Peak Oil: The Crisis No One Is Talking About

The conversion of energy, from forms that aren’t useable to forms that are, is the basis of the survival of any living thing. Any creature, when given an abundance of energy to consume, will either find balance between their numbers and the source of energy, or will multiply until that resource is gone and have balance imposed upon them through death. What makes humans special is that technology and social complexity has divorced us from the harvesting of the energy that underpins our way of life.

Until the industrial revolution we were reliant on the Sun, and the food that it can grow, for our survival. That food gave us the energy to live, to gather the materials necessary for our comfort and fed the animals that we used for heavy labour and transport. Since the discovery of coal, and later oil we have become ever more dependent on unnatural sources of energy to power every aspect of our lives. Oil, a dense soup of energy, has been converted into some 140 billion tonnes of human biomass and allowed us to conquer the entire planet.

Oil is the source of the energy that runs the world. You burn oil to get electricity, to give you warmth and light. You burn it to travel in your car, on planes, ships and trains. You make plastics from it. It is the feedstock of most industrial fertilisers and pesticides. Oil is the backbone of the pharmaceutical industry. Oil allows food and goods to be shipped around the world. Oil is even used to drive machinery to get more oil. In short it is an integral component of every aspect of modern society.

While human innovation has allowed us to use oil as a novel source of energy, and made us an exception in nature, it does not free us from the binding laws of physics. We cannot use more energy than we gather. Neither a single being nor a species as a whole can survive without the energy to sustain it. Energy from fossil fuels can never be replaced once it is burnt, and unlike energy from the Sun it does not flow in an endless stream.

Yet we consume this precious resource as if it were infinitely renewable. Our demand for oil rises, with a few exceptions, each and every year. We are estimated to have burnt 900 billion barrels of oil, most of that in the last half century. It is estimated that we have another 1000 or so billion barrels remaining. The world is consuming oil at a rate of about 30 billion barrels of oil a year, it is well within the realms of possibility that we have less than 50 years of oil to burn.

Oil production will not simply end overnight. The bell curve above describes the lifetime of any oil well and the oil output of the world as a whole. Extraction at first is easy, oil in the Americas was literally flowing from the ground when it was first discovered. But once you pass the mid-way point anything further becomes more difficult to extract, production drops, and eventually dies. Near all the oil fields in the world have passed this critical peak and are in decline, only the Middle East has any spare capacity, and even that is limited. Running out of oil completely will be catastrophic, but just reaching the tipping point where demand outstrips supply has terrifying implications.

It is simple economics that when a resource becomes more scarce its price goes up. With oil this axiom is doubly true. Although we may have many billions of barrels of hydrocarbons remaining, most of it is the dregs that we haven’t already seen fit to exploit. Tar sands, heavy oil, deep sea oil and natural gas from fracking are all far more expensive to extract and refine.

Historically when oil prices have gone up a recession has quickly followedas the cogs of industry stop turning. Dropping demand, alongside production going up brings the price back down again and sets the world in motion again. But within the next decade, production will simply not be able to go any higher, then will collapse. When peak oil hits, oil prices will go through the roof, and unlike in the past, they will never come down again. Oil is a finite resource. It will run out, and that is an undeniable fact.

Peak oil deniers will have you believe that more technology and the markets will solve the impending crisis. That, as the price of oil goes up the incentive for finding and extracting more will rise correspondingly. So we can extract ever more remote pockets of energy, from the open sea, from deep rock formations and from under the melting Arctic ice sheets. This may be true, but we have been scouring the globe for oil for the last century, we know enough about how oil forms to know where the largest fields are and we’ve tapped them already. New discoveries will be what keeps the end of our oil bell curve a slope rather than a cliff. Discovery can’t change the fact that the age of abundant, cheap oil is over.

The question remaining is when it will happen. Some have said the peak happened in 1998, others say we’ve got until 2030. The International Energy Agency says the peak will occur in 2020, but their chief economist Fatih Birol has said 2006. Accurate prediction is impossible as most oil reserves are held as state secrets, but a consensus falls between 2010 and 2020. The precise timing is perhaps irrelevant, by most accounts we are already too late. We might need 20 years before the peak to prepare for the transition to a more sustainable energy architecture. Renewable sources of energy are still in their infancy, their energy return to energy invested ratio is far less than that of oil, and it does not solve the fact that we need oil to make things not just to burn.

World governments seem unwilling to even discuss the possibility of peak oil, or at least publicly. However if you look at world events through the lens of peak oil, then you will see some interesting correlations. Afghanistan was critical for oil pipelinesfrom the Caspian basin to the coast. Iraq has one of the largest oil supplies in the world and most importantly had the capacity for more production. Iran has a similarly impressive oil supply. As does Libya. The UK’s cosy relationship with the Saudi Arabian regime, who are estimated to possess 20% of the entire worlds supply of oil, also seems to make more sense. Governments may not want to try and resolve the underlying energy imbalance, but they certainly want to be holding all the cards when the crash finally does come.

And come it will. Whether we’re ready for it or not. Peak oil is the defining crisis of the century. Human innovation has let us expand unchecked for thousands of years, but the dream of infinite growth is coming to an end. It is possible to weather the coming storm, but it will be in no way easy. If we leave the problem entirely untended and we seriously risk the total collapse of civilisation. We will quite literally not have the energy to rebuild society on firmer foundations and ensure our own survival.

11 Comments on "Peak Oil: The Crisis No One Is Talking About"

jaime on Mon, 30th Jan 2012 11:49 pm 



don’t lament.it will happen.

Rick on Tue, 31st Jan 2012 12:40 am 



Global Peak Oil has already happened, circa 2005.

MrEnergyCzar on Tue, 31st Jan 2012 1:14 am 



2005/2006. People confuse the peaking of cheap oil that built our world with unconventional tar sands/heavy oil, fracking etc…

MrEnergyCzar

BillT on Tue, 31st Jan 2012 1:49 am 



As I mentioned in another post, we will soon be looking at the asphalt paving in front of our homes as a source of oil. After all, it is just a few notches under the goop coming out of the tar sands in Canada.

A million miles of standard 2 lane road would equal maybe 6 billion barrels of crude oil. 4 million miles in the US = 24 billion barrels total. Now, that is enough to power the US for 4 years!

I’m just joking…but maybe? After all, the numbers above are real.

Wheeldog on Tue, 31st Jan 2012 1:59 am 



The logic behind peak oil seems undeniable. Only those who believe in the magic of abiotic oil deny the inevitability of an eventual peaking of production. Only the date is in question. As the author states, the exact date is irrelevant. Even before the precise peak the oil dependent economy and, inevitably civilization itself, will begin to show signs of systemic instability. Look around. It is now in process.

Alan Cecil on Tue, 31st Jan 2012 2:33 am 



“Oil, a dense soup of energy, has been converted into some 140 billion tonnes of human biomass and allowed us to conquer the entire planet.”

Um…so that means we each weigh 40,000 lbs. apiece? Time to exercise…

eastbay on Tue, 31st Jan 2012 4:53 am 



2005. It’s a year that’s no longer debatable.

DC on Tue, 31st Jan 2012 6:10 am 



Course no one wants to talk about. TPTB prefer to convince people this is a simple matter of ecomnomics. You know, were not doing our duty and *consumeing*poorly made amerikan cars, and shoddily buily leaky ‘homes’ financed through the fraudulent FIRE economy, so we can buy our way back to ‘growth’. If we would stop being so stubborn, everything would go back to ‘normal’ again.

Well thats the story anyhow they like to tell. The real story of declineing ERORI, over-population and out of control industrial pollution are not what the elites want us to think about, much less consider. Recessions can end, at least on paper, but permanent declines in cheap high quality resources are harder to paper over. Easier to just pretend the ‘problem’ is purely an economic one and that implies at some point, it will magically ‘correct’ itself. Exspensive energy, and thus, expensive everything however, is proving impossible to ignore isnt it..

BillT on Tue, 31st Jan 2012 3:02 pm 



The ‘elite’ recognize that the end is coming to their ability to plunder the world’s natural resource. Mother Nature cannot be bought off or intimidated. They cannot buy more real oil. They cannot control population growth. For instance, the ‘war on terror’ kills thousands of Muslims every year. The newspapers blare how we are winning because 3 terrorists were killed today by our $5 million dollar drone flying illegally over a sovereign country.

FYI:(This is an example and I am using the West’s favorite scapegoats.)

There are about 1.4 billion Muslims in the world today.

Their numbers are increasing at about 4% per year.

That equates to about:
44 new Muslims every SECOND!
2,640 every Minute!
158,400 every Hour!
3,800,000 every Day!

Even if you use all of the numbers that are presented for total Muslims killed over the last 11 years in ‘wars’, say 1,000,000 in round numbers. That is six and one-half hours of their growth rate.

This is typical of ALL of the Empire’s scapegoat killings ever. Now then, how long before there are no Muslim ‘terrorists’ left? Does anyone see any problems with the Empires plans to ‘rid the world of terrorists’?

Kenjamkov on Tue, 31st Jan 2012 8:35 pm 



“FYI:(This is an example and I am using the West’s favorite scapegoats.)

There are about 1.4 billion Muslims in the world today.

Their numbers are increasing at about 4% per year.

That equates to about:
44 new Muslims every SECOND! (1.7)
2,640 every Minute! (106)
158,400 every Hour! (6392)
3,800,000 every Day! (153,424)”

56 million a year not 1.4 billion from the information you got. Are you using a mainstream media outlet for your numbers BillT?

Still, your point is valid. 🙂

BillT on Wed, 1st Feb 2012 4:15 am 



The data site were from several sources, mostly government. Total Muslims somewhere around 1.4 billion. Increase somewhere around 3-4% per year. I used the high numbers to stress my point, and I made a math error…( should not try to use a handheld calculator when I am tired.) … but even 56 million a year proves that we are losing the game.