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Newsletter 31 : 8 - BYE BYE PETROLEUM

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With demand for oil soaring yet supply stable at best, the idea that oil stocks have 'peaked' is increasingly influential. So what are the latest theories around peak oil? B Leamy reports.

Around two hundred scientists, economists, analysts and academics attended the 5th International Workshop on Oil and Gas Depletion in Italy this month. Organized by the Association for the Study of Peak Oil (ASPO), this event moved on from their previous conferences, which concentrated mostly on providing evidence and attempting to forecast an actual date. This year, most of the invited speakers considered that the argument had now been won and were instead focusing more on possibilities for mitigating the consequences of the coming end of cheap oil.

Colin Campbell, honorary chairman of ASPO international, began the conference with a prediction that peak oil would bring a succession of price spikes followed by global recession. He warned that current financial structures would be threatened, as the power to control money shifts, and suggested that a new era of geopolitics would emerge, with energy rich Russia ascending while energy depleted US and Europe compete with China for finite resources.

Charles Hall, a professor at the State University of New York, told those gathered that oil production is beginning to experience diminishing energy returns as crude becomes harder and more expensive to find. A yield of 100 barrels for every barrel invested was typical in 1930; the ratio had dropped to 30 to 1 by the 1970s and has now plummeted to 15 to 1 or less. 'It doesn’t matter how much you find if it costs you a barrel to get that barrel', he said.

Commenting on the conference, Chris Skrebowsky, editor of Petroleum Review, said, 'What is becoming ever clearer is that Peak Oil is just one component of a range of challenges confronting our societies and our way of life - climate change, food supply, water resources and energy resources.'

Dennis Meadows, author of Limits to Growth, told ASPO-5 that almost all of his 35 year old predictions of ecological collapse are coming true. 'We're facing a lot of peaks and oil is just one of them. We are also drawing down our fertile soils, groundwater, and forest stocks.' Meadows is pessimistic about our collective ability to address these issues. 'Politics, with its short-term election cycles, just isn’t equipped to deal with problems that demand short- term privation. That’s why collapse occurs. We are fundamentally unable to do the things we must do to avoid collapse. Sustainable development is possible, but not likely, and probably too late', he said. Meadows claims that collapse is not inevitable, but it will very tough to avoid. 'There is no possibility that alternative energy sources will rise fast enough to offset the decline in oil', he said. According to Meadows, 'Global society will most likely adjust to limits by overshoot and collapse, not by growth.'

Richard Heinberg, author of The Party's Over: Oil, War and the Fate of Industrial Societies and Powerdown: Options and Actions for a Post-Carbon World was on hand to promote his new book, or more importantly, to promote what he hopes is a plan for a sensible energy future in the form of the 'Oil Depletion Protocol'. This protocol was originally put forward in 2002 by the prominent petroleum geologist Dr Colin Campbell and aims to obtain agreements from countries to reduce oil imports and exports by a specified amount each year, about 2.6 percent. By doing so signatory nations would help mitigate the negative consequences of an over-reliance on cheap oil and help prepare for a global decline in the world’s oil supply.

According to those backing the idea, if the entire world adopted the Protocol, global consumption of oil would decline by almost 3 percent per year, stabilize prices and reduce competition for remaining supplies. Personally I find it highly unlikely that the more powerful nations would choose to sign up for such an agreement rather than attempt to utilise economic or military force in order to secure their own self interest.

Chris Skrebowski, the editor of Petroleum Review, said, 'collectively, we're still in denial.' Based on projections focusing on oil flows instead of reserves, he boldly stated that, 'We have 1,500 days until peak and tomorrow we'll have one day less.'