The past few months, I have been paying much more attention to the growing economic crisis than I have peak oil, although that will probably change soon, as I find peak oil a much more dire and long-term problem than a slide in our economy. In the meantime, I found this article by Robert Hirsch, in which he notes that although peak oil has retreated into the background due to our economy and the lowering oil prices, it would be a mistake to forget about it, as it will likely confront us again in the near future. Also, I'm not sure how many of you come here, but I am getting a tax return (not sure if that will be enough to get in), and I am seriously considering investing it in a commeodity like oil. I think it's gone about as low as it's going to, and if it goes up again (or even higher than it did), then I don't want to miss out. If you know anything, or where to go, email me.
Peak oil - what do we do now?
by Robert Hirsch
The history of world peak oil production has been truly remarkable. Modern day concerns were rekindled in 1998 when Campbell and Laherrere published their peak oil thinking in Scientific American. Not surprisingly, they were largely ignored. Some in the establishment took the time to utter “Bah-humbug,” but a few independent souls decided to seriously consider the problem.
ASPO was formed soon thereafter and began annual meetings, fostering communication and helping to create increasing interest in the subject. Peak oil concernists began to form a community and momentum increased. Counter arguments buttressing the no-problem point of view came from OPEC, CERA, EIA, IEA, and some of the major oil companies. The denier proclamations grew in intensity, indicating that the serious consideration of peak oil was beginning to trouble parts of the establishment. Various new studies supporting the peak oil threat emanated from independent individuals and groups. Forecasts for the onset of peak oil went from being up to 20 years into the future, to roughly 15 years and then to less. The establishment continued to argue that the problem was so distant that people need not worry.
There were a number of significant milestones along the way - one of special note being Matt Simmons’ book, Twilight in the Desert. As time went on, IEA and some of the major oil companies began to join the list of those who were openly concerned. Momentum grew, influenced in large part by the remarkable increase in oil prices.
In mid-2008 the economic crisis struck. As world economies slowed, oil demand declined. To the surprise of almost everyone, oil prices dropped from near $150 per barrel to less than $40. With gasoline prices in the U.S. retreating to what was considered generally tolerable levels and economic threats avalanching, it’s no wonder that peak oil slid to the back burner of public consciousness.
The world is now in a period of epic economic chaos. People are disoriented and unsure of what it will take to restore their economies. Many serious economists, financiers, and executives are loath to even forecast when an economic recovery might begin. It’s easier for me now to understand how my parents and grandparents must have felt during the 1930s.
But the peak oil problem has not gone away. World liquid fuels production reached a plateau in mid-2004 and has fluctuated within a relatively narrow range in spite of mighty efforts to increase world production. In mid-2008, benefitting from the work of Campbell, Laherrere, Skrebowski, Aleklett, Simmons, Robelius, Gilbert, Bentley, Al Husseini, Deffeyes, Koppelaar, Birol, and others, I came to believe that world liquids production might stay on the existing plateau for the next 2-5 years and then go into a 3-5% per year decline
Recently, OPEC cut back oil production in an attempt to stem the oil price decline. How much might their cutbacks delay the onset of world liquid fuels production decline? Assuming the plateau model and five years to the onset of decline, each million barrels per day of oil production withholding buys roughly three weeks delay, so a steady, continuing reduction of say four million barrels per day over five years might result in a delay in the onset of world oil production decline by maybe three months. That’s not very much.
We’ve now in a period of major human disorientation, but geology does not become disoriented on the human timescale. The impending peak oil problem may now be generally absent from the media and the public consciousness, but it has not gone away. We would do well to continue meaningful studies of peak oil production and mitigation during this period of peak oil quiet. More studies of practical physical and administrative mitigation options are needed. Totally remaking our cities and transportation systems are wonderful goals but will require an extremely long time. In the meantime, we have relatively little in-depth thinking about what we can do when the will-to-act suddenly appears. We need better analyses on such options as rationing (how to do it), carpooling (how to force and police it), telecommuting (how to make it happen), rapidly switching to more fuel efficient vehicles during a deepening recession, rapidly implementing EOR, CTL, shale oil, etc (business-as-usual won’t do), etc. Between now and the wakeup, we can develop carefully thought-out mitigation options for when people are ready to begin to seriously mitigate peak oil. Working on practical solutions represents a high calling.
Robert L. Hirsch is Senior Energy Advisor at MISI. Previously he was Assistant Administrator of U.S. ERDA; EPRI VP; ARCO VP; and Chairman of the Board on Energy and Environmental Systems at the National Academies. He was lead author of “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” (Feb 2005).