A decline in production is imminent and there is no replacement that can be used for transport

The importance of oil

Oil is an extremely useful type of fuel since it is easy to transport, remains liquid at ambient temperatures and above all because of its high energy density per unit volume (a small 25 cl bottle of oil contains enough energy to get a car up to the top of the Eiffel Tower). It is the fuel which has made the biggest contribution to the development of industry and is used as a raw material in many types of plastics, chemical products and building materials. It accounts for 40% of all primary energy consumed in the world today, and more than 90% of the world’s transport operates using oil by-products. One of the most important and least known uses of oil is for food production. Oil enabled the mechanisation of agriculture, the extension of irrigation and the production of pesticides and fertilizers. It was this that gave rise to the Green Revolution, which in turn made it possible to multiply agricultural output in the short term, albeit at the expense of making agriculture dependent on a finite resource and jeopardising the land in the long term.

Hubbert, the discoverer of peak oil

It was the American geoscientist Marion King Hubbert (1903 – 1989) who invented the expression ‘peak oil’. In a famous lecture he gave in March 1956 at the annual convention of the American Petroleum Institute in San Antonio, Texas, Hubbert announced that oil production in the United States would continue to grow before peaking around 1970 after which it would go into an irreversible decline. At the time he was laughed at, but in fact US oil production did indeed peak in 1971 and has not recovered the same volume since.
Hubbert’s peak theory predicted that, for any given geographical area, from an individual oil field to the planet as a whole, the rate of petroleum production of the reserve over time would resemble a bell curve which reaches a maximum (i.e. peaks) when approximately half of the original resource remains, and thereafter begins to fall.
Calculations of the oil peak are very sensitive to two variables: the total quantity of oil believed to exist underground and “aboveground” events. Thus while Hubbert appeared to have made an extremely accurate forecast of the amount of oil which the US has underground, he was not so successful with geopolitical events which had a decisive effect on world oil production in the shape of the two oil crises in the 1970s and the 1980s. It is for this reason that his prediction of a world oil peak in 2000 will be delayed by around a decade.

The official version

Recent reports produced by the International Energy Agency (IEA) have led it to express its concern about the problems that will be involved in meeting the demand for oil from 2012 on. The reasons outlined by the IEA are a fall in surplus production capacity, the decline in oil production outside OPEC, and “aboveground factors” such as delays in exploration and production, the lack of qualified engineers, the concentration of oil reserves in politically and meteorologically unstable areas, and an inadequate contribution from oil-substitute liquids such as biofuels and non-conventional oil (oil which is not found in a sufficiently liquid state and which requires much greater efforts when it comes to refining).
The problem with the non-conventional oil which has been found in large quantities, such as heavy oil in Venezuela and tar sand in Canada, is that technological and geological factors mean that extraction rates are extremely slow. As a result it cannot be used to replace the production of conventional oil but instead can merely prolong the latter’s decline.
Hence, and even though it has taken some time to come to this conclusion, the geological factor is undoubtedly the one which determines all the others.
An example of the importance of the geological factor is the progressive exhaustion of world oil reserves which is leading to an ever increasing concentration of these reserves in particular areas. 70% of oil reserves are to be found in the Middle East and the Caucuses, where there are many places that are either already at war or in a constant state of alert in case it breaks out. The site of the current conflict in Georgia, for instance, is a crucial part of the route of one of the biggest pipelines that bring oil to Western Europe.
Even though technology may improve oil exploration and production, not even the most technologically advanced countries such as the US have been able to turn around the decline in their oil production

(Figure 1) Oil and gas peak in the world (source: ASPO International 2006)

Are we at the peak?

It is extremely difficult, if not impossible, to forecast the exact date on which peak oil will occur. Nonetheless, the Association for the Study of Peak Oil and Gas, ASPO International, which is the main source of independent information, places the peak during or before 2012 after taking into account factors such as the total quantity of recoverable oil and how oil reserves will be turned into production flows. This latter distinction is of supreme importance.
Even though people often talk about oil reserves and how long they will last, what is really important in practical terms is the quantity of these reserves which we can use on a daily basis.
The rate at which we can extract this resource is not constant and nor can it be forced upwards without incurring prohibitive costs or damaging the oil fields (and thus ensuring that we cannot extract maximum oil from them in the future). World oil reserves are not like an enormous fuel tank which can be emptied in one go until it is completely used up. Instead production follows a bell curve, and what we need to know is when we will get to the top of this curve and most of all how quickly production will then fall.
According to a study by the US Department of Energy, 20 years’ advance preparation would be needed to deal with the peak in world oil production without experiencing serious problems. That means that we have already run out of time to get ready for a world in which, for the first time in its history, oil production will start to irreversibly diminish and where we do not have a source of energy of better quality to replace it. Moreover, burning fossil fuels produces emissions into the atmosphere which have been shown to be the cause of the greenhouse effect and hence global warming. Thus the conclusion is that either as a result of problems in supply or because of its consequences, there is a need for a change away from our current fossil fuel energy model.
Moreover there are other signs that would suggest that the “pessimistic” forecasts of a peak in the immediate future are accurate:

• Since the 1960s oil finds have been declining; today we use 4 barrels of oil for each one we find.
• It is very likely that the upward adjustment of oil reserves by OPEC towards the end of the 1980s, when many countries saw their reserves double, were false (these figures enabled them to raise daily production levels and thus increase their short-term profits).
• Coinciding with the rise in prices, the production of conventional oil has been technically stagnant since 2005 at 74 million barrels a day (mb). Even maximum production of all liquids up until now (including liquefied gas) is facing serious growth problems; between July 2006 and the maximum level of 86 mb achieved in 2008, it has risen by just 0.5 mb.
• The number of scientific research studies that argue we are at the peak or that the peak will come along before 2010 has grown significantly in recent years.

Aggravating factors

Other factors may speed up the energy crisis in addition to peak oil. For example, fuel scarcity may occur way before the peak as stagnant supply is unable to keep up with growing demand. It is this, if not the peak, which is the reason behind the spectacular growth in the price of oil that we have seen over the last five years, and which this year has almost reached $150 thus exacerbating the world economic crisis. In fact at present we are faced with a dilemma: it is precisely the economic crisis which causes prices to remain stable or fall because it reduces the consumption of fuel and this may push back the date on which the geological decline of oil begins, yet this is at the cost of serious consequences for the most disadvantaged people in the world. Thus the economic crisis and the energy crisis are intertwined.
It should also be borne in mind that the rate of decline in exportation will be greater than the rate of decline in production, as producer countries give priority to domestic demand.
This, for example, is happening in Russia, one of the top two producers in the world and which has strongly growing domestic demand. In turn this will exacerbate the problems being faced by countries which are most dependent on imports and will come to be a real bottleneck in the global energy crisis.
In fact, the decline in exports has already got underway, and this chart shows that the amount of oil available on the world markets has gradually fallen since 2005.

Chart showing oil exports in relation to prices from 2001 to the present. (source: theoildrum.com)

Finally a number of different reports also place the peak for gas, coal and uranium at around 2020, which means that we will not be able to count on other finite and fossil fuels to replace oil.
It is especially important to realise that nuclear energy is not an alternative. This is due to several factors: the diminishing supply of uranium, its economic cost which grows exponentially as oil becomes more expensive, the health hazards its production entails and finally because we have no solution to the problem of what to do with nuclear waste. There is also the consideration that it only generates electricity and hence is not an option for replacing oil, and that moreover there are many other renewable, cheaper and safer options available for producing electricity.

The problem of the alternatives

The first sector to be affected by peak oil will be transport; indeed the crisis we are facing is more one in liquid fuel for transport rather than a crisis in electricity supply. Nowadays there are no real alternatives to oil in transport. Biofuels, according to the IEA, will never meet more than 10% of demand for transport, and even then at the risk of bringing about a large-scale food crisis. Electrification in this sector would call for major structural changes (renewal of vehicle fleets and infrastructures, an increase in electricity generation capacity) which cannot be put in place quickly enough given the proximity of the fall in oil production.
Given this backdrop of environmental, economic and energy supply risks, the most sensible thing to do would be to reconsider far-reaching structural changes in our energy model. However, this means not only the replacement of some energy technologies by others but also reviewing what we use energy for, how we consume it, who consumes it and why.
Bearing in mind that the industrialised world is built on fossil fuels which account for more than 80% of the world’s primary energy, and that this energy consumption model cannot be exported to the rest of the world due to physical limitations, we need to review our economic and social growth models and move towards a low energy world by cutting down on our consumption of energy, making efficient use of it and fostering renewable energy sources. This strategy will have to be based on the only reliable long-term sources that we have (solar energy in its different forms, wind, solar thermal, thermo-electric and photovoltaic energy) but also on the decentralisation of energy production which prevents wastage in distribution and which would be a genuine alternative to the MAT (the proposed very high voltage line between France and Spain) which only means growing as we have done up until now.
It should be borne in mind that building these alternatives is dependent on oil and coal, as these energy sources are used by the heavy industry which makes wind turbines, solar panels and so on. However, though the cost of the changeover will become progressively higher and higher, nevertheless we need to use what oil we have left to push ahead with it.
Given the current addiction to economic growth and the unwillingness of industry to change, the world is continuing to march along the wrong path. This would suggest that the difficult changeover to renewable energies, decentralisation and low consumption lifestyles will only be possible if we can build another economic system which does not tend towards the centralisation of power, constant growth and the subsequent overburdening of the planet.

Links for reference and further reading:

• http://www.oceas.org
• http://www.tanquemlesnuclears.org
• http://www.crisisenergetica.org
• http://www.peakoil.net

The great peak oil event in Barcelona

For the first time in Catalonia, the VII International Meeting of ASPO, the Association for the Study of Peak Oil and Gas, will be taking place in Barcelona from 20 to 21 October this year. The event is to be attended by hundreds of scientists who have years of experience in this issue, and they will share figures and thoughts that will help us to determine what the future availability of fossil fuels around the world will be.
Increasing numbers of journalists, government experts and political leaders also come along to these meetings as what was once seen as just a theory is now accepted as proven fact; the imminent decline of black gold.
More information: http://www.aspo-spain.org