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Peak oil is real and will stunt any economic recovery


As the bio on his Deep Green blog offers:

Rex Weyler was a director of the original Greenpeace Foundation, the editor of the organisation’s first newsletter, and a co-founder of Greenpeace International in 1979.
He was a photographer and reporter on the early Greenpeace whale and seal campaigns, and has written one of the best and most comprehensive histories of the organisation, Greenpeace (Raincoast, 2004). His book, Blood of the Land, a history of the American Indian Movement, was nominated for a Pulitzer Prize.

Recently, Rex offered a terrific, informative, and to-the-point essay on the reality of Peak Oil. Given his reputation and stature in the environmental field, this work adds more than a bit of credibility and weight to important messages I and fellow Peak Oil proponents are trying to share. More information and education about what we face can only help.

I’m delighted to offer Rex’s recent articlePeak oil is real and will stunt any economic recovery.” It’s a great read and I want to thank Rex for giving me permission to share it. Enjoy!

15 March 2012

During the last century, society squandered 500 million years of captured sunlight on drag races, traffic jams, private jets and overheated office buildings – warns campaign group

Oil company cheerleaders proclaiming huge supplies of oil are dead wrong. Peak oil is as real as rain, and it is here now. Not 2050. Not 2020. Now. Oil production has been flat since 2005. This is not by choice. The producers cannot increase production because new fields cannot keep pace with declining production from old fields. The plateau is the top of the global depletion curve. Furthermore, this end of energy growth only accounts for volume. Energy quality and net-energy are falling like stones as environmental devastation increases. Every producing oil field on earth is in decline, unless it is brand new, and peak discoveries are well behind us. Meanwhile, the aggregate decline rate appears to be about 5 per cent per year. To maintain world production, we would need to bring a new Saudi Arabia – equivalent to three billion barrels annually – into full production every three years. There exists on earth not one single promising field that remotely approaches those requirements.

oil production
(The oil plateau: The calm before the decline. Reference: The Oil Drum.)

When you read or hear about “10 billion barrels” of oil discovered somewhere, here is how to think about that – a third of that is probably not recoverable or entirely illusory. The recoverable portion will require a billion barrels of oil equivalent energy to produce; in the tar sands it would take three billion barrels. What is left, about five or six billion barrels, equates to about a two-month supply for humanity. Two months. We will not “run out of oil” because, simply, we will never get it all. What petroleum geologists point out is that all oil fields have a production curve, a peak and a decline. Therefore, the earth’s total supply has a peak and decline.

But that is not all, the volume decline includes a decline in quality and net energy. As oil fields reach old age, energy returned on energy invested plummets and production costs soar for a lower quality product. Over the last century, oil producers have high-graded earth’s energy storehouse, and the best net-energy reserves disappeared 70 years ago. Oil in its heyday – the 1930 and 1940s – produced 100:1 net-energy, a hundred barrels out for one barrel of energy invested. Today, oil fields range from 20:1 to 10:1. The United States average is 11:1. We are now digging into the 3:1 net-energy tar sands. Energy expert Howard Odum warned of the net energy curve in the 1970s and geologist Marion King Hubbert graphed the oil decline in the 1950s.

oil discovery and production
(Peak discoveries occurred 50 years ago. Reference: Exxon Mobile, from The Oil Drum.)

United States oil production peaked in 1970, exactly as Hubbert predicted. In this era, the US spent millions to topple governments in oil nations and install US-friendly dictators such as Shah Pahlavi in Iran. Lately, America has spent billions to fight its own creations – Saddam Hussein, the Taliban – to gain access to the oil fields. They now contemplate opening a front in Syria to go after Iranian oil, for which they lost control when the Iranians toppled their puppet Shah.

In 2010, the US Military Joint Forces Command predicted the end of “surplus oil production capacity” – their way of saying “peak oil” – and warned “the shortfall in output could reach nearly 10-million barrels per day”. They also predicted that this oil decline “would reduce the prospects for growth in both the developing and developed worlds” and “such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and have serious economic impact on China and India”. This is the US military talking. When politicians tell you the next war is “not about the oil” – rest assured it is about the oil.

In 1912, as the British navy switched from coal to oil Winston Churchill said flatly: “You have got to find the oil – purchased regularly and cheaply in peace, and with absolute certainty in war.” In the end, the Second World War was about oil and won by oil. During the war, the US produced 880 million tons of oil, Russia 100 million tons, Japan five million tons, and Germany 30 million tons; and most of this by expensive coal-to-liquid technology. Germany entered North Africa to secure oil and entered Russia to reach the Caspian Baku oil fields. German minister for war production Albert Speer conceded in his post war interrogation: “The need for oil certainly was a prime motive.” They failed, and the German war machine literally ran out of gas – as Rommel abandoned his empty, fuel-gobbling tanks in the Libyan Desert. Prior to the 1990 Gulf War, US Defence Secretary Dick Cheney revealed: “We’re there because the fact of the matter is that part of the world controls the world supply of oil, and whoever controls the supply of oil would have a stranglehold on the world economy.” So there you have it. All this bloodshed is over dwindling oil reserves and the pipelines to deliver the black goop to refineries and markets.

Charles Hall, at the State University of New York, has calculated that it is not possible to run our complex civilisation on a net-energy below about 6:1 – because society needs that reserve energy to run its transportation, agriculture, health systems and so forth. The tar sands 3:1 net energy is simply pathetic. A salmon does better chasing herring. An Amish farmer gets 10:1 net energy with hand tools. I suspect most of the industry cheerleaders talking about “giant discoveries” and “energy gluts” know this. Still, they spin every new oil discovery as an arrival in the Promised Land, pump stock plays and promote their industry. In our world, that is legal. But it is not really honest. In April 2011, chief economist of the International Energy Agency Fatih Birol revealed what the industry knows: “We think that the crude oil production has already peaked, in 2006.”

And since the population is growing, peak oil per capita occurred in 1979. We have now reached the absolute peak. Without increasing energy sources, we cannot increase economic activity. We can print money and harvest the earth’s assets and make it look like growth – for a while – but the piper will be paid. Nature shall not be mocked. In 2008, when the economy appeared to be roaring and traders pitched mortgage-backed securities on unsuspecting clients, energy production had ceased growing. As a result, the oil price almost tripled from $50 per barrel to $147. This equated to a $3 trillion increase to the world’s annual energy bill, which sucked discretionary income from every other market and helped crash the global economy.

When the economy collapsed, oil prices fell. But as economies recover even slightly, the price will rise again since supply is restrained. Blaming the US President Barack Obama for rising energy prices is another con job. Blame nature. She just cannot make more of the stuff fast enough. During the last century, society burned the best half of recoverable hydrocarbons that represented 500 million years of captured sunlight; a one-time storehouse of high quality, concentrated energy. We squandered it on drag races, traffic jams, private jets and overheated office buildings. We burned this valuable asset and called it “income.” If you did that in your home, you would go bankrupt. Peak oil is real. The consequences – at best – will be a slowly scaled-down industrial civilisation. If we continue to ignore these facts, the consequences will be far worse. Nature just is not sentimental.

Rex Weyler is an executive member of the Vancouver Peak Oil campaign group

 Peak Oil Matters

4 Comments on "Peak oil is real and will stunt any economic recovery"

  1. Joseph Brennan on Wed, 28th Mar 2012 12:09 am 

    It’s hard to disagree, except to say that any recoverable oil will be recovered and will be “economical” to recover as long as there is even a 1:1 ratio — petroleum is just that valuable as a transport fuel and lubricant.

  2. James A. Hellams on Wed, 28th Mar 2012 12:17 am 

    The author of this article is being very conservative about the replacement rate to keep up with consumption.

    The author states that we would need to find and produce 3 billion barrels of oil annually to keep up with current consumption. The worldwide consumption of oil is 30 to 32 billion barrels annually. Just to keep up with the consumption, we would need to add and produce 30 to 32 billion barrels of new oil discoveries every year. There is NO WAY that this will ever happen!

  3. Windmills on Wed, 28th Mar 2012 1:15 am 

    Well said. Concise.

  4. pete on Wed, 28th Mar 2012 5:24 am 

    My pennies just rolled under the desk, but you know im good for them. look beyond what the man is saying, the lies are never going to end. your TV, radio, paper or politician. Read those last three paragraphs out loud, no very loudly, to yourself and all around you. then talk or think, out loud, about what you said for 1 hour. then repeat the process over again 2 more times. you will feel depressed and maybe embarrassed but you have taken the fist strike at the curtain of deceit. THINK FOR YOURSELF, read or listen to what others say, but use common sense and THINK FOR YOURSELF. After you see the truth, which some of you are, then think what can I do to protect my family. The window could close very sudden soon, so a hint, look up “prepper”

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