Slog - The Stranger's Blog

Line Out

The Music Blog

« The Triumph of Lust | Political Science »

Monday, August 14, 2006

Peak Oil

Posted by on August 14 at 11:37 AM

Looks like the Seattle Times is currently running a great series of stories on America’s oil addiction (first published by the Chicago Tribune last month).

There’s a free registration required for reading the whole Tribune series online, but it’s worth it for the discussion of peak oil, something I got clued into two years ago when I reviewed these two scary books.

What is peak oil all about? Basically, the idea is that the world doesn’t have to fully run out of oil before our entire oil-based economy collapses. We only have to use up half of the planet’s reserves, and at that point (coming soon) — well, as the Tribune series describes it:

Permanent fuel shortages would tip the world into a generations-long economic depression. Millions would lose jobs. Farm tractors would be idled, triggering massive famines. Energy wars would flare. And carless suburbanites would trudge to their nearest big-box stores — not to buy Chinese-made clothing, but to scavenge glass and copper wire from abandoned buildings.

There’s some controversy about when (and if) peak oil is coming, but the controversy is starting to sound a lot like the global warming “controversy,” with independent experts saying peak oil is already here or coming within a few decades, and interested parties describing the independent experts as “alarmist.”

Anyway, props to the Times for running this series. Peak oil might just be the most important, least-understood phenomenon in the world today.


CommentsRSS icon

The Wikipedia pag does a pretty good job explaining it as well.

While I don't have any basis to discredit the idea of Peak Oil I've been turned off to it by it based on the fact that it's always presented as such a malthusian prophesy of doom.

There's an interesting story in (I think) last month's Harper's about this, although it's more about the Peak Oilers themselves, who mostly seem like folks who are really looking forward to living in Mad Max-land, and making appropriate preparations. They might be totally right, but they still seem a little loony. Still, it is scary stuff.

This is something that's been on my mind a lot lately too, and it scares the shit out of me, because I hope to live another 40 - 50 years, and I really wonder what the world will look like in my "golden years."

Until we see alternative energy sources rolled out massively and rapidly, we are faced with a complete collapse and implosion of the culture that has evolved over the last century. Never mind global warming - we'll die by civil war and famine first.

Suburbanites will pull back to the cities and only the rich will be able to own estates outside the overcrowded city walls. Rural areas will return to fiefdoms as people are divided into landowners and serfs.

Needless to say, many of the simple conveniences we've come to expect will disappear. Plastic? Disposable anything? Forget that.

It drives me nuts that our government and corporations are not pouring resources into large scale alternative energy research.

As an individual, I put my money where my mouth is and invested some of my own money in an alternative energy fund last year. It's a broad fund with holdings in many different types of research, and yet it's tanked this year while oil prices continue to rise and we continue to waste our resources and expand our battlefronts further into the mid-east.

Bryant Urstadt's full-lengther in Harper's August was a great non-slam describing how peak oil's grown into the type of apocalyptic scenario "Americans seem born to love." Will make great copy for years to come.

Oh, and I think Ayn Rand's Atlas Shrugged is a must read for anyone interested in this discussion.

And no, I'm not a crazy Rand objectivist; I just think Rand wrote an excellent depiction of a world breaking down for lack of brains, resources and technology.

It seems like most peak oilers (Kunstler, anyone?) would like to see us in a Mad Max situation, not because they want to live that way, but because they'd like to see the rest of us live that way. We need to be punished for our environmentally immoral ways.

Peak oil and global warming are opposite scenarios. In the global warming scenario, we continue burning oil and releasing CO2 until temperature increases have catastrophic consequences. In the peak oil scenario, we stop burning oil and as a consequence civilization collapses. Pick your poison!

As far as I can tell, the only aspect that these two scenarios share (and which is want really appeals to the environmentalsts who are so enamored of them) is that they are apocolyptic.

No one disputes the geologic premise of peak oil (oil is a finite resource that will eventually run out). The dispute is about the economic consequences, and here the peak oil alarmists are full of B.S. Here is a theorem you'll learn if you take a few economics courses: the price of a finite, irreplacable resource will increase at the interest rate (currently around 3%/year in real terms).

By the way, the situation in which oil is running out is also precisely the situation in which we don't need the "Manhattan project for alternative energy" of which the left is currently so fond. If oil is running out, the incentives for the private sector to develop alternatives are increasing and will continue to increase.

David - I think we can all agree that corporate interests will follow the money and develop alternatives when they become sufficiently incentivized.

But can we not also agree that existing energy giants will insist on following every last drop of profit?

What we need is for these giants to use the money we're pouring into them, take the initiative, and lead. If oil and automotive companies had any wisdom or foresight, they would be leading the charge in order to stay on top of future trends, instead of following the money off a cliff.

But is it just the easy to get at oil we're running out of vs. the hard to get at reserves? Supposedly, technologies are being developed to get to the hard to reach oil (canadian oil sands.) In the long run, we may end up with more economic hardship in the form of higher prices, but not the mad max dog eat dog situation.

Well, I was a believer in the "peak oil" theory until I read Greg Palast's new book _Armed Madhouse_.

He claims that Hubbert put forward his theories, -- while on Shell's payroll --, during a time when oil was dropping in price and more resources were being found (circa 1956).

Shell's solution? Convince people of immanent oil scarcity; boost oil prices.

Hubbert also predicted that we'd be using huge amounts of nuclear energy for the next five thousand years...

Instead of fear that oil will run out, we should decentralize our resources and get ourselves of the Big Oil teat as soon as possible.

As for oil being finite: There is at least one theory that oil is created by microbes living deep in the Earth's crust. As far as I know, it hasn't been conclusively disproven. Perhaps, if used at a steady pace, oil will last forever.

In any case: Who is profiting from Peak Oil Scare? Saudi Arabia and Big Oil. Perhaps take a peek at them before running for your bunker.

Of course since the ice caps and giant peat bogs are melting, so we'll have to build more ocean oil rigs...

Peak oil as a concept is a joke. The economic impact of oil is driven entirely by the rate at which it can be produced in the global market. The rate of advancement of petroleum technology clearly shows that we can continue to pull it out of the ground faster and faster until it simply isn't there anymore. In the meantime, however, it will become more and more expensive to produce, making other sources of energy profitable.

The availability of alternatative energy sources may affect the demand for, and thus production level, of crude, but that can hardly be interpreted the way Hubbert intended.

Oh, wait - something's going on "deep in the Earth's crust?" I'm so there.

The Peak Oil apocalypse scenario seems to miss out on the basic supply and demand concepts.

After Katrina, when gas prices more-or-less doubled in a very short period of time, what happened? Apocalypse? No. People adjusted. They drove less. Sales of big SUVs plummeted. The Hummer H1 has been scrapped. Hybrid Priuses are selling as fast as Toyota can crank them out of the factory. Daimler-Chrysler is finally going to start importing Smart Cars to the US market. Why? Market demands.

As oil becomes more scarce, gas prices will double again eventually, to $6 a gallon or more, and then $15 a gallon a few years later. What will happen then? Apocalypse? No. You'll just get more people to drive less, ride their bikes, take public transit, or buy more fuel-efficient vehicles. Fewer people will live way out in the suburbs, and more people will live closer to where they work. People will adapt. Society will not collapse.

Market conditions can't solve everything, of course. The government could do more to encourage alternatives to gas-guzzling single passenger vehicles. Spend more on public transit options, and less on mega-highways (or tunnels) that enable single passenger drivers. Encourage development of alternative fuels and energy sources.

And American car companies could pull their heads out of their asses. I remember the "oil crisis" of the mid 1970s. Up until then American car companies ruled, and Japanese cars were a novelty. When gas prices spiked, suddenly there was Datsun and Toyota and Honda with a whole range of fuel efficient cars available almost immediately. It took years for American car manufacturers to develop smaller more fuel efficient cars. And they really never recovered. That gave the opening the Japanese manufacturers needed to get a foothold on the American market. Did the American manufacturers learn from this experience? Obviously not, since almost the exact same thing happened over the last year. Again, American manufacturers are in the position of playing catch up, and may be asking for government bail outs because of their inept planning.

But if the government and large corporations took a longer view, like Toyota for example, it is obvious that a little bit of planning ahead could make the transition to higher fuel costs a lot less traumatic to the society as a whole.

There was a guest editorial in Thursday's PI that was so striking, I'm astonished more people did not take notice. The article was about the newest generation of solar cells recently developed - solar cells that cost less, by a factor of 4 to 5, than the previous generation. There are currently industrial facilities being opened to produce these cells, which are a flexible, very thin sheet that can be added to all kinds of building materials, including roofing materials.

The impact of this could not be overstated. This could bring cheap, renewable, clean electricity to the world, including the third world. What's been stopping widescale adoption of solar cells as part of the average building construction is cost. Make those solar cells so inexpensive to add that they pay for themselves in generated power within a couple of years, and suddenly we have an electrical revolution.

I was astonished more people did not take note of that article. The authors aren't exactly pie-in-the-sky idealists, either - they're both coming from the extractive industries.
http://seattlepi.nwsource.com/opinion/280625_solarcell10.html

Keshmeshi: It seems like most peak oilers (Kunstler, anyone?) would like to see us in a Mad Max situation, not because they want to live that way, but because they'd like to see the rest of us live that way. We need to be punished for our environmentally immoral ways.

The most prominent peak-oil experts I'm familiar with are scientists or financiers who are simply laying out the facts as they see them. See:

  • David Goodstein: Out of Gas: The End of the Age Of Oil
  • Kenneth Deffeyes: Hubbert's Peak: The Impending World Oil Shortage
  • Matthew Simmons: Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy

In any event, just because the likes of James Kunstler may appear to relish a possible oil catastrophe (and I'm not saying that about him myself), the science of peak oil doesn't become any less credible. This is a bit like saying that we should dismiss the science of global warming because Al Gore is a stiff.

You know, if we just took the money we waste on "protecting oil" - Iraq, etc - and invested it in American-manufactured wind turbines, solar cells, and other solutions, we would have already replaced all the oil we import from the Middle East and cut the supply lines of the terrorists.

But that would be prudent.

The best part is, once the oil is gone or so difficult to extract that it's no longer profitable, we can finally tell those whackos in the Middle East to shove off.

Their insane proclivity for violence will then be no one's problem but their own.

I agree with David Wright, neo-realist, and "SDA in SEA" that the marketplace will adapt and prevent the apocalyptic scenarios as we slide past the peak. It already is adapting, as SDA has described.

The problem is, (to state the obvious) the more oil-dependent a region or a country is, the more vulnerable it will be to oil price shocks. Gas will reach $6 a gallon within five years. I'll be happy to bet on it. Yet, the problem is not $6/gallon gas per se. Western Europe has been living just fine with $5 or $6 gas for a while. The problem is, will we able to adapt and reduce our dependency in time, or will a sudden spike cause our economy to go into a severe recession (the next Depression)?

European countries had the foresight and political will to impose a steep tax on petrol and pour the proceeds into public transportation. Soon enough, Europe's going to be at a huge economic advantage to the United States, at least in this respect, because their economies have gotten a jump start on living in a post-cheap oil world.

Interesting factoid: the average Italian consumes half the oil the average American does.

human ingenuity will create a substitute energy source to power tractors. People won't sit around scratching their heads saying, "well ain't that the darndest! We done run out of oil!"

lol@traceback - I can't wait.

Good if you're a Canadian, bad if you're an American.

On the other hand, I should point out the Blue states are already well underway in starting to convert over, so it's the Red states that will be left in the dust.

oh, and cressona, the average Frenchman consumes even less oil, but that's why high-speed train ridership is skyrocketing there. trains use 1/10th the energy of cars/trucks/SUVs - and even less than airplanes.

HIM: human ingenuity will create a substitute energy source to power tractors. People won't sit around scratching their heads saying, "well ain't that the darndest! We done run out of oil!"

It's funny, the folks who have boundless faith in science in this realm are much the same folks who have endless skepticism about science when it comes to:

  • global warming
  • evolution

It's amazing how people are able to be so selective about their science -- whatever confirms their own vanities about themselves.

I think Goodstein's book has a good answer, albeit terribly technical, to this line of thinking. Short of nuclear fusion, there's not going to be anything approaching a perpetual motion machine showing up on the foreseeable horizon. Any oil substitutes are going to be more expensive. Oil packs such a powerful energy punch because it took hundreds of millions of years of dead organic matter building up to create.

Here's just one example of the limits of present-day technology (from New York Times columnist Nicholas Kristof): "U.S. ethanol sometimes takes nearly as much petroleum to make (in fuel to run tractors to harvest corn, for example) as it saves."

I remember how America was doomed when we started running out of whale oil to heat our houses, light them, and make perfume with.

Ever since, other nations have ...

oh, wait, never mind.

now, let's stop whining and start switching over. first, go out and buy some compact flourescent lightbulbs at Home Depot, cost about $6 for 4 or $9 for 6, that use 1/8th the energy of standard light bulbs.

second, sign up with Seattle City Light to get Green Power - you can go 25, 50, 75, or 100 percent. I'm at 100 percent. Yup, you're paying for wind turbines.

third, next car you get, get one that gets at least 5 mpg more than your last one, new or used. you decide, I don't care. if you have a Hummer, trade it on an H3 - upgrade from 7 mpg to 20 mpg.

fourth, if you're stuck in traffic, put it in neutral. or take the bus next time, you could be reading The Stranger online instead of baking in your car.

If we did this and told ten friends, and they told ten friends, we'd have cut our energy use in half by now.

Inaction helps al-Qaeda. Action cuts their supply lines - and you know Bush won't do that, he's handfasting with his Saudi "friends".

Interesting factoid: the average Italian consumes half the oil the average American does.

The average Italian has nowhere to go :P

Nonetheless, good stuff across this thread.

First of all, my problem with peak oil is that it is an attempt to show that a prophecy (that of Hubbert in 1956) is being fulfilled. This places it square in the category of all the other end-of-world theories -- none of which to date have come true.

All estimates that say that peak oil is upon us are based on the short-term trends of supply from currently existing sources. It doesn't take into account any new or future sources -- because it can't, because we simply don't know how much oil and other fossil fuels there are in the earth. This is why it took so long for places like Nigeria to find out that they had gobs of the stuff. Most of what is known about where to look for oil are based on where else oil has been found and in what parts of the earth.

Peak oil also ignores alternate sources of oil, such as synthetic oil (from coal, which the US has in abundance), oil shale, recycled petroleum, etc.

My other problem with peak oil is that it is an excuse for oil cartels to jack prices. Why is gas $3/gal? Well, because peak oil is coming, so we'd better start cutting back on supply instead of meeting demand. Prior to the 1970s energy crisis, petroleum products were cheap. The only thing that has made it expensive has been OPEC monopolization, oil company exploitation, and lack of industry support for alternative energy sources. Notions like "peak oil is upon us" are convenient cop-outs for what is essentially a massive leveraging of Keynesian economics.

Global warming notions hurt the oil industry. Peak oil notions help the oil industry. Nuff said.

Comments Closed

In order to combat spam, we are no longer accepting comments on this post (or any post more than 45 days old).