A Rock and a Hard Place: Peak Oil and Climate Change
Article published: Wednesday, January 23rd 2008
Dan Welch explains peak oil theory, what it means for our society and the climate.
Not so long ago, climate change was a term used only by scientists and environmentalists; today its an everyday phrase – the stuff of adverts and primary school lessons. Now another phrase, peak oil , once rarely used except by a small band of ex-oil industry mavericks, is going mainstream.
The concept of peak oil is not that oil is running out, but that the world will reach a peak of maximum production. After this point, regardless of market price, improved technologies or further discoveries, production will decline.
Region, after oil producing region, has shown the same bell shaped curve a peak of discoveries, a peak of production and then a remorseless decline.
In the US, where discoveries grew until the late 1930s, oil production increased steadily until 1970 and has fallen ever since. World-wide discoveries of oil fields peaked in the 1960s and have subsequently declined. Similarly, having peaked in 1999, the North Sea saw a decline in production of 9% last year. At that rate the wells will be dry in less than eight years. In 2006 Kuwait stunned the oil industry, and the world, when it announced that the Burgan oil field the second largest in the world had reached peak output.
A growing number of specialists have concluded that the world is at, or near to, peak production. According to the German-based Energy Watch Group, we passed the peak in 2006. On 3rd January the price of oil broke through the $100-a-barrel barrier for the first time.
But with fossil fuel driven climate change threatening the planet, shouldnt we be welcoming the decline of the oil era? The question is – how will the oil corporations respond to the peak? Will they move Beyond Petroleum, as BPs clever branding has it, and put their vast resources to the development of renewable energy? Last year, peak oil campaigner David Strahan asked the CEO of Shell whether the company had done any detailed modelling on peak oil. The CEO replied that peak oil was not relevant, due to the massive reserves of unconventional oil and coal.
As the oil price rockets, more expensive production processes become profitable. Unconventional oil is synthetic oil manufactured from tar and literally, tarry sand. It is chiefly produced by strip- mining the Canadian wilderness. Unconventional oil produces vastly more greenhouse gases than conventional oil production.
Greenpeace has called the exploitation of the tar sands the greatest climate crime in history. By 2012 the Canadian operations will produce 100m tonnes of greenhouse gases annually, and 56,000 square miles of forest described as the greatest carbon sink in the world will be destroyed.
And coal? Through a process called liquefaction, synthetic oil can be produced from coal. Again coal liquefaction produces far more greenhouse gases than conventional oil production.
Why import oil from unstable parts of the world when you can cook up your own diesel at home? This option is particularly attractive to the US, which has huge coal reserves. In March 2006 the Pentagon announced the Assured Fuels Initiative a programme to develop coal liquefaction to power the US war machine.
The invasion of Iraq could be and often is viewed as an Anglo-American response to the looming crisis. Back in 1999, Dick Cheney noted in a speech to the London Institute of Petroleum that oil demand was set to grow by 2% annually while reserves were set to decline by 3% annually. He went on: That means by 2010 we will need an additional 50 million barrels a day. So where is the oil going to come from? The extra 50 million barrels could only come from the Middle East, but with UN sanctions crippling Iraqi oil production that was not possible while Saddam was in place.
Yet far from any increase in Iraqi oil production, the invasion has seen production plummet in the face of insurgent attacks and mounting regional tensions. Not only that, but the US occupation uses 3.5 million gallons of oil a day greater than the total oil usage of Bangladesh, with 150 million people.
At this rate the resource wars of the future will be fought just to run the machines that fight them. And that is where the Pentagons coal-to-oil plans come in – as – a strategy to fuel the military-industrial complex in the face of rapidly declining oil supplies. The Middle East has about 685 billion barrels of oil. According to the Pentagon there is enough coal in the US to produce 964 billion barrels of fuel. Peak oil does not deliver us from fossil fuel.
Jeremy Leggett has argued that amid the ruins of the old energy modus operandi many will try to turn to coal, and so the extent to which renewable energy grows explosively instead of coal expansion “will determine whether economies and ecosystems can survive the global warming threat.”
The struggle between these two approaches will define the era of peak oil.
More: Manchester
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