Peak Oil

Peak Oil

	Oil is the main fuel of the global industrial civilization. Its imminent depletion is a problem that will have a profound impact on virtually every aspect of modern human life.
	How important is Oil? Oil enables more or less all land, sea and air transport to function. The efficient movement of raw materials and goods, as well as personal mobility, is almost entirely oil-dependent. Food production also relies heavily on oil to run farm machinery and to make fertilisers, herbicides and pesticides. Oil generates about 40 percent of the world's commercial energy, provides heating fuel, and drives industry and commerce. No other existing energy source can currently match the versatility, convenience and cost of oil. Oil also supplies raw materials for many thousands of manufactured products as diverse as plastics, medicines, clothing and building materials.

What is Peak Oil?

	The Source of Oil - a true fossil
	Trends in Crude Oil Prices
	Oil Depletion
	The Discovery-Consumption Gap
	Energy Security
	The Olduvai Theory
	Peak Oil News
	Further Reading

Peak Oil is described as the point when the maximum petroleum production rate is reached. Following this point forward, the rate of production will enter terminal decline.

Based on the well documented Hubbert model (Hubbert 1956), oil production follows the standard bell-shaped curve of a normal distribution. Whilst more recent studies consider this model a slight over-simplification, the underlying concept is abundantly clear. Hubbert correctly predicted that U.S. oil production would peak in about 1970 and then decline. The easiest oil is extracted first - and has now already been extracted - with the more difficult, more expensive, and lower quality, resources tackled last. All oil fields eventually reach a point where they are no longer viable. Oil is a finite resource and eventually all oil fields will no longer be productive. Once the peak of production is passed, the rate of oil extraction begins to go down, while at the same time costs increase.

An exact date for "Peak Oil" is difficult to predict. This is due to geological complexities, measurement problems, pricing variations, and demand elasticity. There are also considerable political influences. Countries as well as companies are notoriously reticent about their stated oil reserves, and are often unwilling to divulge what can be commercially very sensitive information. Member nations of OPEC may have reason to inflate their reserve oil figures. As a result, it's difficult to say with certainty how much oil is left on Earth. However, many experts say that the peak will come before 2015, whilst others say that it has already happened.

Running on Empty
It is clear that the current level of global energy consumption based on oil is unsustainable, from both environmental and geological points of view. Current food production techniques are also highly dependant on oil.

When resource use rises beyond the carrying capacity of its environment, or conversely the carrying capacity falls, the existing use can no longer be supported and must inevitably decline to match the carrying capacity. In the case of oil, peaking will result in increasingly higher oil prices and in long-term economic hardship for all oil-dependant processes and societies. As peaking is approached, both fuel prices and price volatility will increase dramatically and, without timely mitigation, the economic, social, and political costs will be unprecedented.

Nature will provide our needs, but not our greeds

Agricultural Impacts
Oil and gas supplies are now essential to the majority of modern agricultural techniques - growing, harvesting, processing, transport and storage - in other words along the entire value chain. Reduced global oil supplies will cause high food prices and unprecedented famine in the coming decades unless serious steps are taken now to ensure that agricultural systems are based on ecological principles with minimal petrochemical inputs. Following peak oil, the world will enter a new phase and the entire economy is certain to change.

The Source of Oil - a True Fossil
The world's oil supply is finite because it is no longer being naturally formed. Several hundred million years ago plankton, and bacteria feeding on the plankton, thrived in the oceans of a World with a carbon dioxide rich atmosphere. At that time, sulphur dioxide from volcanic origins lined the ocean floor, effectively preventing living creatures from inhabiting that zone, and therefore consuming the plankton and bacteria after their death. Those plankton and bacteria that settled in porous sandstone or limestone, which was later capped by shale or salt, were heated and pressurized to ultimately form oil. It is clear, therefore, that oil as we now know it is a true fossil - and something that will not be created again. This makes the more or less total dependance on oil and oil-based products by today's societies particularly dangerous.

Oil Depletion
Oil depletion occurs in the second half of the production curve of an oil well, oil field, or the average of total world oil production. The Hubbert Peak Theory makes predictions of production rates based on prior discovery rates and anticipated production rates. The Hubbert Curve predicts that the production curves of non-renewing resources approximate a bell-shaped curve. Thus, when the peak of production is passed, production rates enter an exponential decline.

For more information on Peak Oil, the Energy Crisis and what we can expect ... see the "Peak oil primer" at Energybulletin.net, and at the Oil Depletion Analysis Centre, or visit the Links below.

Source: www.hubbertpeak.com/campbell/

Trends in Crude Oil Prices since 2000
Brent Crude Oil daily closing prices, with best fit trend projected forwards 5 years

"Oil companies spent $8 billion on exploration in 2003, but discovered only $4 billion of commercially useful oil."
(New York Times 25 March 2005)

The cost and availability of oil have profound impacts on many aspects of modern civilization.

The 21st century will be the era of declines - in the availability of oil, natural gas, and coal.

For every barrel of oil we discover, we currently consume four.

Worldwide discovery of oil peaked in 1964 and has followed a steady decline since.

Oil production is already falling in 60 countries.
At some point, most probably before 2015, global oil production will start to fall ... FOR EVER

All aspects of modern civilization are likely to be severely affected by the reduced availability and increased cost of oil. In particular, modern agricultural methods are heavily dependant on oil, as is transport.

The Discovery-Consumption Gap:

With the world now finding less than one barrel for every four it consumes, the pressure on capacity can only increase in the future.
The gap is growing wider.
(Aleklett and Campbell, 2003).

The Net Difference Between Annual World Oil
Reserves Additions and Annual Consumption

Source: Aleklett and Campbell, 2003

As we use up the easily accessible oil supplies, the amount of energy required to extract energy increases, so not only are we facing a rapid decline in reserves, now estimated to be running at 6.7% a year, we’re also facing decreasing extraction efficiency.

Energy Security

The provision of a sustainable energy future will require a dramatic transformation of the world’s energy supplies and consumption patterns. The current global financial crisis and accompanying economic downturn has made meeting this challenge significantly much more difficult. Despite the current softening of energy demand, the world is facing a long-term tightening of conventional energy supplies and a need to address increasing environmental concerns that will require international cooperation on an unprecedented scale. ... More: Energy Security: Transatlantic Cooperation and Sustainability.

The Olduvai Theory of Industrial Civilization

The Olduvai theory states that industrial civilization (as defined by per capita energy consumption) will have a lifetime of less than or equal to 100 years (1930-2030). The theory provides a quantitative basis of the transient-pulse theory of modern civilization. The name is a reference to the Olduvai Gorge in Tanzania.

A useful introduciton to the Olduvai theory can be seen at Olduvai Revisited 2008 (TheOilDrum)

Duncan: The Olduvai Theory of Industrial Civilization

Energy production per capita (e) defines it.The exponential growth of world energy production ended in 1970... Average e will show no growth from 1979 through circa 2008 ... The rate of change of e will go steeply negative circa 2008 ... World population will decline to about two billion circa 2050 ... A growing number of independent studies concur...."

More details see
Richard C. Duncan
or
The Olduvai Theory. Energy, Population, and Industrial Civilization.

See also:

Olduvai Theory Revisited: 2008 Assessment. Video and corresponding web article.
The Olduvai Theory - Towards Re-Equalizing the World Standard of Living - Summer 2009, The Social Contract

Peak Oil News:

The Peak Oil Crisis: 2011 – a pivotal year? The IEA says that during 2010 global demand for oil grew by 2.5 million barrels a day. Rates of growth in consumption this fast cannot go on much longer in the face of very slow to flat increases in production. However, financial markets continue to ignore the fact that global oil production has reached a plateau after 150 years of steady growth. Nevertheless, chane is inevitable and while some new form of an economic system will evolve, the transition is likely to be long and painful. See article by Tom Whipple at energybulletin.net.
Warning over Global Oil Decline. There is a "significant risk" that global production of conventional oil could "peak" and decline by 2020, a report has warned. The UK Energy Research Council study says there is a consensus that the era of cheap oil is at an end. But it warns that most governments, including the UK's, exhibit little concern about oil depletion. The report's authors also state that the 10 largest oil producing fields in the world are all in decline. For more go to ... BBC News article, or visit the UK Energy Research Council page on The Global Oil Depletion Report where the report is available.
The International Energy Agency reports the rate of decline in oil production is now running at nearly twice the pace calculated just two years ago. The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.
The first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an oil crunch within the next five years which will jeopardise any hope of a recovery from the present global economic recession. ...more. The Independent
Older News Items:
Global oil supply will peak in 2020, says energy agency
Don't kill the planet in the name of saving the economy. The collision of the credit crunch and the climate crunch ...
International Energy Outlook 2008 report by the US EIA, predicts steady rises in both global energy consumption, and carbon dioxide emissions.
A report "The Impact of Peak Oil on International Development", by APPGOPO with RESET and Practical Action, 21 July 08, indicates that sustainable, non-fossil fuel dependent energy generation, construction and farming methods will be essential if communities are to become resilient to energy price rises. The report also concludes that a shift from an industrialised agriculture system to one based on ecologically sound principles free from petrochemical inputs is essential.

Links to More Information on Peak Oil and Related Issues

For more information and discussions about Peak Oil and related topics, visit the following web sites and reports:

Oil, Agriculture, Food & Economy
	Non Renewable Resources: An overview of the differences between renewable and non renewable resources. Even though it is a well known fact that non renewable resources will, one day, be depleted, there is insufficient focus on alternative, renewable resources.
	Why Our Food is So Dependent on Oil
	Growing Food After Peak Oil, by Richard Heinberg
	Energy and Human Evolution, by David Price

Peak Oil: Web sites
	Energy Bulletin: Peak Oil Primer
	ASPO: Association for the Study of Peak Oil and Gas
	ODAC: The Oil Depletion Analysis Centre
	The Oil Drum
	Peak Oil News
	PowerSwitch: Peak Oil Awareness & Media Coverage
	Hubbert Peak of Oil Production with a link to Hubbert's original 1956 publication
	Global Information and Early Warning System on Food and Agriculture (GIEWS). GIEWS Food Outlook, and GIEWS Crop Prospects and Food Situation.
	EnergyFiles.com. Forecasting Oil and Gas Produciton, Consumption and Activity
	The All Party Parliamentary Group on Peak Oil and Gas (APPGOPO)
	M. King Hubbert (Wikipedia article).

Peak Oil: Reports, Journal Articles and Books
	Kramer, F and Lyman, J. (2009). Energy Security: Transatlantic Cooperation and Sustainability. A Report of the Global Dialogue between the European Union and the United States. February 2009. CSIS. Center for Strategic and International Studies. ISBN 978-0-89206-569-1. Online http://www.acus.org/publication/energy-security-report
	The peak and decline of world oil and gas production. K. Aleklett and C.J.Campbell. Uppsala University, Sweden. ASPO Web site www.peakoil.net. 2003.
	The Impact of Peak Oil on International Development, The All Party Parliamentary Group on Peak Oil (APPGOPO) with RESET and Practical Action, 2008.
	The Coming Oil Supply Crunch, by Paul Stevens. A Chatham House Report, Royal Institute of International Affairs, 2008.
	Higher-order Hubbert Models for World Oil Production by P. Berg & S. Korte. Petroleum Science and Technology, 26(2) 2008.
	David Strahan. The Last Oil Shock: A survival guide to the imminent extinction of petroleum man (John Murray, 2007).
	Oil Use and Economic Development in Sub-Saharan Africa, by Kristofer Jakobsson, 2007.
	Peak Oil, Carrying Capacity and Overshoot: Population, the Elephant in the Room, by Paul Chefurka, 2007.
	The Impact of High Oil Prices on African Economies. African Development Bank, Economic Research Working Paper No 93, December 2007.
	The Olduvai Theory: Energy, Population, and Industrial Civilization, by Richard C. Duncan. The Social Contract, Winter 2005-2006. See also: Olduvai Theory Revisited: 2008 Assessment. Video and corresponding web article.
	What You Need to Know about Peak Oil. Article by Rapier on 17 May 2006.
	Beyond Oil: The View from Hubbert's Peak, by Kenneth S. Deffeyes. Farrar, Straus and Giroux, 2005
	Peaking of World Oil Production: Impacts, Mitigation and Risk Management, by Robert L. Hirsch et al., 2005. Also at http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf
	Peaking of World Oil Production and Its Mitigation. Robert L. Hirsch, Roger Bezdek and Robert Wendling. AIChE Journal, January 2006 Vol. 52, No. 1. http://www.misi-net.com/publications/AIChEJ-V52N1-0106.pdf.
	Jake Gordon (April 2004), No Jobs & No Oil: the unsustainability of full employment and cheap energy, online: http://www.jakeg.co.uk/dissertation/
	Hubbert's Peak: The Impending World Oil Shortage, by Kenneth S. Deffeyes. Princeton University Press, 2003.

	Plus over 50 reports available at the Oil Depletion Analysis Centre: Reports and Resources.
Biodiesel
	Biodiesel: web page with links to articles and references on Biodiesel and related energy sources

Page last updated May 8, 2012