Peak Oil is You

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Page added on November 27, 2010

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Peak oil: threat or fantasy?


The city is empty.

Vast skyscrapers and office buildings sit idle and unoccupied, workers finding no reason to be there since they lost their jobs. Cars are abandoned on the street, withering and rusting away with the passing of the seasons.

The sole remaining residents are gaunt, zombie-like figures, bodies ravaged by hunger, unable to transport themselves elsewhere because they can’t afford to fuel the cars that would drive them away. Like in a George Romero film, they wander aimlessly, desperate for the last scraps of food that will allow them to carry on a fruitless, myopic existence.

This is, we’re told, similar to the future that awaits us after Peak Oil, the point at which oil extraction reaches its maximum level and then begins to decline. High oil prices are to follow and rise exponentially, bringing economic devastation because the resource has a hand in almost everything we buy.

It’s a frightening prospect – but is it true?

It is to the Squamish-Lillooet Regional District – or rather, they might not know whether it’s true. They just want to be prepared in case it is.

The SLRD, a body that provides regional governance to areas adjacent to Squamish, Whistler, Pemberton and Lillooet, is preparing for the prospect of Peak Oil through the Energy Resilience Task Force, a citizen advisory body comprised of people representing a variety of sectors and communities within the region.

There are 20 members, excluding a chair and two facilitators. They represent sectors such as urban planning; agriculture; education; transportation and social services. Nine members, including the chair and a facilitator, reside in Whistler; four, including the other facilitator, are from Pemberton; three are from Squamish; one from Lillooet; and two others reside in the Electoral Areas.

Their mission is to investigate issues related to Peak Oil and how it could potentially impact the SLRD. The precise cost of the endeavour hasn’t been determined yet but the regional district has paid the Whistler Centre for Sustainability $10,000 to facilitate Task Force meetings, assist the SLRD in summarizing its findings and coordinate public meetings around those findings.

One of those meetings was held in Whistler last Thursday at Myrtle Philip Community School. In attendance were Whistler Mayor Ken Melamed; Task Force Members Arthur DeJong and Jeanette Nadon; and various other community members interested in the threat that Peak Oil might pose to the economy.

Task Force Chair Kim Needham, a strategy planner on contract with the SLRD, explained Peak Oil this way:

“When you look at the energy of the world, production, it’s a bell curve,” she told an audience a dozen strong. “They’re sort of like mountains on top. Some drop off like a shark’s tooth, but essentially there’s a production curve that rises up, and then there’s decline.”

Peak Oil, she says, means that the era of easy oil is over; that there are no more “Texas gushers” to turn to and humanity must now depend on non-conventional sources, like Alberta’s oil sands – or “tar sands” as Needham calls them.

The focus of the Task Force, Needham says, isn’t to debate whether Peak Oil is a real phenomenon. Rather, it’s an accepted fact that it’s a threat and may already have happened.

Needham certainly believes it already happened – in 2008, to be precise, when the price of crude oil jumped to over $140 a barrel, then crashed to below $40 as the recession hit. The jump in oil prices has been blamed largely on over consumption but financial speculation in commodity markets has also been fingered as a culprit.

Confronted with this at the meeting, and the fact there’s only been two years in which to determine whether Peak Oil happened, she agreed that speculation played a role but so too did declines in production.

“There definitely was the speculation issue,” Needham says. “But when you just look at production curves, especially depletion curves, Canterell in Mexico was the third largest oil field in the world. They’re declining at like 14 per cent a year. Overall we’re declining at 6.7 per cent. Declines are happening, they’re greater than what people even expected.”

Peak Oil rests on a central idea – that oil prices will keep rising as production continues to decline. As prices rise, lower income earners will find themselves shoved out of the economy, unable to afford products in which oil plays a role. Such a trend, Peak Oil enthusiasts say, could lead to a major economic crash.

It’s a theory that’s met with a lot of skepticism by Mark Jaccard, an environmental economist at Simon Fraser University. He isn’t alarmed by Peak Oil because the theory relies on the idea that prices will just keep going up.

“It is unlikely because it assumes that economies have no feedback effects,” he said in an e-mail from Budapest. “Yet there is a huge amount of evidence that they do. Rising prices trigger increased search for oil and new search technologies like horizontal drilling, development of competing fossil fuels, developing of alternatives to fossil fuels. Rising prices also trigger conservation.”

Needham’s response?

“He’s also an economist,” she said. “What I’ve seen with a lot of economists is that they really do think there’s going to be a substitution, that there’s going to be other options.”

Others at the meeting are more blunt. Mayor Melamed, for one, feels that simple discussion of Peak Oil itself is a “distraction” – that individuals need to start dealing with the issue regardless of whether it’s a reality.

“It’s like budgeting before you’re bankrupt,” he said. “The bigger and most important piece of work that’s been done is ecological footprint and it shows that with the current rates of consumption, if everybody lived the same lifestyle as the top billion, we’d need four more planets.”

The Task Force thus far has several recommendations for adjusting to a future with Peak Oil. Among other things, it recommends that the SLRD plan walkable, sustainable communities that are accessible through transit; lobby for government vehicles to run on biodiesel or electricity; and to expand the social safety net by providing counselling for people who have difficulty adjusting to a lower carbon future.

Jaccard thinks it’s a foolhardy endeavour to have a whole Task Force focusing solely on Peak Oil.

“A task force on shifting to a non-carbon emitting society is critical but these are very different things,” he said. “Humanity needs to decrease its combustion of fossil fuels at an extremely rapid rate – we are in crisis mode with respect to the climate. We need radical policies.

“Guess what happens to the international price of oil if humanity really does act on the very dangerous threat of catastrophic changes in climate? The price falls. So we need to act on climate. And in doing so, the high price issue of Peak Oil goes away anyway.”

Jaccard’s words are, like the debate over Peak Oil itself, rather irrelevant to the Task Force. It is gathering public input on its recommendations that will thereafter be sent to the board of the regional district for implementation. It is gathering input in all SLRD communities including Squamish, Pemberton and Lillooet.


One Comment on "Peak oil: threat or fantasy?"

  1. KenZ300 on Sat, 27th Nov 2010 1:57 am 

    Will we transition to alternative energy soon enough to reduce the impact of high oil and coal prices on the economy and family budgets?

    We got a quick look at the impact in 2008 when the price of oil went to $147 / barrel and the world economy tanked. When gas hit $4.00 a gallon in the US people were parking their trucks and SUV’s and were tripping over each other at foreign auto dealers looking for high mileage vehicles. Suddenly adding several hundred dollars a month added to those hour long commuting costs caused people to change their behaviors. The problem was the the money spent on energy in the family budget reduced the amount of money for other items in the budget like the mortgage.

    With China and India growing their use of oil, coal and other limited resources very rapidly it is only a matter of time before the worlds limited supply of resources meets an ever expanding world demand resulting in higher prices for all.

    While people in the US will conserve more and change their behavior the continued growth in China and India with their 2 billion plus populations will continue to demand more resources.

    Can we transition to a world of clean, sustainable alternative energy fast enough to avoid a severe economic disruption to the global economy?

    Will wind, solar, geothermal and second generation biofuels ramp up production fast enough to reduce the economic impact of high oil and coal prices?

    Will electric cars ramp up production fast enough to reduce our dependence on oil as our primary source of transportation fuel?

    Has world population growth exceeded the worlds limited resources? Over 4 billion people live on less than $2 a day.

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