It is hard to overstate the impact the impending decline in global oil production will have on society. We tend to take all the modern inventions and conveniences for granted, but many are only possible with cheap energy. Our current standard of living should really be viewed largely as a historical anomaly caused by an unprecedented energy bonanza, not as a midpoint in a linear pattern of human development. Remove the cheap oil bonanza and all bets are off. As a report by the Department of Energy stated "The peaking of world oil production presents the U.S. and the world with an
unprecedented risk management problem."
I wrote the following oped on peak oil for my local paper. They printed it but did not post it on their website (I shortened and edited it slightly for Daily Kos).
(Continued below)
When oil production first started on a large scale in Pennsylvania in 1859, it started a incredible transformation of the global economy. Suddenly we had a massive influx of cheap, safe, and transportable energy, representing solar energy accumulated over hundreds of millions of years (some estimates place the energy content of a barrel of oil as equivalent to the work of eight people for an entire year). This bonanza was unprecedented in human history and was largely responsible for rapid industrialization, an increased standard of living, and drastic changes in transportation, agriculture, and geopolitics.
This cheap and abundant energy also allowed us to isolate ourselves from our food sources, create petrochemicals to increase food production, develop a system of global trade, quadruple our population, and move increasingly long distances from our places of work. Unfortunately, these adaptations also had the unintended effect of making us increasingly reliant on oil. The U.S. uses 25% of the world's oil making us especially dependent on cheap oil. And, because our economy is based on constant growth, we not only need oil, we need larger amounts every year.
After 150 years of oil production we have nearly reached the point at which the oil supply can no longer meet the demand. Based on extremely optimistic estimates of future oil discoveries, the federal government estimates that oil production will peak in 30 years. But many independent analysts have concluded that the peak will actuallyoccur in this decade and, in fact, may have already occurred.
In 1956, geologist M. King Hubbert examined oil production and discovery curves and predicted that U.S lower 48 oil production would peak in about 1970. His predictions were largely dismissed at the time, but U.S. oil production did peak in 1970 and has been declining steadily ever since. Using similar techniques, many independent oil industry analysts have predicted a global peak in oil production between 2005 and 2010. In fact, 33 of the 48 top oil producing countries already have declining production.
Regardless of the exact date of the oil production peak, it is clear that we cannot continue to use 84 million barrels of oil a day indefinitely. As oil prices increase, tar sands, oil shale, and synthetic fuel from coal may slow the decline, but they can't replace cheap oil.
And we cannot drill our way out of this crisis. Because most of the globe has already been intensively explored there is little chance of finding many major new fields. Global oil discovery peaked in the late 1960's and has been declining ever since. In 2005, despite high prices, we used 6 times as more oil than was discovered. The optimistic estimate of 10 billion barrels in ANWR amounts to only about 16 months of U.S. consumption.
What will be the effect of declining global oil production? In the short term it will lead to volatile but increasing oil prices, supply disruptions, economic decline, and more resource wars. In the long-term we will have to find ways to live with lower energy consumption. This means more local agriculture with fewer petrochemicals, more local industry, increased alternative energy use, and limited mobility. Our future standard of living will largely be determined by our ability to do more with less energy.
The transition to a post-oil economy will take at least a decade and cost trillions of dollars. Time and money we may no longer have. It is imperative that we use our current energy wealth to make the transition to an alternative energy economy. We cannot afford to burn all the cheap oil without making real progress toward this goal.
For a good introduction to Peak Oil read "The Party's Over" by Richard Heinberg