Terminology Exchange
Peak Oil
by C. J. Campbell www.aspo-ireland.org
The issue of Peak Oil attracts growing interest throughout the world being prompted in part by soaring oil prices.
As every beer-drinker knows, the glass starts full and ends empty, also recognising that the quicker he drinks it, the sooner it is gone. The same applies to oil and gas, which are finite natural resources, formed in the geological past. The impact of natural depletion would be entirely self-evident were reliable information available to the public, but as it is, the essential data are obscured by ambiguous definitions and lax reporting practices, some influenced by commercial, financial or political vested interests. Great credit therefore goes to Exxon-Mobil, whose director published valid industry data on past discovery, which reached a peak in the 1960s, when smoothed with a three-year moving average ( Longwell H.,2002, The future of the oil and gas industry: past approaches ,new challenges; World Energy 5/3 2002).
The world started using more than it found in 1981 and the gap is widening as it digs into its reserve base from prior discovery. This peak in discovery, some forty years ago, now delivers the corresponding peak in production. Much debate surrounds the precise date of peak, but it misses the main point which is the vision of the long decline to eventual exhaustion that comes into sight on the other side of it.
In other words, while we are certainly not about to run out of oil and gas for many years to come, we do face the end of the First Half of the Oil Age. It lasted 150 years and saw the rapid expansion of industry, transport, trade and agriculture, allowing the population of the world to expand six-fold with the help of this new source of abundant, cheap and convenient energy. It also saw that the rapid growth of financial capital as banks lent more than they had on deposit, confident that Tomorrow’s Expansion, driven by cheap energy, was collateral for Today’s Debt.
We are ill-prepared for the Second Half of the Oil Age which now dawns, threatening to be a time of great economic and international tension, with control of remaining oil supply, even by military means, being one of the key factors. We may have to witness a stock market crash because virtually all quoted companies are over-valued because their accounts tacitly count on continued business-asusual supply of cheap energy which can no longer be assumed. It is possible that A Second Great Depression may arise from this turning point in history. There is much at stake, which perhaps explains why the official and international organisations with responsibility for the subject are so reluctant to address the issue squarely, placing unsubstantiated hopes on economic factors and miracle technology to come to the rescue. It is easy for them to exaggerate the resource base given the grossly unreliable nature of public reserve data. The industry already uses extremely advanced technology, sufficient to identify and test the smallest and most subtle of prospects, so the scope for still more development diminishes. Small oilfields are already highly profitable so the additional reserves made viable by high prices are likely to be too small to have much global impact.
This is not however necessarily a doomsday message, as a new more benign age may open after the difficult transition providing people with simpler, more satisfying and sustainable lives. They will come again to live within the Planet’s ample current resources, having consumed those laid down in the geological past.