To understand the full implications of this fact, it is important not to lose sight of the role that plentiful supplies of inexpensive petroleum have played in maintaining the American way of life.
Residents of industrial nations live, breath and eat oil every day of our lives. The U.S. burns more than 20 million barrels of oil each day, or one-fourth of the world’s total production. Petroleum is feedstock for pesticides, fibers, rubber, pharmaceuticals and plastics, among other things. Most forms of mechanized transportation in the United States, from automobiles and airplanes to farm equipment, are dependent on petroleum-based fuels for normal functioning.
So when a consortium of leading geophysicists and oil industry whistle-blowers forecast a dramatic downturn in oil production within the next two decades, you would think the U.S. government would take the threat seriously and invest resources necessary to develop renewable energy while we still have a chance.
Don’t hold your breath.
Politicians from the dominant political parties have been in bed with Big Oil since the early 1900s and have no intention of jeopardizing their relationship by funding renewable energies. Without a drastic change in course there is every indication that our generation will be flung into social turmoil as oil scarcity spurs rising energy prices and deep economic recession.
There is a broad scientific consensus that within the next 25 years world oil production will reach maximum capacity and then begin a relentless decline toward exhaustion. This conclusion is rooted in relatively straightforward observations. First, the Earth possesses a finite amount of oil – it is a limited and nonrenewable energy source. Experts suggest our original endowment of oil resources is somewhere between 2 trillion and 2.7 trillion barrels.
Second, annual demand for oil is likely to increase well into the foreseeable future. The U.S. Department of Energy expects world oil demand to climb 50 percent by 2025. With few petroleum resources left to be found, we will have to meet most of the increasing demand with reserves that already have been tapped.
Relying on old reserves to satisfy future demand is acutely problematic. Production at any given reserve has a short and predictable decades-long lifespan. Production tends to reach maximum output (i.e. “peak”) when about half of the recoverable oil from a reserve has been produced. Because the remaining oil is far more difficult and costly to extract, shortly after a reserve hits peak production it enters a steady and irreversible decline.
Since world oil production is the sum total of production from many separate reserves, geophysicists theorize that world production will follow a similar pattern that has been observed in those individual reserves. If this proves to be the case, the oil crisis will begin long before the wells run dry.
Because the world already has consumed 1 trillion barrels of oil -nearly half of the total – and demand continues to grow, world oil production will peak sometime soon. The exact timing is impossible to predict, but there is general agreement that it will happen between 2010 and 2030. Every year after the peak there will be less oil available on the market than the year before.
Within 10 years or so of production topping out, the world economy will have to substitute some 50 percent of its projected oil consumption with alternatives to fill the gap between supply and demand. This would be a Herculean task during the very best of times. With the federal government spending hundreds of billions in taxpayer dollars fighting a lost war in the Middle East to control what remains of the world’s oil, the likelihood of creating a sustainable future fades into the realm of the absurd.
The energy challenges facing our nation, including the potentially devastating consequences of peak oil, were outlined in a 2005 study commissioned by the Department of Energy called “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management.” The report speaks of an ominous future characterized by economic hardship resulting from the volatile combination of shrinking oil production and rising demand. The authors of the study state bluntly: “without timely mitigation, the economic, social and political costs (of peak oil) will be unprecedented.” They go on to stress that the transition away from petroleum will not happen over night – it will “require decades and cost trillions of dollars.” According to the study, the decade following the peak will be marked by “dramatic increases in inflation, long-term recession, high unemployment and declining living standards.”
Although the long-term picture admittedly is complicated, the writing is on the wall: As worldwide demand for oil outpaces worldwide production, the price of a barrel of oil will skyrocket and economies everywhere will grind to a screeching halt. The hope that renewable energy and local economy might soften the coming petroleum crisis is the subject of my next column.
Nathan Paulsen welcomes comments at [email protected].
