Peak Oil News: 12/01/2005 - 01/01/2006

Friday, December 30, 2005

Growing Our Fuel

Falls Church News-Press

It is time to revisit the question of using biomass as the feedstock for our liquid fuels, as it is looking more and more like we will have few other choices.

While converting coal to liquid fuels is possible and obviously popular in coal producing states, there are limits on how far coal can go to replace oil as a source for liquid fuels. If coal consumption increases rapidly to meet the need for liquid fuels, then our estimated 250-year supply would quickly turn into a 50-year supply and we would be back where we started. Converting one fossil fuel into another may be a reasonable short-term transition strategy, but it is not going help our grandchildren.

Before going further, it needs to be pointed out that, at present, there seems to be no way growing fuel can make up for the 325 billion gallons of petroleum products the US uses each year.

Even if we take the most optimistic projections, that the US can produce 1.5 billion tons of biomass (plant and other organic material that can be converted into ethanol) per year, and assume we can process 100 gallons of ethanol out of each ton, we only come up with 150 billon gallons of liquid fuel per year.

Therefore, there is simply no alternative to massive conservation efforts both in the short and long run. The US can no longer be a consumer of 21+ million barrels of oil per day— especially with our natural gas supplies showing signs of running low.

Many are skeptical we can ever grow a significant portion of our fuel needs, as biomass currently is contributing only about three percent of US energy consumption. However, recent studies and research breakthroughs offer hope.

Last spring, a joint study prepared by the US Departments of Energy and Agriculture concluded the country could remove some 370 million dry tons of biomass from our forests each year and could grow an additional billion tons of biomass on agricultural land on a sustainable basis. If this proves to be the case, it appears the raw biomass would not be a problem.

How might a large scale biomass-to-fuels industry work? First, growing and processing biomass is going to be a local industry compared to the way our oil companies currently work. Hauling millions of tons of grass or tree branches across the country to large centralized processing plants will not work because you would use a large portion of the fuel you are trying to make hauling the raw material to a distant processing plant. Thus, growing and processing biomass into fuel is going to be a cottage industry with hundreds or thousands of small to medium sized processing plants scattered all over our rural areas.

Perceptive readers will start to see why the big oil companies, who are used to oil fields yielding millions or even billions of barrels, can't get too excited about building thousands of mini-refineries in rural counties and arranging for the biomass feedstock to be grown by thousands of farmers.

The product from processing biomass into fuel would be either biodiesel or ethanol. Neither of these products is new. They currently are widely sold in Midwestern states as a way of using up the oversupply of corn and soybeans the US has been producing in recent decades. Urban readers might not be aware that average corn yields in the US have gone up from 20 bushels per acre in the 1930s to over 160 bushels per acre today and are projected to increase to over 200— if our fertilizer production holds out in the face of natural gas shortages.

During the current era of cheap oil, converting surplus grains to fuel is primarily a way to help US agriculture by increasing the demand for its products even if it takes a government subsidy. The fact corn based ethanol is taking nearly as much energy to produce as it is yielding is not particularly relevant.

All that is about to change. As the price of conventional liquid fuels increases above the cost of producing biomass into fuel, the demand for ethanol made from crops quickly will surge to undreamed of proportions. The issue of "we have to eat too," of course, will put a limit on the portion of our food crops that can be turned into motor fuel

Without going too deeply into the chemistry of converting plants to fuel, biomass has edible components (starch, food oils, and protein) and non-edible components (lignin, hemicellulose, and cellulose). While there still appears to be some room for growth in converting edible biomass (soybeans, corn, rapeseed) to fuel, the real jackpot will come from the non-edible components, called lignocellulosic biomass.

There currently are four ways of converting lignocellulosic biomass into the ethanol that can be used in an internal combustion engine. They all work at laboratory scale and, as yet, it is too early to tell which technology will be the most cost effective when scaled to industrial quantities. The various conversion techniques are said to yield from 60 to 130 gallons of ethanol per ton of biomass feedstock. There is currently a pilot conversion plant working up in Canada .

One of the more promising sources of grown-for-fuel biomass is a native American plant called switchgrass. This grass, which can grow up to nine feet tall, is a perennial requiring low inputs of fertilizer, yet yields 5-8 tons per acre. At 65 gallons of ethanol per ton, each acre could produce about 425 gallons per year. Right now, the cost of growing and converting switchgrass to ethanol can't quite compete with gasoline even at $2.25 per gallon, but when the price of oil moves higher than locally produced ethanol, it will become very attractive.

For those concerned with global warming, it should be noted that biomass based fuels are "carbon neutral." That means the carbon released when ethanol or biodiesel are burned was recently absorbed from the air as the plant was growing. Thus, there is no net addition of carbon to the atmosphere as there is from burning fossil fuels whose carbon was absorbed from the atmosphere eons ago.

The last point to consider is how we can start producing and consuming biomass for fuel prior to the advent of very expensive gasoline. The trouble is it will take many years or decades to get a nationwide biomass-based ethanol industry going. Establishing a good stand of switchgrass can take three growing seasons and a lot of work.

One early step might be to require a small percentage of switchgrass be added to the fuel in coal-fired power plants. This would not only reduce emissions from the power plant but would establish a market for switchgrass prior to the construction of lignocellulosic processing plants.

The bright spot in all this is that American agriculture, which has been suffering from low agricultural prices wrought by 60 years of heavy fertilization and pesticides application, now has much better prospects. The arrival of peak oil, coupled with the developing shortages of natural gas and the consequent demand for coal, will leave biomass as the least costly source for transportation fuels. Farmers as well as the environment will certainly do better.

The sooner we can get started on this new paradigm, the better for us all.

Thursday, December 29, 2005

The Outlook on Oil

Some Experts Worry That Production Will Soon Peak. Others Warn That It Already Has.

by Jim Motavalli

In 1938, oil was discovered at Dhahran, near the Persian Gulf, and a small oasis became a modern city, complete with the sleek headquarters of the Saudi Aramco national oil company. If you’re an American or British oil worker, life is good in the Dhahran Hills, where homes in the suburban enclaves are made of brick or fieldstone, and despite the desert heat the gardens blossom with large shade trees, flowering bougainvillea and oleander. There are bike paths, a 27-hole golf course, a rugby field and horse stables.

Once life was like this for oil workers in Texas, where roadside oil wells were symbols of a new American prosperity. Oil drillers struck a geyser of black gold at Spindletop, near Beaumont, in 1901, and landowners were soon selling $100 tracts for $20,000 and more. Instant millionaires were created, leading to the clich� of the hick in cowboy boots who paid cash for his Cadillac. But today, after yielding 153 million barrels of oil, old Spindletop is mostly a museum site. Texas still has 129 billion barrels of oil, by some estimates, but it is located deep beneath the earth, making economic recovery difficult. The average well in Texas today produces nine barrels of oil a day, compared to 6,000 barrels in oil-rich Saudi Arabia.

But this situation, too, may be fluid. Despite the reliance on it evident in nearly all strategic energy planning, Saudi oil is also a finite resource, and some fear that the desert kingdom may be the next mega-producer to lose momentum.

Is the world running out of oil? Ask that question and the geologists and strategic planners will say you’re missing the point: We’ll no more “run out of oil” than we will run out of water in the ocean. About half of the world’s known reserves are still in the ground. The real issue, they say, is when will the planet reach the peak of oil production, after which a slow decline will inevitably clash with demand that grows at two percent per year. Finally, they add, we’ll stop producing oil altogether because it will become uneconomic or because technology will have moved on, not because we’ve pumped out the last drop.

The Great Debate

We’ve reached a dramatic crossroads, with highly credentialed experts coming to diametrically opposite conclusions about the future of the world’s oil supply. With consumers paying $2.50 or more for a gallon of gasoline at the same time ExxonMobil and other oil producers are raking in the largest corporate profits in history, we’re at least finally paying attention. So are we being manipulated by greedy oil companies, or is the shortage very real, demanding an abrupt about-face after more than 100 years of heavy reliance on a constant supply of relatively inexpensive oil?

Unfortunately, the more you talk to experts and immerse yourself in technical data about R/P ratios and constant decline rates, the more confused you become. Unlike the debate over climate change, which the skeptics lost long ago, the war of words over peak oil is still very much raging, with solid science on both sides.

But one conclusion is irrefutable: The age of cheap oil is definitely over, and even as our appetite for it seems insatiable (with world demand likely to grow 50 percent by 2025), petroleum itself will end up downsizing. And it’s unlikely that the high oil prices of 2005 will be a bubble, as was the 1970s fallout from the Arab oil embargo. Today, not only is oil getting harder to find in economically exploitable form, but the use of what remains is contra-indicated by the hard reality of global warming. Even if we had ample oil, in the long run we’d need to switch to renewables, anyway.

When will oil peak? A growing body of oil company geologists, oil executives, and investment bankers, including the influential American geologist L.F. Ivanhoe, see it happening by 2010. The Department of Energy (DOE) has given various estimates, ranging from 2016 to 2037. But many oil companies are skeptical it will ever happen, putting faith in higher prices and new technology (including horizontal drilling and 4-D exploration) spurring ever more productive exploration. Exploration will have to be very productive indeed to keep up with world demand, which the Defense Department’s Energy Information Administration (EIA) believes will grow from 78 million barrels per day in 2002 to 118 million barrels in 2025.

Are we on track to meet that growing demand? No, says a report by L.B. Magoon for the U.S. Geological Survey (USGS). “Technology is great,” he wrote, “but it can’t find what’s not there. In the last five years, we consumed 27 billion barrels of oil a year, but the oil industry discovered only three billion barrels a year. So only one barrel was replaced for every nine we used!” Annual oil discoveries have been declining since 1965.

Might oil peak have already been reached? So said Iranian petroleum geologist Ali Samsam Bakhtiari last October: “In my humble opinion,” he said, “we should now have reached peak oil. So it is high time to close this critical chapter in the history of international oil industry and bid the mighty peak farewell.” And concurring is highly respected Irish geologist Colin Campbell, who said, also in October, “The maximum peak of production as far as the normal so-called oil has come [in 2005], after which there will be a long decline.”

The Trickle or the Geyser?

There’s no lack of firm conviction when it comes to oil. Robert Hirsch’s resum� includes stints at both Exxon and ARCO, and he’s now senior energy program advisor at the Science Applications International Corporation. “The ‘depletion’ folks by and large are not exaggerating the problem, particularly when you add in the risk dimension,” he said in an interview. “The oil reserves are very uncertain. Middle East politics and egos are in play, and the rest of the world is at great risk because there will be no quick fixes when depletion starts.”

In a report for the Atlantic Council of the U.S., Hirsch wrote that “the age of plentiful, low-cost petroleum is approaching an end,” and that “unless mitigation is orchestrated on a timely basis, the economic damage to the world economy will be dire and long lasting.” What’s more, Hirsch says, we won’t have much warning when oil peak is finally reached. Studying the examples of the U.S. (which reached peak oil production in 1970) and Great Britain (peak in 1999), Hirsch concludes that “it was not obvious that production was about to peak a year ahead of the event. In most cases, the peaks were sharp.”

So it’s business as usual, with the politicians in denial, until we finally see the oil peak in the rear-view mirror. The huge challenge is that, as a 2005 Department of Energy (DOE) analysis indicated, we risk a 20-year “severe liquid fuels problem” if we delay our planning for a post-petroleum energy economy until peak is actually reached. Even if we began a crash program 10 years before peak, the DOE report says we’ll still have a decade of hardship.

Peak oil may be closer than we think. The chief Cassandra today is probably oil analyst Matthew Simmons, whose views are not easily discredited because of his stellar credentials. Simmons, a sometime confidant of President Bush on oil matters, is chairperson and chief executive of the energy-oriented Simmons & Company International investment bank in Houston, and is a member of the National Petroleum Council and the Council on Foreign Relations. He writes in his book Twilight in the Desert, based on considerable research, that “Saudi Arabian oil production is at or very near its peak sustainable volume (if it did not, in fact peak almost 25 years ago), and is likely to go into decline in the very foreseeable future [emphasis in the original]. There is only a small probability that Saudi Arabia will ever deliver the quantities of petroleum that are assigned to it in all the major forecasts of world oil production and consumption.”

Simmons says that a few “super giant” oil fields in Saudi Arabia (including the massive Ghawar field, the world’s largest, discovered in 1953) account for 92 percent of the country’s crude oil output, and that these fields are aging and suffering from rising “water cut.” (Water is injected into mature oil fields to keep the oil flowing; it’s a sign they’re declining.)

Simmons told E, “In fact, the real risk is not the question of proven reserves, which is a very fuzzy area. The real story is that there are basically just five old, mature fields that account for 90 percent of all Saudi production, and a remarkably small number of wellheads that produce the oil from these fields. It leaves the Saudis with no diversification if any one of the fields suffer a production collapse.”

The implications of this are huge, since Saudi Arabia has the planet’s largest proven reserves and is the world’s largest oil exporter, from which the U.S. buys 1.5 million barrels a day (15 percent of our total consumption in 2004). Some 60 percent of the 20 million barrels of oil the U.S. consumes every day (enough to cover a football field with a column of oil 2,500 feet tall) is imported, and replacing the supply from Saudi Arabia would be no simple task.

DOE’s “International Energy Outlook 2005” projects that Saudi Arabia could be producing 20.4 million barrels of oil per day by 2025, twice its current production. The Saudis, some of them at least, are in synch with this scenario. Saudi oil minister Ali al-Naimi said at an oil conference in South Africa last September that it would “soon” add 200 billion barrels to its current reserve estimate of 264 billion barrels. He added that his country could easily produce more than the current 9.5 million barrels daily, but that limited refining capacity restrained the system’s ability to absorb more oil. “Give us the customers and we will pump more oil,” he said.

In a report for the Ross Smith Energy Group, petroleum engineer Jim Jarrell takes on Twilight in the Desert and other skeptical Saudi onlookers. He cites a 2000 USGS report that ranked Saudi Arabia number one worldwide in terms of undiscovered oil resource potential. Jarrell praises the Saudis for using conservative methods for assigning oil reserves, and for managing the resources carefully to allow only an “extremely flat” decline.

In an interview, Jarrell says, “Our report says we could find no evidence to support a concern that current Saudi production levels are near imminent and irreconcilable decline. In fact the evidence tells us that the Saudis are well informed and are operating their wells prudently.” But can the Saudis ramp up to 20 million barrels of oil a day, as confidently proclaimed by many? “I have no idea,” says Jarrell.

But neither Simmons nor Jarrell is on the ground in Saudi Arabia. Jarrell admits that determining actual reserve levels “would require a detailed reservoir-by-reservoir evaluation.” As Muhammed-Ali Zainy of London’s Centre for Global Energy Studies points out, we’ll just have to take Saudi Arabia’s word for its reserves and pumping capacity, since the nature of its closed society makes any oversight impossible.

Some of the most trenchant criticism of Saudi Arabian oil capacity comes from inside the Kingdom itself. Dr. Sadad al Husseini, the newly retired head of oil exploration and production for Saudi Arabia, told Britain’s Channel 4 in October that “it’s unrealistic for the world to be expecting such high numbers from all of the producers, including Saudi Arabia.” The hope that his country would be producing more than 20 million barrels of oil per day in the next two decades was “unrealistic,” he said, and “a dangerous basis for policy.” Al Husseini also said that he believed that world oil would peak at 95 million barrels per day in 2015.

“We don’t see us as the ones making sure the oil is there for the rest of the world,” an unnamed senior Saudi Aramco official told the New York Times in 2004. He further cautioned that even the attempt to get up to 12 million barrels a day would “wreak havoc within a decade,” by damaging the oil fields.

Simmons, who believes that major producers Iran, Iraq (yes, Iraq), Kuwait, Venezuela and Indonesia are “highly likely” to have passed peak, claims that it’s more likely that he’ll be living on the moon in 2025 than for Saudi Arabia to be producing 22 million barrels of oil per day. His views are echoed by another unimpeachable source, Edward O. Price, Jr., the former head of exploration for the national oil company Saudi Aramco. Price questions the existence of vast untapped oil reserves in Saudi Arabia, and points to a 20-year-old study by four American oil companies, then working with Aramco, that found, according to the New York Times, “little in the way of undiscovered oil reserves.”

A Gusher of Profit

As consumers suffer at the pumps, the oil companies themselves are floating on an ocean of record profits. The third quarter of 2005 showed $9.92 billion in earnings for ExxonMobil, $9.03 billion for Royal Dutch Shell and $6.53 billion for British Petroleum. In an attempt to deflect the blame, the oil giants are spending heavily on ad campaigns, such as an American Petroleum Institute (API) spot that urges consumers to turn down their thermostats, clean their furnace filters and weatherstrip their windows.

Further, the message is: “You’d better trust us, because we’re in trouble if you don’t.” Chevron says, “It took us 125 years to use the first trillion barrels of oil. We’ll use the next trillion in 30.” ExxonMobil’s ads note that “as the world grows, it will require about 50 percent more energy in 2030 than today.” But the latter company’s message that it has “consistently led the industry in research and technology” was somewhat undercut by its bland assertion, in USA Today, that it had no plans to invest its unprecedented earnings in renewable or alternative energy. “We’d rather re-invest in what we know,” said ExxonMobil spokesperson Dave Gardner.

In full-page newspaper ads, API claims that there is 131 billion barrels of oil just waiting to be discovered in the U.S. through offshore and Mountain West drilling, if only the “federal restrictions and permitting delays” were removed. The implication seems to be that the radically pro-Big Oil Bush administration and the appeasement-minded Congress aren’t doing enough.

API comes out swinging when angry politicians such as Senator Hillary Rodham Clinton (D-NY) call for a $20 billion per year clean energy fund paid for with a windfall tax on oil profits. “They seem to think our companies are owned by space aliens,” fumes John Felmy, API’s chief economist. “This is an attack on their own constituents who are invested in pension funds and 401k plans.” Asked where the public should direct its anger, Felmy points at “decades of government policy that has hindered the oil industry in its search for more oil.”

The only reason we’re not discovering any new oil, say Peter Huber and Mark Mills in a Wall Street Journal piece, is that “the cost of oil remains so low.” In other words, we keep buying oil from the Middle East because it’s cheaper than developing new sources, such as the 3.5 trillion barrels sunk in Venezuelan clay in the Orinoco basin and the Athabasca tar sands of Canada. Respected oil analyst Daniel Yergin, chairperson of Cambridge Energy Research Associates and author of The Prize, says that unconventional oil sources (tar sands, ultra-deep-water developments, natural gas liquids) will account for 30 percent of total capacity by 2010, up from 10 percent today.

There are huge technological (and environmental) hurtles to overcome before even a fraction of unconventional resources can be tapped. Some analysts doubt that much of this potential oil will ever be recovered. But others are bullish. Paul Kuklinski, an energy analyst with Boston Energy Research, says unconventional sources will increasingly come on line after 2020, when emerging technologies such as horizontal wells “will allow us to recover oil from wells that were considered unrecoverable, with much less impact on the environment.”

The oil industry makes forecasts of its own, and not surprisingly they show us dependent on petroleum for the foreseeable future. ExxonMobil President Rex Tillerson said in September that as much as three billion barrels of conventional oil are waiting to be recovered, and another seven trillion barrels may be lurking in the aforementioned unconventional sources, including tar sands and oil shale (see sidebar). The company’s “Outlook for Energy: A 2030 View,” published in 2004, forecasts 2.8 percent annual world economic growth in that period, accompanied by 1.5 percent growth in annual oil demand. Oil and gas, the report said, will account for 60 percent of new energy demand in the period under study. Wind and solar will grow 10 percent, it said, but still account for less than one percent of total energy use.

But even in the oil industry’s own “Outlook” report it’s possible to find some caveats. Although the report notes the aforementioned seven trillion barrels of unconventional oil, it doesn’t seem all that optimistic about exploiting them. A Bulletin of Atomic Scientists’ analysis of the report points out that ExxonMobil sees no significant contribution from oil shale even by 2030, and only a modest 3.3 percent contribution from Canadian oil sands (development of which may be hampered by a natural gas shortfall as described by Julian Darley of the Post Carbon Institute in his new book High Noon for Natural Gas: The New Energy Crisis).

Nevertheless, ExxonMobil’s assessment (echoed by a Bush administration heavily stacked with former oil executives) is consistently steady-as-she-goes, based on the assumption that all that oil is out there, and that neither renewable energy nor global warming will be a factor. ExxonMobil, in particular, is contemptuous of the former, and outright dismissive about the latter. “At ExxonMobil Corporation’s laboratories [in Annandale, New Jersey], there isn’t a solar panel or windmill in sight,” wrote the Wall Street Journal. “About the closest Exxon’s scientists get to ‘renewable’ energy is perfecting an oil that Exxon could sell to companies operating wind turbines.”

API’s Felmy dismisses renewables, and sees a future only for natural gas hidden in frozen methane hydrates (there are reportedly vast deposits in the U.S.) and cellulose ethanol, a fuel made from agricultural waste championed by former CIA chief James Woolsey, among others. But, as Earth Island Journal reports, methane hydrates are a potentially devastating global warming enhancer, and initial attempts to find and exploit deposits commercially have been disappointing. “To think about vast deposits that will be commercially exploitable, it’s my opinion it just won’t happen,” says Dr. Keith Kvenvolden, emeritus organic geochemist at USGS.


The peak oil chicken littles have resources of their own. There’s a growing mountain of books with titles like Power Down, The End of Oil, The Party’s Over, Crude Awakenings and The End of Fossil Energy. Websites include,,,,,, and many more. They’re supported by groups like the Association for the Study of Peak Oil (ASPO). Their messages are similar: We’re heading for a major energy crash, with peak likely to be reached between 2006 (this year!) and 2016. According to Richard Heinberg’s Power Down, 24 of the 44 significant oil-producing nations are “clearly past their peak of production.” ASPO believes that all petroleum liquids will peak around 2007.

Most peak oil analysts point to a mysterious force known as the Hubbert Peak, which some believe to be infallible. In 1956, when American oil production was riding high, a leading oil geologist named Dr. Marion King Hubbert was widely ridiculed for publishing a paper claiming that the lower 48 states (excluding Alaska, which had yet to feel a drill bit) would reach a production peak between 1965 and 1970. It arrived right on schedule, in 1970, when U.S. oil topped out at 9.4 million barrels of oil per day. An extension of Hubbert’s Peak to world oil production would put us right at the very top of an upturned finger, in sharp contrast to the continuing upward climb predicted by the federal EIA. By 2080, the curve sees world oil slowed to a relative trickle.

Hubbert died in 1989, but not before he had predicted that global oil peak would occur between 1990 and 2000. Was he wrong? We may not know for some time, since oil peaks only become clear in rear-view mirrors.

Hubbert and his followers have their critics. One of the most combative and pugilistic of the debunkers is Michael C. Lynch, a research affiliate at MIT’s Center for International Studies and president of Strategic Energy and Economic Research Inc. “I scoff at poor analysis and unwarranted alarmism,” he told E. “I think the current market is driven by speculation, and that we will see relief in the next few months.”

Lynch derides Simmons’ Twilight in the Desert as “embarrassingly bad. He includes minimal data, but the data actually refutes his arguments.” He considers it “illogical” that Saudi Arabia would be pumping its oil reserves dry. “You never have a basin with a few giant fields and nothing else,” he says.

And, in a 2003 article for Oil & Gas Journal, Lynch also took on the Hubbert Peak itself. Using arguments Richard Heinberg in Power Down describes as “well worn,” Lynch outlines a “major theoretical flaw” in the “very simplistic” curve. He says that the oil pessimists rely too heavily on geology, when in fact “demand determines production, not geology.”

Lynch says the Hubbert Peak only appears to have validity, since mature oil production grows very slowly, with new fields representing no more than a small proportion of existing fields. Peak oil gurus like Campbell and petroleum consultant Jean H. Laherrere “have apparently rediscovered the Hubbert curve, but without understanding it,” Lynch writes. He denies that oil production necessarily follows a Hubbert-like bell curve, pointing to Campbell’s work that shows production for 51 non-OPEC nations “and only eight of them could be said to resemble a Hubbert curve even approximately.” The Hubbert curve, Lynch argues, “originally held as scientific and inviolable, is of no particular value.”

At the end of the day, Lynch is one of the last bears on oil prices. Oil crises are short-term affairs, he says, and the general price trend is downward. “The possibility of a price drop so rapid that OPEC can’t stabilize the market at the level they want is real,” he said last May. In this, Lynch directly challenges such respected oil observers as Goldman Sachs, which last March floated the idea of oil prices reaching $105 a barrel by 2007. “We believe oil markets may have entered the early stages of what we have referred to as a ‘super spike’ period—a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion only after which will lower energy prices return,” said company analysts.

Another prominent voice, Jeffrey Rubin, chief economist for Canada’s Imperial Bank of Commerce, believes prices will reach $100 a barrel by late 2007 (translating into $4 a gallon at the pumps). Again, the problem is too little oil chasing too much demand. “The gap between supply and demand grows as much as three million barrels a day by 2008,” Rubin said. “Global oil needs are almost 84 million barrels a day now.”

It’s impossible to escape the conclusion that we’re steaming full speed into a train wreck of monumental proportions. Obviously, the world made do without oil for millennia (indeed, a graph of oil in the context of human history makes petroleum appear to be a very brief episode). But we’re incredibly dependent on it now, and not just for transportation and home heating.

Consider the fact that the average piece of food travels 1,500 miles before it reaches your plate. Geologist Dale Allen Pfeiffer has pointed out that it takes 10 calories of fossil fuel to produce one calorie of food eaten in the U.S. Pesticides are made from oil, and commercial fertilizers from natural gas. Farming machinery, increasingly complex in recent years, runs on oil and was built using it.

Building a desktop computer consumes 10 times it weight in fossil fuels. A single 32-megabyte DRAM chip requires 3.5 pounds of fossil fuels to make. The average car consumes 27 to 54 barrels of oil…not on the road, but in the factory.

Because our way of life is so intimately connected to cheap oil, critics like James Howard Kunstler, author of The Long Emergency, see a profound realignment of society ahead. “We are going to have to live a lot more locally and a lot more intensively on that local level,” Kunstler said in a 2005 speech in Hudson, New York. “Industrial agriculture, as represented by the Archer Daniels Midland/soda pop and Cheez Doodle model of doing things, will not survive the end of the cheap oil economy. The implication of this is enormous. Successful human ecologies in the near future will have to be supported by intensively farmed agricultural hinterlands. Places that can’t do this will fail….What goes for the scale of places will be equally true for the scale of social organization. All large-scale enterprises, including many types of corporations and governments will function very poorly in the post-cheap oil world.”

Kunstler may be understating the human ingenuity factor, and he quickly dismisses the potential for alternative energy, from wind power to solar and biofuels (see sidebar). It’s hard to imagine, as he does, big cities and suburbs emptying out because we simply won’t have access to cheap oil (and can’t keep the air conditioning running). But it’s far more likely a scenario than the cheerful Energy Information Administration charts showing ever-rising oil reserves in the Middle East, with production meeting demand simply because, well, it has to.

Jared Diamond discusses one of the critical stops on the road map to societal failure in his book Collapse: “It turns out that societies often fail even to attempt to solve a problem once it has been perceived.” What happens, he writes, it that “some people may reason correctly that they can advance their own interests by behavior harmful to other people…The perpetrators know they will often get away with their bad behavior, especially if there is no law against it or the law isn’t effectively enforced. They feel safe because the perpetrators are typically concentrated (few in number) and highly motivated by the prospect of reaping big, certain and immediate profits, while the losses are spread over large numbers of individuals.”

Diamond isn’t specifically talking about oil companies and their mega-profits, but his scenario offers a precise explanation for the West’s failure to act in the face of clear and present energy danger. With the oil companies and their supporters in Congress and the White House not only controlling the debate but assuring the public that a steady hand is at the tiller, we may very well drift toward the kind of abrupt collapse Diamond documents as having taken down the Vikings, the Mayans and the mysterious tribe that inhabited Easter Island. Instead of cryptic stone statues, we may leave behind rusting oil derricks and highways that lead nowhere. Research assistance by Mike LaTronica, Jayasudha Joseph and Daniel Scollan.

JIM MOTAVALLI is editor of E.

Who Really Needs a Silver Mercedes?

An evening with Dr. Colin Campbell and Graham Strouts, Schull, West Cork, Dec. 14th 2005

By Graham Strouts

After a successful presentation with Dr. Colin Campbell in Bantry in September, I was asked to join him once again last night to talk to some 60 people who turned up at the Community School in the small village of Schull in West Cork, at an event organised by the Irish Country Women’s Association.

Dr. Campbell opened proceedings with a talk entitled “The Decline of Oil can Bring a Positive Awakening”. After a brief discussion of his early life as an oil geologist- including the now almost iconic photo of himself 45 years ago on a mule in Columbia- he went on to show some slides illustrating how oil has formed and been trapped in only very select and special geological circumstances. The story of how oil is formed is actually very important to gain an understanding of depletion- to the uninitiated, finding oil is merely a case of drilling down far enough until we hit some kind of underground lake awash with the stuff.

Once we understand how painstaking and arduous field work was gradually able to identify the specific source rocks and conditions that gave rise to the formation of oil, it becomes much easier to accept that once these rare places have been discovered, drilled and their treasures consumed, there will be no more. “As every beer drinker knows, the glass starts up full and ends up empty”.

The presentation continued with a few graphs showing the characteristic depletion curves of various countries: first, the United States, which as the most mature oil producing nation of all reached a peak in production in 1971 and is now in an advanced state of depletion which no amount of investment or new technology has been able to reverse. World oil production peak now seems to be at hand, and Dr. Campbell finished his presentation with some musings on the consequences and impact of the looming energy crises: the end of cheap air travel in a few years perhaps, the end of motoring even- ultimately a complete transformation of what we have come to know as the modern way of life.

Will this be a bad thing? – we were invited to question this- do we really enjoy our trips to Stanstead Airport? Do we really need that Silver Mercedes?

The final slides showed a man with a wheelbarrow, clearly living close to the land, and happy with it too- in 1950; and then again, the same slide, the same man, the same look of rural peace and fulfilment- a simple life that perhaps we can look forward to again as we enter the Age of Energy Descent.

Following Colin’s talk was a showing of the film by the Norwegian film producer Amund Prestegard, “Peak Oil- Imposed by Nature” and this time we were treated to some previously unseen footage of Peggy Coughlan, the (now retired) postmistress from Ballydehob, who talks to Colin of how life used to be in the pre-industrial era: in many ways, a happier time, when everyone had time for each other and life was generally less stressful.

It then fell to me to talk about possible responses to all this- what can communities do to prepare for the inevitable and imminent decline in available energy supplies?

As co-ordinator of the course on Practical Sustainability at the Kinsale College of Further Education, I have been working on developing the next steps to implementing the Energy Descent Action Plan. This publication- written by my predecessor at the college, Rob Hopkins, with second-year students last year, has now sold out but is available as a pdf download from

Last week in a historic move, the Town Council officially endorsed the Plan after a proposal by Louise Rooney of Transition design. Backing up this support, the Mayor of Kinsale, Thomas O’Brien, together with and Cllr. Dermot Collins and Cllr. Isabelle Sutton, attended the prestigious Cork Environmental Awards Ceremony on Dec. 8th where John Thuillier , Principle of the college, accepted an award for the Plan .

There could be no better introduction that I could use to talk about possible responses- for a town council to put its name to a process to move the town towards local energy and food security is a strong indication that the time may be ripe for change, that the world is indeed waking up.

Graham Strouts talks about the Kinsale Energy Descent Plan At the Community School in Schull

Building on Colin’s presentation, I tried to tease out what the real issues are: not so much the reduction of available energy, but more the fact that, as a culture, we have allowed ourselves to become completely dependent on- addicted to in fact- a non-renewable energy source, and that for the most part, consume enormous quantities of energy with little thought: it has been calculated that a 40-litre fill of diesel in a car is equivalent to something in the region of three years of manual labour in terms of the work it can do.

One of the first things a community can do, then, is to educate itself about energy- try to achieve a basic level of energy literacy: how many of us have much idea about how much energy we actually use in the running of our homes? In heating and lighting? Or the embodied energy in the food we eat or the energy it has taken to transport it, often over a thousand miles, to our plates? A good idea is to form a group of concerned people and hold events, film-showings and talks.

The next step may be to do some kind of energy audit- at first, on a domestic scale, but eventually it may be possible to do it on a town level, as we are hoping to achieve in Kinsale.
There are many ways we can individually reduce our energy consumption- from car-sharing to changing to energy-efficient lightbulbs- but the real change will come at the community level, as we re-adjust our lifestyles and learn to produce more of our basic necessities close to home, and reduce commuting.

It is big task of course, but like breaking any addiction, will reap many benefits. We may find the words of Peggy Couchlan to be very apt and that we will feel more fulfilled as we reduce our energy consumption and rebuild our communities.


Graham Strouts teaches Permaculture at the Kinsale College of Further Education. He has been giving talks and presentations about community responses to Peak Oil around Ireland for the past 18months. Contact: gnstrouts at

Tuesday, December 27, 2005

Syriana: Hollywood's Oil Flick

Toward Freedom

By Rob Williams

SyrianaDirector Stephen Gaghan’s gripping new film "Syriana" explores the roots of 21st century civilization’s biggest dilemma: Peak Oil. Inexpensive fossil fuels – oil and natural gas – have floated both the corporate-controlled global economy and U.S. imperial planetary hegemony for the past several decades. Now, the party is over, as "elephant" fields like Kuwait’s Burgan are peaking, oil companies are maintaining sagging portfolios by buying up other companies’ reserves (real and fictitious). The world is beginning to grasp the significance of living without immediate and inexpensive access to one of the 20th century’s most vital resources.

Perhaps "Syriana’s" biggest weakness (if one can call it that) is that Gaghan doesn’t pander to his audience. Instead, he seamlessly stitches together a complex and fast-moving narrative that tracks more than a dozen characters on four continents, assuming we know more about the way the world really works than we might.

To fully appreciate "Syriana’s" storyline, it’s important to understand that the world currently consumes 80 million barrels of oil a day, with the globe’s richest and most powerful empire (that’s the U.S.) burning up 20 million of those barrels. Understand, further, that the United States reached "peak oil" (maximum domestic production capacity) in 1970, when it produced 10 million barrels of oil a day. Now, as U.S. supply dwindles, the country currently produce only 5 million domestic barrels a day (while consuming 20 million, remember), for a yearly consumption total of 7 billion barrels, while possessing only 28 billion barrels in strategic reserves. That leaves fifteen million barrels of oil the U.S. needs each day that we can’t produce ourselves. If oil-producing nations (say Iran or Venezuela) cut the U.S. off tomorrow, we’d have only four years of oil and natural gas left.

Rather than give the oil-producing nations of the world that kind of power, U.S. based energy corporations (the fictional Connex and Killan corporations, who merge in "Syriana) and the U.S. government (now essentially the same entity, with Team Bush/Cheney/Condi/ Wolfy/Rummy running DC) have worked tirelessly during the past few decades to secure control over the world’s remaining fossil fuel reserves.

Make no mistake – under cover of a post-911 "war on terror," the U.S. government is waging a sequential struggle to control the planet’s known remaining oil and natural gas reserves - Afghanistan and Iraq are but stepping stones to increased U.S. geo-strategic control over the greater Middle East.

The C.I.A., represented in "Syriana" by George Clooney’s Bob Barnes, an agent who moves from true believer to angry skeptic, exists primarily to do the unpleasant but necessary work of funding Wall Street bankers and fueling U.S. imperial expansion by employing a wide variety of tools to ensure that the right deals are made by the right governments: drug smuggling, money laundering, weapons smuggling, election skullduggery, and assassination. Access and control of oil reserves is integral to their mission, as "Syriana" suggests.

And, as "Syriana" makes plain throughout the story, energy corporations and the U.S. government are doing this, not just to make huge profits, but to perpetuate the current oil-lubricated American way of life for as long as possible. Many of us may pay lip service to opposing Team Bush/Exxon/ Cheney/ Halliburton’s plans, but as long as we refuse to make a radical energy shift, we are complicit in this whole exercise. Without being heavy-handed or preachy, Gaghan reminds us of this in subtle ways throughout the film.

And, lest we get too cranky with ourselves, other powerful nations (China, with an economy exploding at an annual 10% rate, takes center stage in "Syriana") are desperately looking for fuel, and the often-corrupt patriarchal emirs of Middle Eastern oil-producing nations are happy to sell, especially if it means enriching their own pockets and building their own palaces as part of the bargain. And what if a more enlightened desert despot (Iran’s Prince Nasir in "Syriana) wishes to sell his country’s black gold to the highest bidder (say, China) to make possible a more democratic, tolerant and prosperous society for his own people? Declare him a terrorist ("communist" or "socialist" are so retro) and eliminate him.

"Everything is connected," reads "Syrian’s" tag line. Indeed it is. We also meet energy trader Bryan Woodman (Matt Damon), who ends up backing Nasir’s efforts to nationalize his country’s energy fields; Iranian and displaced oil worker-turned fundamentalist/terrorist Wasim Khan; investigative lawyer Bennett Holiday (Jeffrey Wright) and a host of other characters whose lives converge in one of the most provocative and true-to-life stories of our time.

"Syriana" is probably the closest Hollywood will ever come to presenting on honest picture of our Peak Oil dilemma. Don’t miss it.

Monday, December 26, 2005

The Last Great Energy Illusion?


By EV World

'Twilight in the Desert' author, Matthew Simmons’ address to ASPO oil conference in Denver.

Few people have done more to coax a complacent, energy-voracious world out of its self-induced stupor than Matthew Simmons.

A successful energy industry investment banker from Houston who once advised the Bush campaign in 2000, Simmons is the Saul of Peak Oil. His transformation from oil and gas project financier to peak oil apostle didn't occur during a blinding encounter on the road to old Damascus, but over weeks and months of reflection and research on comments he'd heard during an oil industry conference on the Persian Gulf several years ago.

And like nascent Christianity in the first century, the Peak Oil movement has been growing slowly, but steadily, which Simmons briefly recounted in his opening remarks to the several hundred attendees at the first meeting of the United States chapter of the Association for the Study of Peak Oil in Denver, Colorado. He noted that there were just 45 "odd" people who met for the first conference in Upsala, Sweden some four years ago. By last year's meeting in Lisbon, Portugal, attendance had grown to several hundred, including 10 film documentary crews. It was decided at that meeting to found ASPO-USA.

Simmons, who stands maybe 5' 5" and has the ruddy complexion of an English schoolboy, placed the purpose of the Denver meeting in its context by observing that the "issue, basically, is pretty simple: Is peak oil real and if it is, is it important?"

He pointed out that despite being five years into the new century, "we've not had a crisis yet," curiously ignoring the 'war on terror' or the invasion of Iraq'.

"So, this might actually be the first crisis of the Twenty-first Century".

To answer the question of will peak oil be the first major crisis of the new century, Simmons asked rhetorically, "Does the twenty-first century need abundant energy growth? And second, can this growth be met by technology and hard work? And if not... if for some reason technology and hard work fail to create more energy, will demand for more energy understand and not grow anymore, or could a gap between demand and supply morph into what is commonly called a crisis?"

Simmons explained to the gathering of energy industry experts, government policy makers, environmentalists and the media, what he means by the word "crisis".

"A crisis, through all the ones we've every had, is basically a series of problems that we ignored until they combined to become terminal".

He pointed out that the twentieth century was the "greatest century of enlightenment and innovation ever. Unfortunately, the twentieth century was also marked by unintended problems that became awful crises."

These included four major crises: "The Great War (WWI) and its non-resolution", the unregulated economic excesses of the "Roaring Twenties that morphed into the Great Depression", the "Peace in Our Time movement that basically became World War Two", and finally the well-intentioned socialist revolution that was derailed by the Bolsheviks and was then hijacked by communist thugs like Stalin and Mao who caused the death of 100 million people.

"If it weren't for those four crises the Twentieth Century would have been the greatest century of enlightenment and innovation. But those four crises along occupied about sixty percent of those one hundred years. And we basically, actually, didn't understand any of them.

"So would reaching peak oil create another one of these crises? If the world passes peak oil and very importantly, natural gas, is this crisis or a surprise? Well, if demand peaks, it's a surprise. But if demand continues to grow, it's a crisis.

"The reason it's a crisis is really simple; if the world needs a hundred units and the supply is only sixty units, then prices go way up, disappointment sets in and rationing becomes mandatory, because when you don't have a hundred units, you can only use sixty.

"Will peak oil and gas happen," he asked?

"The answer is no... if neither turn out to be finite", as proponents of abiogenic oil contend. It is obvious that Simmons holds little respect for the theory of self-replenishing oil -- which he discussed with EV World's editor after his address -- or for what he calls "conceptual reserves", which are oil deposits that economists -- not petroleum geologists -- believe exist but haven't yet been found despite extensive exploration around the planet.

With obvious tongue-in-cheek, he said that he doesn't see peak oil occurring IF the world curbs demand or if all those conceptual reserves, in fact, actually become proven and economically extractable.

"We have a lot of prominent people right now who are flinging around unbelievable conceptual reserves, including the USGS office here in Denver. Or (ExxonMobil president) Rex Tillerson at the World Energy Congress in Johannesburg (South Africa) who said the world has three trillion barrels of recoverable reserves, two trillion conventional, one trillion unconventional, but since that's an estimate, it might be conservative; it could be seven trillion. Or Saudi oil minister Ali al-Naimi who says we have two hundred billion barrels of reserve that we're soon going to discover".

That remark brought a knowing chuckle from the audience because how can you know the size of an oil field before you've even discovered it?

For Simmons, then the answer to the question of will peak oil occur is a resounding, yes! if demand continues to rise and conceptual reserves remain just that, conceptual rather than actual.

"Peaking is actually a fact. It is not a concept", he stated. "All finite resources, unfortunately, have their limits to growth, and the faster a resources is used, the sooner its use peaks. Peaking, categorically doesn't mean running out. Peaking means further growth is over. The difference between peak oil and running out is as profound as me saying, I am getting a tiny bit hungry and I am about to starve to death. Or I sneezed, I might have cold or I am in the last stages of a terminal disease."

"I think it is important that the scoffers of peak oil stop saying we'll never run out, and understand that when you peak, you've peaked."

For Simmons, peak oil doesn't mean the end of oil, but the end of the growth of oil production, where year-after-year, the world could expect to pump more from the ground that the previous year. Peak oil is the opposite side of that growth curve, one which can be managed if we can cause demand through greater end-use efficiency, resource conservation and fuel substitution to match, year-on-year, the decline in oil and gas production.

In this 45-minute presentation, Simmons explains in more detail the concept of peak oil and gas in terms of what the French Petroleum Institute refers to as the "royal family" of oil fields: the gigantic "king" field, one or two"queens" and an six to ten "lords" as illustrated by both the oil fields of Saudi Arabia and the North Sea.

"After that, you've not run out of things to discover, but they're just little, small pools."

And the sobering fact is, that all of the known "royal families" around the globe, which were originally found decades ago, are now aging and going into decline; just at a time when global demand is escalating due to economic growth in China and India.

Near the conclusion of his luncheon speech, Simmons conceded that maybe Middle East oil reserve estimates made in the 1980s might have been good guesses.

"Undiscovered Middle East oil might be found," he said, "but this also might be the last great energy illusion."

The central question is, should the world continue gamble its future on the unknown and possibly unknowable?

You can listen to Mr. Simmon's complete presentation using the Flash-based MP3 Player above or by downloading it to your computer hard drive for playback on your favorite MP3 device.

EV World expresses its thanks to ASPO USA, Steve Andrews and Randy Udall for granting us permission to attend and record this historic event. The next conference will be held in Boston, Massachusetts in 2006.

Sunday, December 25, 2005

Peak Oil - The Post-Apocalypse In Movies and Fiction

Have you read a story or seen a movie that relates to a post peak oil world in some way?

Many sci-fi stories project a future of boundless energy resources that supply everything and anything seemingly with negligible cost and consequence. Considering the likelihood of the ultimate depletion of fossil fuels the possibilities projected seem improbable, if not outright silly. A planet sized super-city, fully populated with humans and aliens, with flying transportation devices, and no visible means of power or food production can be fun to consider, but its un-believability diminishes the story to some degree.

Do you have a movie, novel, or short story that you liked, or did not like, that attempted to be realistic about the future? Please add your suggestions to the comments and we can keep a list to share with others.

Here are a few that come to mind for me:

Movie: The Road Warrior. The Mad Max movie about a world where fuel was fought over by villagers and ruffians in a bleak desert landscape. A very good movie!

Book: The Postman, by David Brin. A post-apocalyptic future Oregon where a wanderer dons a found USPS mail man uniform and becomes the entire region’s mail man. An entertaining and reasonable story.

Movie: The Postman, with Kevin Costner. The same story as above very loosely woven into a movie plot. I thought it was a basically rotten movie. Too bad.

Movie: Syriana, with George Clooney. This movie presently in theater release has great reviews, but I have not seen it yet.

Movie and book: The Planet of the Apes. It has been years since reading or viewing this story, but I recall both favorably.

Friday, December 23, 2005

The Warning of Peak Oil

By Colin Wright

After years of work by a small group of dedicated activists, the concept of Peak Oil is slowly percolating into mainstream dialog. Peak Oil is not, as a friend once surmised, a marketing campaign for a particular brand of gasoline. Rather it is the imminent maxing out of global oil production, the point after which each succeeding year produces less oil.

By now Peak Oil has been covered (at least briefly) by most major media from Time magazine to USA Today. It has been debated on campuses such as Caltech and Stanford. Even Congress is getting in the act. A Peak Oil caucus has formed in the U.S. House, whose members recently held hearings: see, which ought to be required reading for every person.

Perhaps like me, you had thought oil depletion would be something to worry about around 2030. In fact, the alarm bells have been sounded by the independent Association for the Study of Peak Oil ( Consisting of academics and former oil industry analysts, ASPO is perhaps the most credible oil research group. They're currently predicting 2010 as the year of peak oil production.

That would not be bad in itself (given the way global warming has taken off), except that it doesn't leave us much time to plan for alternatives. In the words of Dr. Robert Hirsch from the U.S. Department of Energy's National Energy Technology Laboratory: "Unless a mitigation crash program is started 20 years before peaking occurs, the economic consequences will be dire" (

Why? As world-wide competition for the remaining oil increases (particularly from China and India), prices will escalate. Oil supplies about 40% of the world's energy and powers over 90% of the world's transportation. Our entire industrial society is based on cheap oil, and just about every product these days, from pharmaceuticals to plastics, is oil-based.

It is not only the date of oil peaking that is unknown, nor the amount of time we will have before oil is essentially gone from our lives (perhaps 30 years after peak). The consequences are impossible to predict. On one end of the spectrum of opinion are the worst case scenarios -- worldwide depression followed by mass starvation (e.g. On the other end, we have business-as-usual with alternative sources of energy. The problem is that the alternative sources of energy are mostly expensive, dirty and finite themselves. Renewable sources of energy, while a welcome partial solution, are not "energy-dense," meaning that the energy return is small per dollar invested. (For a survey of our energy landscape, I'd recommend Richard Heinberg's excellent ground-breaking book "The Party's Over.")

While we can't know the future, it's a safe bet that expensive energy will lead to less travel and more conservation. Price inflation will surely follow expensive oil, as production and transportation costs increase. In other words, we can expect a negative effect on the world economy with a possible recession.

The task for progressives and environmentalists will be to situate oil and natural gas depletion in an ecological context. We are pushing the Limits to Growth, as GDP's increase annually all over the world, populations continue to increase and one resource after another appears to be finite within our lifetimes. (For example, natural gas is expected to peak a decade after oil. Copper extraction has been reported to be near peak at

We can continue to grow our consumer-capitalist economy until we have exhausted and fried the earth, guaranteeing ecological collapse. Or we can start pushing for a sustainable society that is not based on material accumulation, increased energy consumption and market competition. We can work for a culturally-rich, less-affluent and community-oriented society.

Fortunately, in Seattle, we have many advantages that will help us in the years ahead. We have a fairly well-educated, environmentally-friendly population with a progressive tradition. We have a relatively mild climate and useable hydroelectric power. (Note: that hydro-power could help electrify our transit system.) Much of our food could be grown in-state. The challenges will be to localize our economy to provide our basic needs and our livelihoods. (For example, eventually, the demand for jet airliners will slow and we will need to foster new eco-technologies.) Sweden is pushing ahead in this regard with the formation of networks of "eco-municipalities", which create local employment.

The ramifications of Peak Oil will be immense. We will need to push for a global oil depletion protocol so that the world's remaining oil can be shared equitably without warfare. We will need a new ethic of cooperation and sharing to find new ways of relating to each other as neighbors and citizens. (Groups such as Sustainable Ballard and the Seattle Permaculture Guild are already forging new pathways.) The key to surviving Peak Oil will be to build strong neighborhoods filled with citizen-activists, who elect progressive leaders. Educate yourself, then get active. (One place to start is the Seattle Peak Oil Awareness group,

We must create a sustainable society while we still have the energy and resources to prepare. If we wait until the last load of coal or uranium is burned, the last tree cut down, our fate (as Jared Diamond warns) will be that of the Easter Islanders. That is the warning of Peak Oil.

The Peak Oil Crisis - Sliding Down the Flagpole

Falls Church News-Press

Last week the US Department of Energy released the preliminary version of its Annual Energy Outlook 2006. This document, which projects supply, consumption, and prices for all forms of energy; is the official US government position on what energy resources will be available and at what cost, five, 10, 20, and even 25 years in the future.

For many years, making these annual projections was a rather straightforward exercise. There was plenty of coal, oil, and gas available, so all the forecasters had to do was project a sensible rate for GDP growth, mix in some energy efficiency gains, add a bit of inflation and out came a reasonable set of projections of what the future US energy consumption and prices might look like.

In recent years however, the traditional approach has started to come apart. Can anybody who follows the issue really imagine a product as valuable and as much in demand as oil dropping from its current $60 per barrel to $33 per barrel 20 years from now? Can anyone remotely familiar with the current oil situation really expect world production to increase smoothly from the current 84 million barrels a day (b/d) to 121 million b/d in 2025?

A few seconds with a calculator shows that, until last week, the US government was projecting world oil production will rise from the current 31 billion barrels per year to 44 billion barrels per year in 2025. This says the world would consume some 760 billion barrels during the next 20 years. This is not a serious projection. It will never happen. Most believe there are only about a trillion barrels of conventional oil left and know it is becoming increasingly difficult and expensive to produce.

In the new report, however, the first glimmerings of a change of position regarding the future of oil are starting to appear. The Energy Information Administration (EIA) projections are nowhere near reality as yet, but then these things take time.

Oil is now projected to cost an inflation adjusted $54.08 per barrel in 2025 vs. last year’s estimate of $32.95. This projected increase is to come amidst continued prosperity in the United State and Europe and continued rapid growth of the Chinese and Indian economies. Considering the price of oil is currently bouncing around $60 per barrel, has recently been up to $70, and many are talking of spikes beyond $100, $54.08 twenty years from now sounds rather conservative, if not quaint.

The EIA has reduced its estimate of world oil production in 2025 to some 111 million b/d vs. 121 million in last year’s projection. OPEC is now supposed to reach 44 million barrels per day in 2025 vs. the 55 million projected for 2025 last year. Non-OPEC production is now supposed to increase from the 52 million b/d to 67 million in 2025.

To be fair to the EIA, the estimates cited above are from the “reference case” assuming there are no policy changes and that nothing really bad (or good) happens to change the “normal” growth in oil production.

The interesting part of this story, however, is not that the EIA has started to back off from the very high production projections (and therefore low prices) they have been making. It is the rationale for doing so that is of note.

First we can dismiss the idea that peak oil will have anything to do with the major reduction in the projected world production 20-25 years from now. The Associated Press quotes the EIA Administrator as saying “the oil is there” when asked about suggestions that perhaps world oil production was peaking. To drive home the point, one of the Administrator’s press conference PowerPoints boldly asserts that the reassessment of long-term prices is “Not due to ‘Peak Oil’ considerations”. So there!

It seems the EIA reassessment, however, is based on the realization that the OPEC nations simply are not going to make the massive investments necessary to increase oil production by the amount the EIA had been projecting. There is also the notion the major oil producers are making so much money from increasing prices they don’t really need to increase production to keep making more and more.

Then there are “impediments” to investment -- unfriendly governments, insurgencies, environmental concerns -- and the incredibly high cost of producing oil from remote places such as the arctic or thousands of feet under the sea. All this adds up to the bottom line judgment that the world probably won’t be producing quite as much oil as previously estimated.

Is this reduction in estimated world production going to cause much pain? It seems not, for the EIA is projecting per capita energy use in the US will stay about the same and energy use per dollar of real GDP will drop to about half the current rate. Thus while US oil consumption will continue to grow to 27.6 million b/d by 2030, vs. 21.6 million today, there is no crisis in the foreseeable future. Domestic oil production will remain about the same so imports will continue to grow modestly

All in all the EIA projects a rosy future for energy supplies. Natural gas will come from greatly increased imports of LNG and prices will drop to a reasonable $4-5 per thousand cubic feet, and peak usage won’t occur until 2025.

It sounds great unless of course, it is a house of cards. The same PowerPoint bullet that asserts that the EIA’s reassessment is “not due to ‘Peak Oil’ considerations” goes on to say, “we are following this issue closely.”

So there you have it, the US Government officially is not yet ready to say that “Peak Oil” will have an impact in the next 25-30 years, but they now willing to admit in public that they are watching it closely. A new threshold has been crossed on the way to reality.

Thursday, December 22, 2005

A risk of total collapse

Guardian Unlimited

We would be foolish to take for granted the permanence of our fragile global civilisation

By Dylan Evans

Is it possible that global civilisation might collapse within our lifetime or that of our children? Until recently, such an idea was the preserve of lunatics and cults. In the past few years, however, an increasing number of intelligent and credible people have been warning that global collapse is a genuine possibility. And many of these are sober scientists, including Lord May, David King and Jared Diamond - people not usually given to exaggeration or drama.

The new doomsayers all point to the same collection of threats - climate change, resource depletion and population imbalances being the most important. What makes them especially afraid is that many of these dangers are interrelated, with one tending to exacerbate the others. It is necessary to tackle them all at once if we are to have any chance of avoiding global collapse, they warn.

Many societies - from the Maya in Mexico to the Polynesians of Easter Island - have collapsed in the past, often because of the very same dangers that threaten us. As Diamond explains in his recent book, Collapse, the Maya depleted one of their principal resources - trees - and this triggered a series of problems such as soil erosion, decrease of useable farmland and drought. The growing population that drove this overexploitation was thus faced with a diminishing amount of food, which led to increasing migration and bloody civil war. The collapse of the civilisation on Easter Island followed a similar pattern, with deforestation leading to other ecological problems and warfare.

Unlike these dead societies, our civilisation is global. On the positive side, globalisation means that when one part of the world gets into trouble, it can appeal to the rest of the world for help. Neither the Maya nor the inhabitants of Easter Island had this luxury, because they were in effect isolated civilisations. On the negative side, globalisation means that when one part of the world gets into trouble, the trouble can quickly be exported. If modern civilisation collapses, it will do so everywhere. Everyone now stands or falls together.

Global collapse would probably still follow the same basic pattern as a local collapse but on a greater scale. With the Maya, the trouble began in one region but engulfed the whole civilisation. Today, as climate change makes some areas less hospitable than others, increasing numbers of people will move to the more habitable areas. The increasing population will make them less habitable and lead to further migration in a domino effect. Huge movements of people and capital will put the international financial system under strain and may cause it to give way. In his book The Future of Money, the Belgian economist Bernard Lietaer argues that the global monetary system is already very unstable. Financial crises have certainly grown in scale and frequency over the past decade. The South-east Asian crisis of 1997 dwarfed the Mexican crisis of 1994 and was followed by the Russian crash of 1998 and the Brazilian crisis of 1999. This is another example of the way globalisation can exacerbate rather than minimise the risk of total collapse.

This would not be the end of the world. The collapse of modern civilisation would entail the deaths of billions of people but not the end of the human race. A few Mayans survived by abandoning their cities and retreating into the jungle, where they continue to live to this day. In the same way, some would survive the end of the industrial age by reverting to a preindustrial lifestyle.

The enormity of such a scenario makes it hard to imagine. It is human nature to assume that the world will carry on much as it has been. But it is worth remembering that in the years preceding the collapse of their civilisation, the Mayans too were convinced that their world would last forever.

·Dylan Evans is a senior lecturer at the University of the West of England

Tuesday, December 20, 2005

Burning Buried Sunshine: Human Consumption Of Ancient Solar Energy

By Jeffrey S. Dukes

Click to read entire article

Abstract. Fossil fuels developed from ancient deposits of organic material, and thus can be thought of as a vast store of solar energy from which society meets >80% of its current energy needs. Here, using published biological, geochemical, and industrial data, I estimate the amount of photosynthetically fixed and stored carbon that was required to form the coal, oil, and gas that we are burning today. Today’s average U.S. Gallon (3.8 L) of gasoline required approximately 90 metric tons of ancient plant matter as precursor material. The fossil fuels burned in 1997 were created from organic matter containing 44 × 1018 g C, which is >400 times the net primary productivity (NPP) of the planet’s current biota. As stores of ancient solar energy decline, humans are likely to use an increasing share of modern solar resources. I conservatively estimate that replacing the energy humans derive from fossil fuels with energy from modern biomass would require 22% of terrestrial NPP, increasing the human appropriation of this resource by ~50%.

Monday, December 19, 2005

Goldman's Murti Says `Peak Oil' Risks Sending Prices Above $105

Goldman Sachs Group Inc. analyst Arjun Murti, who roiled oil markets in March by saying crude may reach $105 a barrel, now says that may be conservative if the ``peak oil'' theory is right and world supplies are running out.

The belief that the world's oil supply is close to an irreversible drop is no longer ``on the fringes'' of the market, said a research report by New York-based Murti, who forecasts oil of $50 to $105 a barrel until 2009. UBS AG analyst James Hubbard, a former oil engineer at Schlumberger Ltd., said an inevitable decline in supply will start sooner and be worse than expected unless investment increases for many years.

A jump above $105 a barrel ``is possible if we don't invest the right amount of money,'' Hubbard said in an interview in London. ``There will be a peak in production earlier than expected, and that post-peak decline will be more dramatic than currently assumed unless there is a sustained increase in investment in oil and gas production, greater consumer efficiency and alternative energy sources.''

While Saudi Arabian Oil Minister Ali al-Naimi and Exxon Mobil Corp. President Rex Tillerson say oil supplies will last for decades, energy traders are increasingly debating the amount of available crude. Oil's two-year jump to about $60 a barrel came as rising demand from China surprised suppliers, who had failed to spend on new pipelines, rigs and refineries.

Investors who back the peak oil theory, such as Boone Pickens, a Dallas hedge fund manager and former oil executive, have fueled the price rally of the past two years, during which oil almost doubled, to reach a record $70.85 in August. Prices ended last week at $58.06 in New York.

`Easy Oil'

The peak oil theory is based partly on the work of M. King Hubbert, a former Royal Dutch Shell Plc geophysicist who accurately predicted in 1949 that U.S. domestic onshore oil production would plateau by about 1970.

Chevron Corp., the second-largest U.S.-based oil company, in its advertising declares, ``One thing is clear: The era of easy oil is over.'' Estimates vary on how much oil remains to be produced and when supplies will peak.

Tillerson in September told the World Petroleum Congress in Johannesburg that a U.S. Geological Survey estimate of 2 trillion barrels of conventional oil reserves still to be recovered is conservative, with the range of possibility as high as 7 trillion barrels. Less than 1 trillion have been pumped already.

Goldman's Murti in March skirted the peak oil debate. In a report last week, the analyst said it's something to monitor.

``It is possible that the peak oil theorists are correct,'' he wrote. ``If so, we think that the duration and magnitude of energy commodity price increases would be likely to far exceed what we are contemplating.'' He couldn't be reached for comment.

More Oil Coming

Without a peak in production, Murti expects the price of New York oil to fall to about $35 a barrel in New York between 2010 and 2014. That matches forecasts from Schroders Plc for $35.50 by 2010 and is lower than Merrill Lynch & Co. predictions for $40 to $45 by the end of the decade.

The debate and high prices are contributing to an increase in investment in new technologies that will help keep oil flowing, said UBS's Hubbard, who wrote in October that some 3 trillion barrels probably remain to be pumped.

Murti ranked third last year among researchers who cover oil and gas companies, according to Institutional Investor magazine.

Goldman, the second-biggest U.S. securities firm, estimates about $50 billion is invested in its commodity index, where crude oil has largest weighting. The bank's view is that oil will average $68 a barrel in New York next year. Prices may stay close to $60 for ``three to five years'' before falling to ``$45 at the most'' by 2010, Jeffrey Currie, the bank's head for commodities research in London, said in August.

Longer Plateau

The International Energy Agency, an adviser to 26 industrialized nations, said in a 150-page book in September that technological improvements will help increase world oil supplies, dismissing the peak oil theory. The IEA expects $3 trillion of investment for each the oil and gas industries through 2030.

``Most commentators, putting aside the depletion argument, do take the view that at least over that period through 2010 supplies will be made available,'' said John Waterlow, an analyst at Wood Mackenzie Consultants Ltd. in Edinburgh.

Oil-producing nations are seeking to extend the life of their reserves. Norway, which ranks behind Saudi Arabia and Russia in world oil exports, forecasts its production will peak in 2008. Oil and Energy Minister Odd Roger Enoksen in a Dec. 8 interview said he thinks it will come later.

``We had thought we would very quickly see a strong drop in oil production, but now we expect to keep it at a plateau for longer,'' he said.

The biggest questions center around Saudi Arabia, the world's largest oil exporter. The most vocal skeptic of Saudi Arabia is Matthew Simmons, chairman of energy investment bank Simmons & Co. He's author of ``Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,'' in which he argues that fields are about to decline because water injection has damaged reservoirs.

The nation doesn't open its industry to scrutiny. Of known oil reserves, Saudi Arabia holds about a fourth. Minister Al-Naimi in Johannesburg said its holdings may be 200 billion barrels more than a current estimate of 264 billion.

Friday, December 16, 2005

Worse Than Fossil Fuel

By George Monbiot

Biodiesel enthusiasts have accidentally invented the most carbon-intensive fuel on earth.

Over the past two years I have made an uncomfortable discovery. Like most environmentalists, I have been as blind to the constraints affecting our energy supply as my opponents have been to climate change. I now realise that I have entertained a belief in magic.

In 2003, the biologist Jeffrey Dukes calculated that the fossil fuels we burn in one year were made from organic matter “containing 44×10 to the 18 grams of carbon, which is more than 400 times the net primary productivity of the planet’s current biota.”(1) In plain English, this means that every year we use four centuries’ worth of plants and animals.

The idea that we can simply replace this fossil legacy – and the extraordinary power densities it gives us – with ambient energy is the stuff of science fiction. There is simply no substitute for cutting back. But substitutes are being sought everywhere. They are being promoted today at the climate talks in Montreal, by states – such as ours – which seek to avoid the hard decisions climate change demands. And at least one of them is worse than the fossil fuel burning it replaces.

The last time I drew attention to the hazards of making diesel fuel from vegetable oils, I received as much abuse as I have ever been sent by the supporters of the Iraq war. The biodiesel missionaries, I discovered, are as vociferous in their denial as the executives of Exxon. I am now prepared to admit that my previous column was wrong. But they’re not going to like it. I was wrong because I underestimated the fuel’s destructive impact.

Before I go any further, I should make it clear that turning used chip fat into motor fuel is a good thing. The people slithering around all day in vats of filth are perfoming a service to society. But there is enough waste cooking oil in the UK to meet one 380th of our demand for road transport fuel(2). Beyond that, the trouble begins.

When I wrote about it last year, I thought that the biggest problem caused by biodiesel was that it set up a competition for land(3). Arable land that would otherwise have been used to grow food would instead be used to grow fuel. But now I find that something even worse is happening. The biodiesel industry has accidentally invented the world’s most carbon-intensive fuel.

In promoting biodiesel – as the European Union, the British and US governments and thousands of environmental campaigners do – you might imagine that you are creating a market for old chip fat, or rapeseed oil, or oil from algae grown in desert ponds. In reality you are creating a market for the most destructive crop on earth.

Last week, the chairman of Malaysia’s Federal Land Development Authority announced that he was about to build a new biodiesel plant(4). His was the ninth such decision in four months. Four new refineries are being built in Peninsula Malaysia, one in Sarawak and two in Rotterdam(5). Two foreign consortia – one German, one American – are setting up rival plants in Singapore(6). All of them will be making biodiesel from the same source: oil from palm trees.

“The demand for biodiesel,” the Malaysian Star reports, “will come from the European Community … This fresh demand … would, at the very least, take up most of Malaysia’s crude palm oil inventories”(7). Why? Because it’s cheaper than biodiesel made from any other crop.

In September, Friends of the Earth published a report about the impacts of palm oil production. “Between 1985 and 2000,” it found, “the development of oil-palm plantations was responsible for an estimated 87 per cent of deforestation in Malaysia”(8). In Sumatra and Borneo, some 4 million hectares of forest has been converted to palm farms. Now a further 6 million hectares is scheduled for clearance in Malaysia, and 16.5m in Indonesia.

Almost all the remaining forest is at risk. Even the famous Tanjung Puting National Park in Kalimantan is being ripped apart by oil planters. The orang-utan is likely to become extinct in the wild. Sumatran rhinos, tigers, gibbons, tapirs, proboscis monkeys and thousands of other species could go the same way. Thousands of indigenous people have been evicted from their lands, and some 500 Indonesians have been tortured when they tried to resist(9). The forest fires which every so often smother the region in smog are mostly started by the palm growers. The entire region is being turned into a gigantic vegetable oil field.

Before oil palms, which are small and scrubby, are planted, vast forest trees, containing a much greater store of carbon, must be felled and burnt. Having used up the drier lands, the plantations are now moving into the swamp forests, which grow on peat. When they’ve cut the trees, the planters drain the ground. As the peat dries it oxidises, releasing even more carbon dioxide than the trees. In terms of its impact on both the local and global environments, palm biodiesel is more destructive than crude oil from Nigeria.

The British government understands this. In the report it published last month, when it announced that it will obey the European Union and ensure that 5.75% of our transport fuel comes from plants by 2010, it admitted that “the main environmental risks are likely to be those concerning any large expansion in biofuel feedstock production, and particularly in Brazil (for sugar cane) and South East Asia (for palm oil plantations).”(10) It suggested that the best means of dealing with the problem was to prevent environmentally destructive fuels from being imported. The government asked its consultants whether a ban would infringe world trade rules. The answer was yes: “mandatory environmental criteria … would greatly increase the risk of international legal challenge to the policy as a whole”(11). So it dropped the idea of banning imports, and called for “some form of voluntary scheme” instead(12). Knowing that the creation of this market will lead to a massive surge in imports of palm oil, knowing that there is nothing meaningful it can do to prevent them, and knowing that they will accelarate rather than ameliorate climate change, the government has decided to go ahead anyway.

At other times it happily defies the European Union. But what the EU wants and what the government wants are the same. “It is essential that we balance the increasing demand for travel,” the government’s report says, “with our goals for protecting the environment”(13). Until recently, we had a policy of reducing the demand for travel. Now, though no announcement has been made, that policy has gone. Like the Tories in the early 1990s, the Labour administration seeks to accommodate demand, however high it rises. Figures obtained last week by the campaigning group Road Block show that for the widening of the M1 alone the government will pay £3.6 billion – more than it is spending on its entire climate change programme(14). Instead of attempting to reduce demand, it is trying to alter supply. It is prepared to sacrifice the South East Asian rainforests in order to be seen to do something, and to allow motorists to feel better about themselves.

All this illustrates the futility of the technofixes now being pursued in Montreal. Trying to meet a rising demand for fuel is madness, wherever the fuel might come from. The hard decisions have been avoided, and another portion of the biosphere is going up in smoke.


1. Jeffrey S. Dukes, 2003. Burning Buried Sunshine: Human Consumption Of Ancient Solar Energy. Climatic Change 61: 31-44.

2. The British Association for Biofuels and Oils estimates the volume at 100,000 tonnes a year. BABFO, no date. Memorandum to the Royal Commission on Environmental Pollution.


4. Tamimi Omar, 1st December 2005. Felda to set up largest biodiesel plant. The Edge Daily.

5. See e.g. Zaidi Isham Ismail, 7th November 2005. IOI to go it alone on first biodiesel plant.  No author, 25th November 2005.

Hope nine-month profit hits RM841mil.  No author, 26th November 2005.

Hope to invest RM40mil for biodiesel plant in Netherlands.  No author, 23rd November 2005.

Malaysia IOI Eyes Green Energy Expansion in Europe.

6. Loh Kim Chin, 26th October 2005. Singapore to host two biodiesel plants, investments total over S$80m. Channel NewsAsia.

7. C.S. Tan, 6th October 2005. All Plantation Stocks Rally.

8. Friends of the Earth et al, September 2005. The Oil for Ape Scandal: how palm oil is threatening orang-utan survival. Research report.

9. ibid.

10. Department for Transport, November 2005. Renewable Transport Fuel Obligation (RTFO) feasibility report. roads_610329-01.hcsp#P18_263

11. E4Tech, ECCM and Imperial College, London, June 2005. Feasibility Study on Certification for a Renewable Transport Fuel Obligation. Final Report.

12. Department for Transport, ibid.

13. ibid.

Thursday, December 15, 2005

Petrodollar Warfare Oil, Iraq and the Future of the Dollar

The invasion of Iraq may well be remembered as the first oil currency war. Far from being a response to 9-11 terrorism or Iraq's alleged weapons of mass destruction, William R. Clark's new book, Petrodollar Warfare Oil, Iraq and the Future of the Dollar, argues that the invasion was precipitated by two converging phenomena: the imminent peak in global oil production, and the ascendance of the euro currency.

Energy analysts agree that world oil supplies are about to peak, after which there will be a steady decline in supplies of oil. Iraq, possessing the world's second largest oil reserves, was therefore already a target of U.S. geostrategic interests. Together with the fact that Iraq had switched its oil currency trade to euros - rather than U.S. dollars - the Bush administration's unreported aim was to prevent further OPEC momentum in favor of the euro as an alternative oil transaction currency standard.

Meticulously researched by Clark, a Project Censored Award Winning Author, Petrodollar Warfare examines U.S. dollar hegemony and the unsustainable macroeconomics of 'petrodollar recycling,' pointing out that the issues underlying the Iraq War also apply to geopolitical tensions between the U.S. and other countries including the member states of the European Union (EU), Iran, Venezuela, and Russia.

The author warns that without changing course, the American Experiment will end the way all empires end - with military over-extension and subsequent economic decline. He recommends the multilateral pursuit of both energy and monetary reforms within a United Nations framework to create a more balanced global energy and monetary system - thereby reducing the possibility of future oil depletion and oil currency-related warfare.

A sober call for an end to aggressive U.S. unilateralism, Petrodollar Warfare is a unique contribution to the debate about the future global political economy.

About the Author: William Clark has received two Project Censored awards, first in 2003 for his ground-breaking research on the Iraq War, oil currency conflict, and U.S. geostrategy and again in 2005 for his research on Iran's upcoming euro-denominated oil bourse. (Censored 2004: The Top 25 Censored Stories, Seven Stories Press). He is an Information Security Analyst at Argosy Omnimedia, and holds a Master of Business Administration and Master of Science in Information and Telecommunication Systems from Johns Hopkins University. He lives in Rockville, Maryland.

288 pages 6 x 9" Current Affairs / Political Science & Government / Finance Pb ISBN 0-86571-514-9 US$17.95 / Can$24.95

Advanced Praise for Petrodollar Warfare
While the economic advantages accruing to American elites from US dollar hegemony have been mostly hidden from view, the impending end of dollar supremacy will affect everyone in obvious, painful ways. In this riveting macro-economic investigation, William Clark guides us through the hidden history of the petrodollar era and deftly uncovers the basis of current US strategy in the Middle East. If you think you understand the headlines, think again: current events can only be understood when we follow the money.

This sobering book not only elucidates our past and present, but shows the way toward global monetary reform. As Clark makes clear, America's founding ideals can only be fulfilled if the people of the US are willing to confront the twin demons of proto-fascism and kleptocracy.
- 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

It is clear to almost all informed observers that both the US and the world are entering new, dangerous, and quite uncharted territory, especially now that questions about global oil supplies have exploded into mainstream prominence. All of this leads to an ever more complex world with no simple explanations, and nowhere is this more true than the tragic interplay between oil, politics, and money.

Petrodollar Warfare is therefore to be greatly welcomed, since William Clark's book provides a badly needed, carefully researched explanation of the deep and dark mechanisms underlying international movements of money and military forces. Clark tells the fascinating and distressing story of how America achieved world dominance and looks with tough honesty and realism at what the future might hold. If Petrodollar Warfare's bold analysis can help more Americans to understand the current pathology of their own extraordinary country, then it will assist both the world and America to find a better path into a less violent and energy-addicted future.
- Julian Darley, founder of Global Public Media and the Post Carbon Institute, author of High Noon for Natural Gas: The New Energy Crisis and Relocalize Now! Getting Ready for Climate Change and the End of Cheap Oil.

Peak Oil Scenario Planning

Raise the Hammer

By Lakis Polycarpou

As we creep ever further into the new millennium, it is becoming increasingly clear (the highly doubtful claims of "cornucopians" notwithstanding) that the age of oil will soon be ending.

Oil is a finite resource. Its production will, at some point, peak and begin to decline, and there are numerous indications that we are at or past that point.

The picture for natural gas is slightly more complex, but potentially more dire in the short-term, as gas supplies in North America and the U.K. are in decline, and gas is not easily shipped overseas.

What will become of suburbia, where most North Americans now live and depend on oil and natural gas for transportation, home heating, and a large percentage of electricity generation?

Peak oil experts and commentators paint visions of the future that range from mildly pessimistic to apocalyptic. But the truth is that no one knows exactly how much energy will be available at any given point in the depletion era, or how different regions and populations will respond.

Rather than engage in pointless debates about precisely what will happen, it makes far more sense-especially at the regional and local levels-to begin serious planning based on differing scenarios, with the awareness that changes could come in phases and that any model must adjust to reality as it unfolds.

As an example, one could project three hypothetical scenarios for a typical, middle-class suburb:

Best-Case Scenario

In the best-case scenario, the rapid adoption of efficiency measures, renewable energies and synthetic fuels (including biofuel, if it can be produced with a significant net energy gain) gives society a long lead-time to adjust to depletion, gradually reducing its energy consumption to a sustainable level.

A series of recessions causes serious economic hardship for many, but also reduces energy demand. Energy substitutions in the developing world (from heating oil to natural gas and coal, for example) keep transportation fuel affordable, if expensive, in the short- to middle-term. Enlightened national leadership combined with market forces reverses the trend toward sprawl.


In this case, successful localities execute a long-term plan to stop sprawl and develop downtowns and main streets where they exist (or build them where they do not), and gradually shift toward a more sustainable (and sane) living arrangement, centered around relatively dense, walkable towns and neighborhoods connected by public transit with goods supplied by electric rail.

Policies to encourage local agriculture and the rebuilding of regional economies reverse globalization, saving energy. Some people notice a decline in perceived standard of living, but are compensated by the elimination of many economic distortions caused by the current globalization regime.

Middle Case Scenario

In the middle case, personal transportation in suburbia rapidly becomes unaffordable, and high oil prices spark either massive inflation or trigger a series of severe recessions.

Assuming policy makers use both the financial and legislative means available to avoid mass bankruptcies, suburbanites keep their houses, but find living in them increasingly difficult. Long commutes that cannot be accomplished through public transportation end.

Residents cut back drastically on consumption, bankrupting many chain merchants. Food is available, but very expensive, and there are regular spot shortages, leading to epidemics of hunger and malnutrition.

Home heating in cold climates becomes a serious problem; many families take periodic refuge in shelters. Work does not disappear, but jobs become increasingly scarce.


In this case, suburbanites survive with an ad hoc combination of car share co-ops, efficient vehicle purchases, biking, telecommuting and local gardening. Whenever possible, people install wood or even coal-burning stoves for heating, along with solar panels.

Towns and cities do better if they focus on facilitating organic changes (by building or designating bike paths and rewriting zoning rules to provide maximum flexibility, for example) rather than resisting them.

In this scenario, the importance of electricity becomes paramount. The grid still works to an extent, but electricity prices escalate rapidly, and there are sporadic blackouts which make ordinary business difficult. Places where small-scale solar, wind or mini-hydroelectric power is available do much better.

Worst-Case Scenario

In the worst case, an economic crash causes mass bankruptcies. Collapse is not confined to one sector; everyone is affected. Global trade breaks down; nothing is available that's not produced locally.

National authorities take action, but are overwhelmed by the scale of the crisis; attempts to increase efficiency and develop alternatives come too late and accomplish too little. Gas rationing takes effect.

The food production chain also breaks down. In some areas, food supplies are so scarce that large numbers of people starve, while more successful regions soon find themselves overwhelmed by oil crash refugees.

Work as we know it vanishes, though trade and barter still exist.


At the local or neighborhood level, communities do better by developing a collective mindset, setting up co-ops or other legal structures to keep loan defaulters afloat and living in their own homes.

This is in the interest of everyone; the alternative is either a rapid depopulation of neighborhoods-a neither safe nor economically sustainable outcome for those who remain-or an epidemic of illegal squatting, with former owners staying on in homes they have defaulted on but have not been evicted from.

In the final scenario, energy intensive technology disappears, but the importance of knowledge remains. Skills for growing food, making clothes, insulating buildings, and fixing household items become vital.

Preparation for the final scenario includes the establishment of seed-banks and knowledge centers to disseminate information on how to most efficiently grow food on available land, using Permaculture, Grow Biointensive, or similar organic methods.

For a small investment, local governments could also sponsor classes on wood and metal working and other forgotten skills. After the crash, residents in successful suburbs could be encouraged to set up "cottage" industries, perhaps through a system of microloans.


In all cases, a mindset of using existing infrastructure is less important than one of refusing to allow blight to take hold.

Abandoned strip malls, for example, should not be allowed to fester for years as decaying buildings; rather, they should be torn down and either returned to farmland or converted to higher-density, mixed-use neighborhoods.

Even with oil supplies in decline, it seems at least plausible that a great portion of the resources now spent building sprawl could be diverted to retrofitting and revitalizing suburbia.

If, instead of building more spread out, single use neighborhoods and strip-malls, we used our current building energy for infill development (using principles of density, walkability and mixed use currently associated with "New Urbanism" but known since Jane Jacobs wrote The Death and Life of Great American Cities in 1961), we could begin generating an ever-more efficient economy, and perhaps stretch out the tail of oil depletion.

The highest priority, then, should be to stop current and future sprawl development.

Scenario planning is not a new concept, but for some reason the idea of local governments preparing for peak oil - despite the fact that no one disputes that oil is a finite resource - has not taken hold.

But if local governments are able to develop response plans for the relatively unlikely event of a terrorist attack, then is it too much to ask that they consider how to respond to the eventual certainty of oil and gas depletion?