Are We At Peak Oil?

January 28 2011

CO-OWNING THE EARTH

$350 for a barrel of oil? Douglas Coupland starts his book Player One with a sudden 400 percent oil-spike. Was he unrealistic in doing so? Let me outline the human energy history.

Our earth has no expiry date. The Lord made sure of that when he called it good seven times and very good when he had finished the final touches. But our precious planet has a ‘best before’ date. That point was passed a long time ago, coinciding with the eating of the proverbial apple. It’s been downhill ever since. God tried to correct the deteriorating situation with Noah and the Flood, but gave up in disgust with the Tower of Babel and the confusing of tongues. Now even that predicament has been overcome, with English in multiple accents the world language.

Our earth has no expiry date, but that does not mean that nothing will ever expire. A lot will, and it is now accelerating at an ever increasing pace. The world economy has always been able to cope with the disappearing of certain vital ingredients. For the longest time wood was the energy of choice: when Jesus fried some fish on the Galilean shore, he used some dead branches from nearby trees. Historian J.R McNeill in his Something New Under the Sun writes that in in Jesus’ time the world had 200 to 300 million people. Since the earth then was mostly forest, wood, as a renewable source of fuel, was able to do the job. It took 1500 years to double the population to 500 million, and because of certain discoveries, such as potatoes, only 300 years to reach 1 billion in 1800.

When wood could not do the job anymore, coal replaced it, even though it was so highly polluting that London England became Smog Town. However, thanks to those pure carbon pieces the next billion required only 120 years, reaching it in the 1920’s when I was born. In my life-time the number of people inhabiting this world has more than tripled, to 7 billion greedy consumers, and this time oil was the wonder fuel.

Oil has wrought miracles, enabling the marketing of ever more marvellous machines: television is now old-hat; land-line telephone is almost passé; Internet, Facebook, Youtube and Twitter, are just the latest of the innovative litter.
Oil has also been the trigger for less pleasant plays. Where the 19th century was one of peace and progress, the short 20th one (which started in 1914 and ended in 1991 according to Eric Hobsbawm) saw almost 200 million of violent deaths. Access to Oil played a crucial role in causing these casualties.

Will our 21st Century be even shorter, and see even greater misfortune?
Our era totally depends on one vital item: carbon-based energy. The earth has no expiry date, thank God, but oil, gas, and even uranium and coal are finite substances. All are enemies of God. Enemies of God? Yes, anything that pollutes, or anybody that pollutes is contrary to God’s works, which God called ‘good.

According to the influential IEA, the International Energy Agency, based in Paris, Peak Oil – 30 billion barrels per year -was reached in 2006, now about 5 years ago. Peak Oil refers to the easily obtained crude that originates in the Middle East, the North Sea and Texas, the light stuff that needs little refining, unlike the tar-sand mix that needs extracting, boiling and refining before it can further poison the air, producing only 1.3 barrel for every barrel of oil spent.

The last time I peeked at the oil price, it was around $92 and creeping up. Financial gurus are no different from you and me: they see safety in numbers, and typically exhibit herding behaviour. Once the pack decides that peak oil is real, we will see rapid shifts. If even a small percentage of restless money decides to chase after oil, there’ll be a rapid and sudden explosion, perhaps jumping to $200 per barrel overnight, just as happened in the Player One book.

It has been estimated that a 4 percent in economic growth increases oil use by 1 percent, a 4 to 1 relationship. This also means that when oil production drops, we would see about a 4 percent decline in GDP for every one percent of less oil available. Just imagine: a 10 percent drop means a 40 percent decrease in Global growth!

It is only prudent to prepare for the inevitable. Our earth has no expiry date, but our resources do. We have built a society on the assumption of cheap and inexhaustible energy supplies. The word ‘assume’ quite appropriately contains three words: it makes an ‘ass’, out of ‘u’ and ‘me.’

Yes, Coupland was right to paint a ‘peak-oil’ scenario.

Bert Hielema has lived in now notorious Tweed since 1975. His blog is ‘hielema.ca’ His e-mail address is ‘bert@hielema.ca’

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