A Middle Earth Journal Encore Performance

A year ago there was little discussion of "Peak Oil" in the blogosphere™. Today there are a number of blogs dedicated to the discussion of the topic including:

• The Oil Drum


• Peak Energy(Australia)


• Peak Energy(US)

And many more that you can find in the blogrolls of the above.

Here is an encore performance of a post I did on July 04, 2004.
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Oil, Half Way To Empty




Aaron Naparstek has an excellent summary of the world oil situation in his paper THE COMING ENERGY CRUNCH. There is nothing new for those who have been following this story with the exception of a frank discussion of the consequences some of which are startling.

The Peak
In the beginning there was Shell geologist M. King Hubbert who in 1956 predicted that oil production in the U.S. would peak and start to decline in the early 1970’s. Of course he was labeled an alarmist nut case; know one wanted to hear such nonsense. In 1970 the production in the lower 48 states was the highest it had ever been and dropped sharply after that. Dr. Colin Campbell and others used Hubbert’s methodolgy to calculate when world oil production will peak and begin to decline. Forcasting Global Oil Supplies(Note: a very technical pdf). Their conclusions predict the peak will occur in 2005 or 2006 and decline from that point on. Specific countries are discussed in both the Naparstek and Campbell papers.

The Consequences

So, what happens when oil is over $100 a barrel? This will probably be the case by the end of this decade. Of course it will impact transportation but that’s a lot more than driving smaller hybrid cars, car pooling and taking mass transit. According to social critic James Howard Kunstler it will impact the very fabric of the world economy including agriculture, manufacturing and retail trade. As Kunstler describes it in the Naparstek paper:

"The whole Archer Daniels Midland model of turning oil into corn into Taco Bell—that whole complex, that system, is really going to be over," says Kuntsler. "We're going to be forced to grow more of our food locally and return to a kind of agriculture that really hasn't been practiced here in a long time. A lot of the land that has only had value as suburban development in the past 30 or 40 years is going to have to be reassigned."



Likewise, Kunstler foresees "the demise of Wal-Mart style, big box, national chains." Companies whose profit margins depend on "merchandise made by factories 12,000 miles away" simply won't function in a world of $100-plus barrels of oil. "We're going to have to seriously reorganize our whole system of retail trade and economy."

We can’t expect Bush or the Republicans to prepare us for this, it’s not in the short term interest of their corporate patrons. The Democrats and Kerry are also unwilling to be the bearers of the bad news. It’s like global warming, lots of finger pointing and no preparation for the inevitable.

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Note
A year latter it appears that $100 a barrel oil is even closer than we thought.