Peak Oil

What is Peak Oil?

Peak Oil is the moment when the maximum amount of petroleum production is reached before it then starts to fall. The concept may be applied to an individual well, an oil field, a country or the whole world.

M King Hubbert predicted that USA oil production would peak between 1965 and 1970 using a bell shaped curve. Various people have tried to refine his model, but all still keep the rapid increase, plateau and then plunge.

It has been written that oil production is already falling in more than 50 countries, as well as Britain's North Sea fields.

So when will the world oil peak come? Some have predicted that has already happened (see this article referring to GM's former chairman and chief executive officer, Rick Wagoner http://www.energybulletin.net/node/39096 ). Whilst many are saying it will be within the next decade.

What are the dangers of Peak Oil?

The world is heavily dependent on oil. We see it in transport whether on the road or in the air - and not just personal transport, but also freight transport for the goods we consume. However oil based products are everywhere - for example in plastics, manmade fibres, packaging materials, pharmaceuticals, paints and building products.

So as the oil reserves are consumed, not just at the current rates but at an increasing pace as developing economies such as China and India need more, it is likely that the price will climb. This is likely to be in fits and starts as rapid price increases have caused economic disruption in the past which temporarily cuts demand, only for it to then heat up again when financial health returns.

There is also the danger that when oil prices fall, producing countries will want to ship a greater volume to maintain their overall budgets. This means that the limited supplies of oil will be used even faster, so when demand returns it is for an even scarcer resource.

Won't an Oil Shortage be good for the environment?

If the more accessible supplies of oil are used and we haven't found ways of cutting our consumption (or using cleaner energy sources), then we will be forced to use more challenging sources of oil. These could be things like the oil tars of Canada. Unfortunately, it is likely that it will take considerably more energy to extract the desired products and consequently will produce more greenhouse gases.

How to find out more:

The DVD we have referred - A Crude Awakening - The Oil Crash (USA Zone 1) - is an ideal way to get an overview quickly. Seeing for yourself oil producing areas that were once assumed to be inexhaustible and are now redundant brings the reality home. It also looks at questions such as whether oil production is a magnet for war, whether oil production lowers a country's per capita income except for an elite minority and whether the oil reserve numbers stated by oil companies and oil producing nations don't add up.

David Strahan has worked for the BBC's Money Programme and Horizon. His book The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man provides an in depth view and makes the startling point that "for every barrel of oil we discover, we consume three". It also has an excellent chapter called "Passnotes For Policymakers".

A history of oil from the 1920s is provided in Andy Stern's Who Won the Oil Wars? It also refers to the role that oil has played in two World Wars, the Suez Crisis, the Iran-Iraq War, the Biafran Civil War and conflicts in Angola and Chad as well as Iraq. Andy has been published in The Guardian and Le Monde.

Finally if you wish to understand more about M King Hubbert's theories, there is Hubbert's Peak: The Impending World Oil Shortage by Kenneth S. Deffeyes. Many ridiculed Hubbert's view at the time they were first expressed, but in hindsight they are brilliant.

Ron Nielsen's The Little Green Handbook: Seven Trends Shaping the Future of Our Planet provides an excellent source of numerical data as well as insightful narrative.

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