For the second day in a row, a major news publication prints an important article on peak oil. After the Independent's strongly worded criticism of the numbers in BP's yearly statistical almanach, it is Business Week's turn to provide a stark assessment of the oil situation. The article is short and an excellent introduction to the issues surrounding peak oil; I can only recommned that you read it in full.
First, the meat of the Independent article (which got the full front page headline, as you can see here):
Scientists have criticised a major review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit.
BP's Statistical Review is the most widely used estimate of world oil reserves but as Dr Campbell points out it is only a summary of highly political estimates supplied by governments and oil companies.
As Dr Campbell explains: "When I was the boss of an oil company I would never tell the truth. It's not part of the game."
A survey of the four countries with the biggest reported reserves - Saudi Arabia, Iran, Iraq and Kuwait - reveals major concerns. In Kuwait last year, a journalist found documents suggesting the country's real reserves were half of what was reported. Iran this year became the first major oil producer to introduce oil rationing - an indication of the administration's view on which way oil reserves are going.
The doubts about oil-rich countries' reserves has long been voiced by many people aware of the problem. But as people quote the BP numbers unquestioningly, and BP uses the political data similarly unquestioningly, politicians and the wider public either won't know about it or have an excuse to ignore the topic.
To rexspond to geologists, BP sent out ... an economist - who made true the old joke that "to believe that things can grow on infinitely in a finite world, you have to be insane or an economist":
This scenario is flatly denied by BP, whose chief economist Peter Davies has dismissed the arguments of "peak oil" theorists.
"We don't believe there is an absolute resource constraint. When peak oil comes, it is just as likely to come from consumption peaking, perhaps because of climate change policies as from production peaking."
That's the quite of dialogue we have:
- "resource is finite"
- "no, it's not finite"
Guess who we still listen to?
In that context, the article in BusinessWeek is like a breath of fresh air:
Oil output has stalled, and it's not clear the capacity exists to raise production
With global oil production virtually stalled in recent years, controversial predictions that the world is fast approaching maximum petroleum output are looking a bit less controversial.
Here, let me add a bonus: a 1976 video of King Hubbert, the first scientist to propose the idea that there would be a peak in oil production - and who got the date for the US peak (1970) exactly right (well, within one year):
After describing the consequences of peak oil (potentially devastating economic recession, geopolitical tensions, and an acceleration og climate change as we'd switch to coal), they say this:
GIVEN SUCH UNPLEASANT possibilities, you'd think peak oil would be a national obsession. But policymakers can hide behind the possibility that vast troves will be available from unconventional sources, or that secretive oil-exporting nations really have the huge reserves they claim. Yet even if those who say that the peak has arrived are wrong, enough disturbing omens—for example, declining production in most of the world's great oil fields and no new superfields to take up the slack—exist for the issue to merit an intense international focus.
This is the most frustrating bit in the whole discussion about peak oil - the refusal by politicians and other entities that can shape policy to even consider that peak oil is possible, and that something should be done just in case.
In a way, this mirrors the reaction to climate change, but in either case, we're wasting valuable time arguin whether it's a certainty or not, whereas the potential risks are so huge that it makes sense to take preventive measures to avoid them even if their probability of occurrence is fairly low. But nope.
(As an aside here, there is a debate within the peak oil world as to whether the more pessimistic scenarios regarding climate change can happen taking into consideration that the fossil fuel quantities estimated to be remaining do not seem to make it possible to emit so much carbon dioxide in the atmosphere. In any case, either or both will happen in the next dacades, and the good news is that there is a 'simple' solution to both: reduce our consumption of fossil fuels and the corresponding emissions of fossil fuels wastes)
And BusinessWeek notes another stark point:
The reality is that it will be here much sooner for the U.S.—in the form of peak oil exports. Since we import nearly two-thirds of the oil we consume, global oil available for export should be our bigger concern. Fast-growing domestic consumption in oil-exporting nations and increasing appetites by big importers such as China portend tighter supplies available to the U.S., unless world production rises rapidly. But output has stalled. Call it de facto peak oil or peak oil lite. It means the U.S. is entering an age when it will have to scramble to maintain existing import levels.
I've already written about the fact that amongst the top 6 countries with the highest oil consumption increase in recent years you find Saudi Arabia, Russia and Iran, i.e. 3 big producers flush with cash and buying plenty of cars which use heavily subsidized gas.
Highest oil consumption increases between 2000 and 2006 (resp. production increases)
China: +2,670,000 b/d (+430,000 b/d)
USA: +860,000 b/d (-460,000 b/d)
Saudi Arabia: +470,000 b/d (+1,370,000 b/d)
Russia: +350,000 b/d (+3,230,000 b/d)
Iran: +350,000 b/d (+520,000 b/d)
India: +320,000 b/d (+25,000 b/d)
Canada: +290,000 b/d (+420,000 b/d)
United Arab Emirates: +150,000 b/d (+350,000 b/d)
Spain: +150,000 b/d (nil)
As you can see, higher consumption has eaten up between one and two thirds of the production increases in some of the biggest oil producers (including Canada, whose net exports have barely budged...)
And the article ends up with all the right notes, including a call for gas taxes, and the nee to avoid a switch to coal:
There are many things we in the U.S. can do (and should have been doing) other than the present policy of crossing our fingers. If an oil tax makes sense from a climate change perspective, it seems doubly worthy if it extends supplies. Boosting efficiency and scaling up alternatives must also be a priority. And, recognizing that nations will turn to cheap coal (recently, 80% of growth in coal use has come from China), more work is needed to defang this fuel, which produces more carbon dioxide per ton than any other energy source.
Even if the peakists are wrong, we would still be better off taking these actions. And if they're right, major efforts right now may be the only way to avert a new Dark Age in an overheated world.
Hopefully, such wise words will be heard more and more.