Peak Oil in a Nutshell
“It’s quite a simple theory, and one that any beer drinker understands. The glass starts full and ends empty and the faster you drink it the quicker it’s gone”
Colin Campbell
The following is my attempt to explain, in as brief a way as possible, the so-called “peak oil” emergency that the world faces in the near future.
Our generation has lived through a remarkable period in history when oil has been cheap and abundant and, importantly, increasing in use each year. Our transport systems, and anything that relies on them, such as our food supplies, have become almost completely dependent on oil.
It is certain that global oil supplies will reach a peak of production soon; the question is how soon? I’ve tried to show here that it is very likely that the peak will occur within just a few years (some say we are there already). When total production begins to decrease, but demand continues to grow, it is clear that the price of oil will increase rapidly. It is plausible that, at the peak itself, there will be a series of price spikes lasting a few years as the world goes in and out of recession, but eventually as supplies of oil go on a downward path the price will increase continuously and more and more shortages will occur. This will hit us in the developed world far more than elsewhere, because of our sheer dependency on oil. When this happens we need to have already made preparations for a much lower energy lifestyle. The goal of transition communities is to start making these changes to our lifestyle now, in such a way that we can use the opportunity to improve the way we live our lives.
It seems to me that a single graph carries most of the information required to understand peak oil.
Take a look at the following:
Several points can be made:
The blue graph (strictly a histogram) is a plot of amount of oil discovered globally since 1930, and represents the total quantity of oil that has become available to us. Each thin blue rectangle represents the reserves of oil discovered in a particular year. If you add up all the thin blue rectangles the quantity will come to approx 2000 billion barrels of oil. This represents approximately the total amount of oil that’s ever been available: oil already used up, and oil still in the ground.
What is obvious is that the quantity of oil discovered in a year peaked in the early 1960′s. Since then, on average, there has been less and less oil discovered each year (although there have been some smaller peaks). It seems highly probable that this trend will continue.
The black line (which is also strictly a histogram) represents the total amount of oil extracted and used each year. An obvious feature of this is that it has been increasing each year since the 1930′s (except for a short period in the 1980′s). Much of the recent increased usage comes from the growth in the Chinese and other non-Western economies. The area under the black line (from 1930 to the present day) is about 1000 billion barrels of oil, and represents the total quantity of oil we have used until now.
An important point to note is that, up to the early 1980′s, more oil was being discovered every year than was being produced. After that more and more oil has been used each year than has been discovered, until now four times as much oil is being used up as is being discovered.
The conclusion from this is that we have used up about half the available oil in the earth, unless there happens to be, by pure chance, any major oil discoveries still to be made. The yellow histogram above shows the best guess at the size of future discoveries.
It is certain that the black line will flatten and begin to track downwards sooner rather than later. At this point demand will overcome supply and the price of oil is likely to increase rapidly.
(some useful figures: The world uses approx 84 million barrels of oil a day – i.e. 1 billion barrels in 12 days. Therefore if we were able to continue at current usage - even without any growth – we would, in any case, use up the remaining 1000 billion barrels in 30 – 40 years)
It is true that once the price of oil becomes sufficiently high then oil that is more difficult to extract becomes viable, but the demand for oil at present is so high that these relatively small extra reserves will only add another year or so before the peak is reached. Also it is often claimed that oil from tar sands or from coal conversion will make a big difference. A further problem arises here: these are very dirty processes and much CO2 is given off – which doesn’t do a great deal for climate change! Also the energy input required to extract the oil becomes comparable to the energy output from burning the oil, i.e. the net energy return becomes very small (some claim that it becomes negative).
