You may or may not have heard of the concept 'Peak Oil' by now. It is something you are likely to hear a lot more about in the coming year. The concept is basically that there is a limited amount of oil in the ground; at some point we will reach the peak of oil's availability and that from there our ability to extract it will decline. Imagine if the amount of oil extracted is shown as a line graph that travels up to a peak and travels back down. The question is: where are we on that line right now in 2008?
Some people have gone on to surmise that since so much of the world's economy depends on the availability of oil, that the dwindling supply will lead to chaos, wars, and the complete breakdown of society as we know it. British energy economist David Fleming was quoted as saying "Anticipated supply shortages could lead easily to disturbing scenes of mass unrest... For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society."
In October, a German-based research group called the Energy Watch Group released a report claiming that global oil production peaked in 2006. Their data comes from studying current and past oil production levels. On the other hand, the International Energy Agency, the energy policy adviser to 27 member countries, including the United States, believes that oil's peak is far in the future.
With the chief executive of General Motors, Keith Wagoner, giving a speech this week stating that oil has already peaked, (according to the Australian television station ABC Victoria. You can learn more by watching the video on the link.) I predict that this will soon become a hot topic. As for the total breakdown of society, I prefer to think that running out of oil will necessitate major lifestyle changes for much of the world's population, but that it will ultimately change things for the better, forcing municipal governments to invest in mass transit and a pro-bicycling infrastructure.
Sunday, January 20, 2008
Peak(ed?) Oil
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I also think the nightmarish scenarios proposed by some "peak oil" theorists are unlikely— but only if more corporate leaders, such the GM exec, start talking seriously about energy alternatives and changes such as the ones TFE describes. I just don't believe that the total supply of oil would decrease at such a rapid rate that world economies and societies couldn't find ways to adapt. The pessimistic view that has us reduced to anarchy a'la "Mad Max" seems like fear-mongering more than anything else. Social and market forces are capable of responding to great change, even in times of uncertainty and stress (...but before anyone accuses me of being a closet neoliberal, I should point out that Iraq's "reconstruction" shows that to be an equivocal statement.) I take a major American corporate CEO's acknowledgment of peak oil to be an early sign of positive change, rather than a harbinger of incipient armageddon.
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