Apart from Climate Change, the prospect of resource depletion is the biggest whammy nature could subject humanity to. The two are related, of course, and neither are understood well by most people. It's hard to find anybody on the street who has ever heard of Peak Oil but it's not hard to figure out why: It isn't the most glamorous liquid to own, it's kept largely hidden except when we have to smell it as we fill our tanks, and it's so basic to our lives that it's easy to forget about. It's just there, sort of like nature is there. Occasionally we have to pay attention to it, like when the price rises, but beyond that we can pretty much let others take care of it and pay them to do so.
It's the fact that it is so basic we rarely think about oil. Only when it is absent do we appreciate what it enables us to do. And the list of things that it does or provides for us is innumerable and would take a gigabyte just to list everything. But a couple of facts will illustrate the magnitude of our dependency on the stuff.
Oil is almost pure energy. Energy literally does work for us. In fact, it can be measured in human terms: A gallon of gas does the equivalent of 120 human work hours, or 3 work weeks. One can feel this whenever you have to push your car. If you were to push a car the same number of miles it gets from a single gallon, then you would know in your bones and muscles the amount of work it does. And it isn't only the cars movement that the gas is good for. Every component of the car, from the iron for the frame and the body, the copper for the electronics, the rubber for the tires, the glass for the windshield, and the petrochemical fibers to produce the new car smell has an oil energy input. Anything that comes from a mine or from far away has oil somewhere in it's economic life.
In the U.S., modern industrial agriculture uses massive amounts of oil energy to produce food. For every calorie of food energy produced, ten calories of oil energy are expended. This ratio has steadily risen since the early 20th century, when most of the work was done by animals and farmers. In the 1950's the ratio was 1:1. This has been the true driving force behind the destruction of the American family farm, which could not compete with the more labor efficient industrial processes and corporate capital funding. As the enterprise grows, the more dependent on oil it becomes, for everything from transportation to chemical fertilizers and pesticides derived from oil and natural gas. What would happen to food prices if oil production begins to decline, as it inevitably will, if we continue on the path we're on? What would happen to crop yields if chemical pesticides and fertilizers could not be applied in the quantities needed?
There is nothing controversial about the peaking of oil production. It is a process that is observed in every oil field over it's productive life. Production begins slowly at first, rises to a peak as more wells are added, and then declines as the pressure from the ground drops. Eventually it has to be pumped in order to draw out the oil. As one oil field goes, so do collections of oil fields. A production profile of the United States exhibits the same pattern. The peak came in 1970 at around 11 million barrels a day. Now it produces over half that amount. The U.S. was once the biggest exporter of oil. Now it is the biggest importer, importing over 2/3rd of all the oil it consumes.
Eventually, total global oil production will peak. It is only a matter of time, if it hasn't occurred already.. From 2005 to 2008, global oil production was flat (see chart above), even as prices rose to levels never seen before. Exporting countries had every incentive to increase production but were unable to do so. The reason is simple: Most oil-producing countries have surpassed the peak production. Furthermore, and as a bit of an aside, annual oil consumption is 4 to 6 times greater than new discoveries. In fact, the most oil ever discovered in a single year happened in 1964. We are 45 years later and finding smaller and smaller fields each passing year. So it is only a matter of time before supply levels off and starts to decline. It would appear the leveling has begun.
It's hard to tell what is discussed in the board rooms of oil companies, or communications in the Department of Energy, or what advisors are telling the President of the United States, but it is a subject the public doesn't consider on a daily basis. Like Climate Change, it is a creeping crisis, easy to push out of your mind and ignore until directly confronted with it. But the impact of these two crises are profound and pervasive, and will reveal themselves in both subtle and dramatic ways. But probably the most obvious way peak oil will be seen is in it's impact on the economy. A less obvious way is in it's effect on social complexity. These will be considered in a later post.
Above is a list of oil producing nations relative to peak production.
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