?
And, "One thing I would like to know; how come they started making gas-efficient cars back in the late '80's", which is quite right as they deliberately rolled back mileage standards as there was more oil around in the 90's than they knew what to do with, thus gas hogs kept the consumption up and also Detroit made more money on the big ego vehicles.
Check out the documentary film, "Who Killed The Electric Car".
Oil wealth and power makes people absolutely crazy and corrupt not unlike the lust for gold.
If you have not seen, "There Will Be Blood" it is a fine but dark film exploring the sick state of mind of a human affected with oil madness ! Never turn your back on an oilman if he is holding bowling pin in his hand !
I have to say this; my husband and I are doing everything we can to save on energy. We live out in the country. We have two houses, a small one we used to rent out to hunters, and a large one we were living in until last fall. We couldn't afford to heat the big one anymore, so we moved next door into the small one. It was a hard decision to make, but there really was no other choice. We are converting our heat to wood with propane back-up. It's a lot of work cutting and splitting the wood, but we have to do what we have to do. And, thank God there is still alot of dead wood out here to cut.
We have two big gardens, and have been doing alot of canning. My husband is retired, but I still have to work. I have to drive 68 miles round trip. Last year I found a '91 Geo-Metro in pretty good shape, so I have been driving it to work and back. We have an old 4-wheel drive pick-up I can drive when the weather is really bad, but I only had to use it a couple of times this past winter. So, we are surviving the best way we can. I just fear what the future may bring. I feel really bad about what kind of world my grandchildren will inherit. It's pretty depressing.
So there is the possibility that there really isn't an oil shortage? That it could be a "manipulated" oil shortage? Or are the oil companies bleeding us dry, for the last remainder of oil there is? A friend of mine just told me today, that the reason the oil wells in North Dakota are capped is because they are saving that oil for the military.
Who knows exactly what to believe anymore?
One thing I would like to know; how come they started making gas-efficent cars back in the late '80's, such as the Geo-Metro which got over 40 miles to the gallon, and then in the mid-90's switched back to making bigger and less efficent vehicles such as SUV's, Hummers, and Cadillac Trucks (as if anyone needs a Cadillac truck). You would have thought that since the oil crunch in the '70's, they would have continued working on building more fuel-efficent vehicles as the years went by. Just think, by now, they could have had big vehicles that were still fuel efficent. They must have the technology. So, what happened? Did the big oil companies pay the auto manufacturers off so they wouldn't do it? That is all I can figure out must have happened.
And one other thing; I live in North Dakota. There are lots of oil wells in western North Dakota, and Montana. I just read that they have discovered lots more oil out here very recently. At least that's what they say. I also know that most of the oil wells out here have been capped. And, there is only one refinery in North Dakota. I wonder why is that? And who owns them? And why isn't the oil being used? I sent a letter, yesterday, to North Dakota Senator Dorgan asking for an explanation. I hope I get some kind of an answer.
Does anybody have any thoughts on this?
Just as reference as to what impact the declining dollar is having on Oil prices versus, the supply demand scenario of peak oil.
In 8 years time.
A barrel of Oil went from 42.41 Euros to 73.75 Euros an increase of 74 percent.
A barrel of Oil went from 35.00 USD to 118.00 USD an increase of 237 percent.
I HAVE ONE QUESTION:
50% of the cost of gas is profit to the oil companies. What the hell does a 50% profit off a product have to do with peak oil? The price of oil has nothing to do with running out of the stuff.
SORRY ONE OTHER QUESTION:
Has anyone of you ever driven up to a gas station and the tanks were dry for days on end? Where is the shrotage as world demand is going up?
at 3 trillion for Iraq and counting that is = to 120 million Toyota hybrid cars at 25 G each that would save more oil than is in Iraq.
Trouble is it isn't the cost of war it is the control so other countries don't get it.
JConrad: You may be right about the impact of the declining dollar on the price of oil, but that shouldn't blind one to the fact that peak oil is close if not already behind us. I don't have the figures in front of me, but they're reported in Kevin Phillips latest book, Bad Money. Phillips says the rate of discovered oil reserves was about equal to our use, say, 15 years ago. Today, discovery is about one-fifth of use, worldwide. (I'm citing from an aging memory that was nothing to boast about, even in its prime, but I think my figures are close.) We may not be screwed yet, but the day is arriving.
" The bigger question ought to be is: What is the world doing to begin a transition to a post-oil/post-industrial way of living ? "
Very true !
With the three $TRILLION that has been wasted on the Iraq war crimes we could have created an electric car and solar infrastructure and be well on our way to emission free transportation.
The corrupt political power connections between the MIC and Big Oil are literally bankrupting the nation while attempting to acquire a polluting energy source.
The 100 year insane McCain plan will consume about $60 trillion to acquire about $10 trillion in oil revenues for American corporations. This is not only criminal, but it is bad business.
The plutocratic fascist oligarchs who run this country are heavily invested in the MIC and Big Oil and see oil in the same way that the imperial aristocrats of Spain saw gold as the source of their "wealth".
These oil war schemes are incredibly sick and counter-productive, but "they" are making money while waging energy wars and making money on the oil they steal or control. Palast is worth the read on the idea of limiting production rather than creating "cheap oil" with war.
Unfortunately the Spanish obsession with one commodity resulted in the fall of thier empire.
The oil industry knew it was getting tight before 2000, that is why they backed GWB. He would get them higher prices for every barrel of oil and that is what they wanted. Then you can always blame it on the Arabs.
85% of the proven oil reserves are in the hands of national oil companies. Ever since the world oil companies got kicked out of the middle east in the 70s, they have been trying to find a way to make more money. OPEC was the best thing to happen to the world oil companies. They got higher prices for their oil and you could blame it on OPEC.
OK, they do exploration to find oil right? How do they know how much oil is there if they have not found it yet? If they know then shouldn't it be adjusted, electric car etc to make it last longer?
PEAK OIL IS A SCAM to offset more fuel efficent cars so profits stay high.
If the US economy crashes less gas will be sold so the US goes out of its way to keep the price high. Gulf of Tonka attacks, shortage in the US inventory every day the newspapers report a shortage and it is US that causes it.
It's interesting and instructive to debate the reasons for the "oil crisis". Cheney is, for certain, one of the prime movers behind the emergence of the crisis and the permanently militarized US. But, he's not alone. For decades now, the US as a society has felt some sort of entitlement to consume 25% of the world's resources while comprising only 5% of the population. The US military is the largest consumer of oil. Seems like the chickens are flying home to roost. We seem to have made ourselves a very uncomfortable bed to lie in.
The bigger question ought to be is: What is the world doing to begin a transition to a post-oil/post-industrial way of living? There are some interesting examples, but nothing on the scale necessary to ensure the survival of even a small remnant of humankind once the oil is gone...and it will be. We can pretty much agree that governments can't be relied on to rise above and beyond their corporate slavery to do anything meaningful, although there are a scant few examples of this happening.
The Coming of Deindustrial Society, an article by John Michael Greer from www.oilcrisis.com provides an interesting and sobering history, as well as some things that need to be done NOW!
JConrad April 25th, 2008 11:36 am had an interesting post, but I think he underestimates the seriousness of Peak Oil.
This misleading statement fails to recognize the simple fact that the decline of the dollar is a bigger factor in the current price of oil than the actual supply of oil.
$20/barrel oil to $120/barrel in 7 years is not due to the dollar falling that abruptly. True, many countries would rather trade oil in Euro's these days, but Saudi Arabia has an agreement with the U.S. to always use dollars, which they will not break until China is more powerful than the U.S. Iran and Venezuela are another case, of course, but they will not be able to persuade all of OPEC. And even the most naive, optimistic oil trader that talks of 'huge new projects coming online in 2010', while ignoring annual decline in existing mega-fields, notices the demand growth of China, India and the Middle East, and the tight 'spare capacity'. The 'supply' of oil is very much on the Market's mind.
Presently U.S. consumption is down yet prices continue to rise violating the so-called laws of "free market" economics.
First, falling U.S. consumption is more than compensated by growing consumption in China and other countries. The U.S. is a fading power. Second, consumption of Van Gogh paintings is down, but prices are sky high. It's supply and demand, not 'consumption levels' that is important.
And there is are also the effects of market speculaion by oil traders reacting to the instablity created by American aggression.
I keep hearing about 'market speculation' as though that was unfairly driving prices up. Ummm, aren't people buying stocks 'speculating' that the price will go up ? Isn't that *exactly* what a market is supposed to do, value some commodity based on what everybody thinks it is worth given all the available information ? Maybe since Russia has peaked in its oil production, Saudi Arabia hides its data, and Mexico has peaked, these 'speculators' see the writing on the wall. Of course, bombing the hell out of Iraq cut current global production too, and threatening Iran does add 'instability' to expected flows of oil. But don't discount the underlying facts: oil production is very close to peaking, and global oil demand shows no signs of decreasing.
Thanks, blobber. Yes, it is "SO" obviously cheney's evil ass pulling all of these strings. The hideous monster behind the curtain is exposed. What a hell-spawn.
The chief US politician who began steering us toward our current disasterous policy re oil and the middle east was not Carter, but Dick - behind the scenes - Cheney. It began in 1973 after he witnessed, from his vantage point inside the Nixon Whitehouse, how easily OPEC hogtied us with just a 10% reduction in oil exports. He was inside the Ford administration, then congress, then inside the Bush 1 administration, then Halliburton, and now he runs the Bush 2 administration. ANY talk of our energy policy/paranoia has to include Dick as the main guy. Iran will be the next oil country - reserves greater then production - that we attack. Dick's brain on oil, it's that simple, and horrible. Until we have a counter balance to his control as the hidden head of the military/oil complex; we continue down this horrific dead end path to certain national and global destruction. Have a nice day...
Oil has peaked - the actual, specific year of said peaking is not relevant anymore, as if a year or two here or there matters...
"Almost" is the one word that seems to keep "us" pacified. Almost a recession, almost peak oil, almost a world food crisis, almost almost almost...
The Pentagon has been warning - and preparing - for over a decade now: violent worldwide chaos trigged by a perfect storm of catastrophic climate mutations, rapidly dwindling energy supplies and an unprecedented food crisis.
Why do you think our police have been re-armed to the military teeth?
COOPERATION KEY TO ENERGY CRISIS
This conversation needs to include looking at China and deciding if our children face a future partnering or competing in the post-car world.
CHECK OUT www.fcnl.org/china
Why Go To China?
4/10/2008
By Joe Volk, Executive Secretary FCNL
In mid-April, I will travel to China for two weeks of exchange of views on U.S.-China relations. With Iraq still in flames, with U.S.-sponsored torture continuing, with both major political parties calling for yet more military buildups, why go to China?
Senator Richard Lugar (IN), one of our elder statesmen, has repeatedly warned that the United States must focus more attention on how rising demand for energy, both inside the United States and internationally, is accelerating climate change and shortages of hydrocarbon supplies that could become sources of conflict.
High on Lugar's agenda is U.S. relations with China. While Congress and the public focus on Iraq, Iran, and the ongoing wars in the Middle East, we at FCNL share Lugar's concern that growing competition with China for fossil fuels may create conditions for new, big power conflicts in the decades to come. Our country's shortsighted view of policy could deliver our grandchildren into a new East-West conflict. They don't need another Cold War.
I recently had a chance to talk with Michael Klare, the author of Resource Wars, who spoke at FCNL's Annual Meeting in 2004. Michael's new book, Rising Powers, Shrinking Planet, takes a close look at our energy competition with China. "Both of our societies will perish by the car or survive by getting beyond the car," Michael told me. "If we cling to the car in our society, and China copies our auto culture, we will have to compete for oil." The conclusion of Michael's new book is that the United States can work with China on a post-car economy or compete with China for resources in Africa, the Middle East, and Central Asia.
The Pentagon, in its most recent report on China's military, suggested that China has been developing its military for several purposes, including for use in the event of conflicts over energy resources. Many good people in Congress, the administration, and Washington policy-elite circles are calling for more cooperation with China. Cooperation works. China played a key role in the Six Party Talks and worked with the United States to reach a deal with North Korea to stop its nuclear weapons program. Yet, as is the case with U.S. relations toward other countries, there are other narratives to this story.
The United States, while acknowledging that China is an important trading partner, is wary of losing its number-one position in the global economic order. China, meanwhile, is suspicious of steps the United States has taken, including selling weapons to Taiwan and working with China's neighbors to keep the emerging power in check.
War Is Not the Answer
FCNL began its "War Is Not the Answer" campaign in 2001, not only to oppose the immediate threat of a military response to 9/11, but also to identify and address foreign policy issues that could lead to conflict in the long term. In the coming months and years, China will increasingly become the focus of U.S. foreign, economic, and energy policy, and while the U.S. and China work together on many issues of global concern, mistrust and points of disagreement also trouble the U.S.-China relationship.
I've heard experts remark that possibly the most important and defining relationship of the twenty-first century will be the U.S.-China relationship. In light of the growing importance of China in U.S. foreign relations, the FCNL staff have decided to send me to Beijing, Xian, Yunan, and Shanghai during the last two weeks of April. The trip is being organized by the American Friends Service Committee, which has staff based in China. Our host will be the Chinese People's Association for Peace and Disarmament. We hope our discussions will help us build understanding, and we believe that improved understanding could help us bridge this emerging trans-Pacific divide.
We at FCNL believe that consistent, open diplomatic engagement with China is key to the interests and safety of our global community, because without a solid framework of mutual understanding and communication, the increasing economic competition between the United States and China, as well as disagreements over foreign policy and energy interests, could lead to hostile relations and even military conflict. Both countries are military powerhouses, and both possess nuclear weapons. A potentially violent conflict between the United States and China would be an enormous threat to global security.
As the international community works to address global climate change, the United States and China stand as the two nations that can do the most to reduce the world's dependence on fossil fuels and pave the way for a conversion to renewable energy and green industry.
Much has changed since my last trip to China in the mid-1980s, and I am looking forward to gaining a better understanding of Chinese history and culture, as well as of current Chinese attitudes toward the United States and our government's foreign policy. I see my trip as an opportunity to learn about the Chinese perspective on economic relations with the United States, energy resource competition and green energy, the relationship between the United States and Taiwan, China's poor human rights record regarding Tibet, and a range of other issues of mutual concern.
We at FCNL do not consider China the enemy, but we recognize that current relations between our two countries could create opportunities for those who do to drum up popular support for anti-Chinese policies. I hope that, by traveling to China as an FCNL representative this month, I can do my part to promote a culture of tolerance and understanding that will prevent a reliance on military solutions, while promoting freedom, human dignity, and environmentally sustainable economies.
Reviewed: 4/14/2008
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Great article by Mark Hertsgaard, and good comments by JConrad and sipsey. Indeed, American military misadventures and their economic collateral damage are to blame for much of what is happening today. But such statements risk missing a key point.
Why is America so deeply involved in the Middle East to begin with? The answer is that the US reached and passed its peak of oil production in the early 1970s. If we still had lots of oil here, the Middle East would not feature so prominently in our foreign and military policies.
But because our oil consumption has risen in the past 35 years despite our domestic production peak, we've been forced (by our myopia) to resort to military aggression to maintain access to foreign petroleum. Jimmy Carter--yes, the sweater-wearing energy conservationist--was the first president to explicitly state this in the so-called Carter Doctrine: the US will use whatever means necessary to keep Mideast oil flowing to our shores.
The current President Bush is simply carrying on the Carter Doctrine, in an America that (pardon my repetition) is long past its oil peak. Thus, in a very crucial sense peak oil has EVERYTHING to do with the whole package of calamities we're seeing today: high crude prices, rampant speculation, a plunging dollar, skyrocketing food prices, etc. Put another way, our peak oil story already began in the early 70s, with today's events being a continuation, not the arrival of a new phenomenon.
The "only" difference now is that peak is arriving on a global scale, as shown by mounting evidence. No one will any longer be able to mask their domestic post-peak oil shortfalls with relatively cheap imports. So even if the war in Iraq magically ended tomorrow and market speculators were immediately brought to heel, it would only slightly and temporarily slow down the inevitable decline already underway.
Buy a bike.
Good comment sipsey.
I think what you express is a distinct possiblity.
@ JConrad: It is my belief that we went to war in Iraq to prevent Saddam from switching his oil trade from dollars to euros. Same with the Iranians: they threatened to start trading oil in euros and the sabers immediately began to rattle.
Once oil begins to trade in other currencies, the dollar will be in freefall.
Will Peak Oil be strictly a geological event, or will it be partially a political event? In other words, will Saudi Arabia and other petro powers keep pumping as fast as they can for as long as they can? Or will they decide, as Saudi Arabia appears to have last week, to control the events rather than have the events control them?
Recently, the US and EU asked Saudi to increase output by X amount. Saudi agreed to increase by .5x or so. So, the Peak may ultimately be created by policy rather than geology. And who can blame them? It is, after all, their natural resources.
Meahwhile, the giant blundering idiot that is BushCo is thrashing around in the Persian Gulf, firing at Iranian boats, and with every round fired the price of oil jumps a few cents.
No doubt there is a finite supply of oil within the earth and it is time to explore alternatives.
However, " The arrival of $119-a-barrel crude and $4-a-gallon gasoline this spring are but the most obvious signs that global oil production has or soon will peak. "
This misleading statement fails to recognize the simple fact that the decline of the dollar is a bigger factor in the current price of oil than the actual supply of oil.
Presently U.S. consumption is down yet prices continue to rise violating the so-called laws of "free market" economics.
Prior to the invasion of Iraq it was $.80 to the Euro and now it is around $1.57 to the Euro. And since the dollar is the main reserve currency used to trade oil, the price of the oil has been adjusted according to the value of the dollar.
The most significant factor in the decline of the dollar since 2003 has been the multiple effects of the invasion and occupation of Iraq.
The occupation has also cut down on Iraq's production. Thus, the MIC and Big Oil are realizing record profits while most consumers are faced with energy/currency inflation while living on fixed incomes.
And there is are also the effects of market speculaion by oil traders reacting to the instablity created by American aggression.
And now we are beginning to feel the ripple effects of consumers who cannot participate in a depressed economy which will further the effects of Washington's corporate war crime inflation.
Like lemmings going over the cliff together, the pundits publishing "peak oil" opinions almost never mention the political (or perhaps criminal) reasons why oil has reached record prices. Essentially the energy and war schemes comprise a deadly transfer of wealth from the many to the few.
Etc.
The price of oil was down in the 90s. North Sea and North Slope were going great guns and Saudi Arabia flooded the market to put some "discipline" back into OPEC.
The profit margins for large SUVs was huge. Even though Clinton and Gore did the PNGV program that developed hybrids that got 70 mpg, the car makers went for the high profits and their share holders went right along. Another example that what is good for business (in the short run) is not necessarily good for the country (in the long run).