PEAK OIL AND GLOBAL WARMING
Saturday June 16, 2007
[This is a slightly longer version of an essay that first appeared in Business Week]
Eugene Linden
With global oil production basically stalled for the past two years, the controversial prediction that the world is fast approaching maximum oil output is looking a bit less controversial. At first blush, those concerned about global warming should be delighted if this is the case. After all, what better way to prod the move towards carbon-free, climate-friendly alternative energy? Actually, the U.S. is completely unprepared for peak oil, as it's called, and the wrenching adjustments it would entail could easily accelerate global warming as nations turned to coal for energy. Moreover, regardless of the implications for climate change, peak oil represents a mortal threat to the U.S. economy.
Peak oil refers to the point at which world oil production plateaus before beginning to decline, as depletion of the world's remaining reserves offsets ever increased drilling. Some experts argue that we're already there, and that we will not likely exceed the 84.5 million barrels per day production peaks reached in 2005 and 2006. If so, global production will bump along near these levels for some years before beginning an inexorable decline.
What would that mean? With alternative energy still far too small to grow fast enough to make up the difference, global economic growth would slow, stop, and then reverse; international tensions would soar as nations sought access to diminishing supplies, enriching and enabling autocratic rulers in the unstable oil states in the process; and, unless some other sources of energy could be ramped up with extreme haste, the world could plunge into a new Dark Age. Even as faltering economies burned less oil, carbon loading of the atmosphere might accelerate as nations turned to vastly dirtier coal.
Hmm, given such unpleasant possibilities don't you think this issue would rank a little higher on the radar screen?
Actually, it's dumbfounding that Peak Oil isn't a day-in, day-out obsession for the press and policy makers. Picking a date for peak oil is exceedingly complicated, involving uncertainties ranging from how much oil might be recovered from unconventional sources such as oil sands to determining whether secretive oil exporting nations are telling the truth about their reserves. Even if proponents are wrong that the peak has already arrived, however, there are enough disturbing omens out there - e.g. declining production in most of the world's great oil fields and no new super-giant fields to take up the slack - to merit an intense international effort to understand the issue. For those interested in a robust discussion of the details, I'd highly recommend visiting theoildrum.com, where some of the best minds in the business ventilate all these issues.
Regardless of whether peak oil has arrived globally, the stark reality is that it will arrive much sooner for the United States -- in the form of peak global oil exports. Since we import nearly two-thirds of the oil we consume each year, oil available for export is the figure Americans should be concerned about. Fast-rising domestic consumption in the oil exporting nations, and increasing demands by big importers like China, means a scramble to maintain supplies to the U.S. unless world production rises rapidly. Production isn't rising, however; it has stalled. Call it de facto Peak Oil or Peak Oil Lite, but it means is that the United States is entering a brave new world in which we have to scramble to maintain levels of existing imports, much less increase the amount of oil we bring in.
We will know soon enough whether the extra capacity to raise production really exists. If not, it's too late to avoid significant pain. Basic math and the clock tell the story. Taken together all alternatives - geothermal, solar, wind, etc. -- produce only 3% of the energy supplied by oil. If oil demand rises by 2% while production remains flat, production of alternative energy would have to grow by 60% a year - more than twice as fast as the growth of wind power, the fastest growing alternative energy -- and all this incremental energy would somehow have to be delivered to transportation (which consumes most of the oil produced each year) just to stay even with the growth in demand. Nuclear and hydropower together produce ten times the power of wind, geothermal and solar power, of course, but even if nations put aside environmental concerns, it takes many years to build either nuclear plants or dams, and it's getting harder to find un-dammed rivers.
There are many things that we in the U.S. should be doing right now. If a tax on oil makes sense from a climate change perspective, it makes double sense squared from the point of view of extending remaining oil supplies. Improving efficiency and scaling up alternative sources must be a priority, but, recognizing that nations will turn to cheap coal (in recent years 80% of global growth in coal use has come from China), major efforts should be directed towards de-fanging this fuel, which produces more carbon dioxide per ton than any other energy source.
If the peakists are wrong, we'll still be better off with these actions, but if they are right, major efforts right now may be the only way to avert a new Dark Age in an overheated world. Unfortunately, our collective policy on peak oil seems to be cross our fingers and hope it's not true. It that worthy of a great civilization facing a threat to the energy source that propelled much of its prosperity and growth?
