Peak Oil is Here, and Conservation is Nowhere in Sight

 2004 Scenario Peak Oil
The latest production data analysis by the Oil Drum makes it clear that we are now at the peak of oil production (about 85 mbbd or 30 bbby), and we can expect a rapid drop-off over the next twenty years (back to about 60 mbbd, 1980s levels, by 2030, but shared among almost twice as many humans as were alive in 1980), and a radical and involuntary change to our way of doing almost everything, as described in Jim Kunstler’s Agenda

There are two things we can do in response to this. The first, which we are already doing, is to try to stretch the peak out to a plateau. The problem with this is that new production is increasingly expensive to bring on-line. This isn’t just a matter of throwing more money at the problem. It’s a matter of throwing more energy at it, as this chart shows:

 Oil Charts
The amount of energy needed to produce each barrel of oil has increased from the equivalent of 0.04 barrels at the start of the oil boom (when we were busy converting our economy to be oil-powered) to over half a barrel today. If this trend continues (and there is nothing to lead us to believe it won’t), by 2030 we will be using more than a barrel of oil equivalent energy to produce every barrel of oil. If that sounds crazy, it is, but consider this:

  • The oil consortium building the Mackenzie Valley gas pipeline has acknowledged that their passion for this project isn’t to deliver more natural gas to consumers, but to use the relatively clean natural gas (setting aside the potential ecological disasters the Mackenzie Valley project promises for Canada’s Arctic) plus nuclear power to power the extraction machinery for Canada’s eco-holocaust, the Alberta Tar Sands, which are now being counted on by oil analysts to produce ten times the volume of dirty oil (and environmental destruction) they are currently producing, and which are already consuming vast amounts of energy and water at current production levels.
  • The Russian energy department is proposing to build underwater nuclear plants to power underwater deep-sea oil drilling platforms (reported on CBC radio news today, report not yet online).

So to slake our insatiable thirst for the liquid stuff, we’re prepared to construct colossally expensive and dangerous nukes and vulnerable gas pipelines through fragile permafrost, to produce less energy than the projects that power them consume. Just so we can get it in a form we can dump in our gas tanks.

The same folly lies behind the use of corn as a bio-fuel ñ it costs more energy to grow, fertilize, harvest and convert corn into fuel than the fuel that it produces gives us, but we’re willing to do it because we’re utterly dependent on liquid hydrocarbons. How is this economically viable? Because we the taxpayers are subsidizing it (through agricultural and other subsidies, financing of wars to keep the Middle East destabilized and oil prices artificially low, tax gifts to rich corporations, and indemnifying the corporate plunderers producing the oil from the costs and damages they are causing to our environment). We are paying Big Oil and Big Agribusiness for the privilege of letting them keep us addicted to liquid fuels and an unsustainable way of life ñ for a little longer.

Eventually the stress of this system will pass the breaking point, and the combination of global warming disasters, skyrocketing prices, global oil wars, ecological devastation and massive vulnerability to sabotage, natural disasters and system breakdowns will catch up to us. Then the plateau will end quickly, and it will be worse than just a normal curve downslope ñ it will be like falling off a cliff.

The other thing we can do, of course, is to wean ourselves off our addiction to oil. A recent study suggests that corporations can, on average, reduce their energy costs by four times the cost of the reduction programs. And most citizens seem prepared to change if it can be done relatively painlessly, or if it becomes too painful to continue to squander oil (as the inverse correlations between SUV demand and oil prices demonstrate). As Amory Lovins recently showed, government utilities can actual save money by giving away compact fluorescent bulbs, and replacing hot water tanks with European style instant hot water dispensers could pay for itself in less than a year. George Monbiot’s Heat has a hundred other viable ways to conserve.

But the lack of political will to be a true leader, the first to make hard decisions that neither corporatist campaign funders nor financially struggling citizens will be too fond of, is evident everywhere, especially in the most extravagant users of oil (North America), and in the struggling nations of the world (notably Asia).

So we have a choice: Stretch the End of Oil out a little longer, at tremendous financial and ecological cost, and face an even worse and protracted withdrawal crisis after that, or begin now to seriously change our lifestyles, everything we do, our very way of thinking. Since it is human nature to do only what we must when we must, this is not really a choice at all. We will continue our short-sighted attempts to put off the fall of the oil economy until we are poised on the edge of the cliff with no way back. Only then will we embrace conservation seriously.

It’s going to be ugly for our grandchildren. We’re lucky we probably won’t bearound to have to face up to them for what we’ve done.

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14 Responses to Peak Oil is Here, and Conservation is Nowhere in Sight

  1. Bharat says:

    Hi Dave, thank you the interesting post. Conservation and Efficiency by themselves are not a full solution. They have to be accompanied by a strategy to reduce the *net* usage of fossil energy in the economy.Let me explain. If just conservation and efficiency are implemented, we will be saving energy in each those programs (say by using energy efficiency bulbs or hybrid cars). But, the energy savings remain with the consumer and they will eventually work their way back to the economy through other consumption (which ofcourse consume energy). So, we have merely become efficient in one aspect, but trasferred their gains to consume in a different manner. Net-net the energy use within the economy will remain the same or infact more, because of stimulation to economy from those savings. So, the strategy has to include a disincentive to use fossil energy at all, in form of carbon tax, which will stimulate less fossil energy use in *overall* economy.

  2. lugon says:


  3. Raging Bee says:

    “Nowhere in sight” my ass — at the very least, I’m seeing Priuses all over the place (but then, I just bought one, so I may be a bit biased there), and electric cars are starting to get more usable. And those energy-saving lightbulbs? California is thinking of banning the old incandescent bulbs. Wind-power is looking stronger too.Also, if nuclear power is as expensive as you assume — but seem unwilling to prove — it is, then why are so many corporations taking a second look at it? A cleaner energy source than coal, oil, gas, dams, etc. perhaps? They’re not just thinking of using it to power oil rigs.Another thing you fail to mention is Hugo Chavez selling oil to poor Americans via Citgo, well below market rates, to curry favor and bolster his own political position. (You can’t have missed that — they’re advertizing it all over TV!) A nice gesture, but it doesn’t exactly encourage conservation, or make the development of alternative energy sources feasible.Finally, the following passage completely sinks the credibility of your thesis:…financing of wars to keep the Middle East destabilized and oil prices artificially low…These two goals are contradictory: instability in an oil-producing region makes oil more expensive, not less. And anyone who actually has his/her eyes open would know that Bush is not invading Iraq for EITHER of those reasons.

  4. Bharat says:

    Raging Bee, please read my post above. Efficiency with priuses, light bulbs mean nothing if the overall economy continues to increase its *net* fossil energy use. check out this statistic from US Dept of Energy: to the column “fossil fuels” under consumption. we stand at 85.96 Quadrillion BTU’s. Be sure to notice the trend all the way from 1949 to 2005.Please report back what you think.

  5. Raging Bee says:

    Efficiency with priuses, light bulbs mean nothing if the overall economy continues to increase its *net* fossil energy use.Excuse me, but ANY activity that decreases the amount of energy used for a given activity is helpful — especially when the activity is as common as driving a car or turning on a light — though some savings are, of course, more noticeable and significant than others. Large savings can be built on lots and lots of small changes. And even if all we see is a decrease in the rate of increase, that’s better than no such decrease. Not enough, to be sure, but better. You gotta start somewhere…

  6. Bharat says:

    Dear Raging Bee, you are not seeing my point. It is good that people drive prius. It will *decrease* the energy used for transportation. But, the consumer now has extra money in his pocket because of the saving on gas. He spends the money on something right ? say, he buys an ipod. What happened ? you transferred the savings from transportation into energy consumption for manufacturing an ipod. so, the overall consumption of energy has remained the same, if not increased. Even if you put the money in a bank, it is going to stimulate the economy, because banks are going to give your savings as loan to someone else. So, my point is, driving a prius is a good thing. But, it’s only a part of solution. It has to be accompanied by a carbon tax so that the gains from your energy savings don’t go back to your pocket to spend on something else but go to the government which should then spend that money to promoting alternative energy. Only then you have complete solution and a decrease in overall consumption of fossil energy.

  7. Joe says:

    This is a good article and discussion. I think it is both true that it is necessary to increase the amount of clean energy used (Raging Bee’s point) and that we are likely to consume more energy in general over the years (Bharat’s point).I do agree with Dave’s main thesis that we have to consume less fossil fuel, as it will become more expensive in the years to come.

  8. Joe says:

    Bharat,In this statement, aren’t you assuming that all activities consume the same relative amount of energy? “What happened ? you transferred the savings from transportation into energy consumption for manufacturing an ipod. so, the overall consumption of energy has remained the same, if not increased.”I am not sure how much energy that manufacturing an iPod requires. However, less energy is used to print up compacts discs the more that people are downloading music to their iPod. CDs use quite a bit of petroleum to create the plastics that the music is burned to.

  9. Raging Bee says:

    First, Bharat, your response to my point sounds dangerously close to saying “We can’t trust people to spend money, otherwise they’ll spend it on something contrary to our agenda!” Do you really want to play into the Republicans’ hands by reinforcing their stereotype of nanny-state libruls?Second, governments can waste money (and energy) too, especially when they’re doing something ostensibly good that few people are willing to criticize.Third, I agree that there’s a place for taxing bad activities and using state power to develop alternative technologies; but no such alternative will even be tried on a sufficient scale unless, and until, people CHOOSE to pay for it, and find it profitable or beneficial to do so. Sooner or later, you have to face the market in the real world.

  10. Bharat says:

    I’ll just make a couple of quick points.Joe, agreed. There are some calculations involved there about how much energy the savings consume. But, the bottom line is dollar savings from efficiency gains are like tax cuts into your pocket. They always stimulate the economy, and without altering the relative competitiveness with carbon tax, fossil energy will the choice of energy for economy.Raging Bee, Agreed with your point about Govt spending. Dr.James Hansen (and others) propose a revenue-neutral carbon tax. I.e, the increase in carbon tax is compensated by decrease in other tax like income tax. So, govt income reamins the same. Even this will do the job of making alt energy more competitive with fossil energy in a “free” market. You may ask how it is free market with carbon tax. Thnk of carbon tax as the price imposed on fossil energy to clean up it’s pollution. So, what we have today infact is an unfree market with fossil energy getting away with pollution without being charged.

  11. Duker says:

    Raging Bee said: “Third, I agree that there’s a place for taxing bad activities and using state power to develop alternative technologies; but no such alternative will even be tried on a sufficient scale unless, and until, people CHOOSE to pay for it, and find it profitable or beneficial to do so. Sooner or later, you have to face the market in the real world.”If this is the case, then we are truly doomed as a civilization. If we leave the fate of our world to the “market in the real world”, then decisions will continue to be made with the intention of only to profit or improve one’s own situation. We have time and again that the “free market” will never take into account environmental or health costs. There are times when we need to make decisions based on other factors besides the almighty dollar. If people won’t do this on an individual basis, then it is the responsibility of our governments to make important decisions even if it means higher costs to ourselves, but for our own good. Many improvements have been legislated to save us from ourselves: unleaded gasoline, ozone-depleting substances, catylitic converters, coal emission scrubbers. We need to continue to make more legislative measures for the betterment of all – in spite of the “free market”.

  12. Richard Bell says:

    There is a formal name in economics which describes the phenomenon at issue here, Jevons Paradox. Here’s the Wikipedia definition:”In economics, the Jevons Paradox is an observation made by William Stanley Jevons who stated that as technological improvements increase the efficiency with which a resource is used, total consumption of that resource may increase, rather than decrease. It is historically called the Jevons Paradox since it ran counter to Jevons’s intuition, but it is well understood by modern economic theory which shows that improved resource efficiency may trigger a change in the overall consumption of that resource. The direction of that change depends on other economic variables.” many of the other problems we face in today’s world, the ultimate answer involves developing an economy that is not based on the continuation of never-ending growth in energy consumption.

  13. Raging Bee says:

    Many improvements have been legislated to save us from ourselves…Yes, and after such legislation is passed, it’s still up to the market to find the best technical means of complying with the legislation. New laws create the demand, but private business still creates, tests, improves and markets the actual “improvement,” whether in response to individual demand (i.e., in response to higher oil prices or disgust at what OPEC does with our money), or in response to new laws (i.e., higher fuel-efficiency standards). This is why most of the technology that will “save us from ourselves” has come from advanced capitalist countries.

  14. Where to live in this world to come in the urban oasis or amidst the remnant forest.I cannot decide.I read you, Dave, through a reader. Your writing is honest and provokes my mind into seeing past what is to what really is. I’m Feeling sad about this situation and find solace in knowing, none of us are alone in this. A lot of us are living greener every day. The onions just began popping up through the ground from whence I planted them a few weeks back. One small onion at a time, grown amidst brick and mortar will we urban gardeners survive.Nice to meet you Dave. :)

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