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Doom is all around. Or so you might think if you read the British newspapers. Last month George Monbiot, a columnist in The Guardian, argued that Every generation has its taboo, and ours is this: that the resource upon which our lives have been built is running out. We dont talk about it because we cannot imagine it.
And Michael Meacher, Britains former environment minister, advised readers of his 5 January article in the Financial Times to plan now for a world without oil, with the crunch coming sometime between 2010 and 2015 (the article available without subscription here).
Are they right? Well, up to a point or, more precisely, up to a peak. What is sure is that they reflect a view known as neohubbertarianism. The word sounds like a noise my stomach makes when its empty, but actually describes a doctrine whose core belief is that oil discoveries have peaked (or will peak very soon), and that therefore the world is entering a phase of steeply declining availability and sharply rising prices. (The name comes from Marion King Hubbert, an American geologist who predicted in the 1950s that US domestic production in the lower 48 states would peak around 1970). The leading neohubbertarian (excuse me!) is probably Kenneth Deffeyes, who wrote in his 2001 book The View From Hubberts Peak that global oil production would peak in 2004 (for more information see the websites here and here).
A short, reasonably clear-headed introduction to the arguments for assessing such propositions appeared in The Economist back in November 2001 (Sunset for the Oil Business?): Nobody seriously disputes the notion that oil will run out someday, be that years or decades away, the newspaper opined; the harder question is determining when precisely oil will begin to get scarce.
In contrast to Deffeyes and other pessimists, it pointed out that the International Energy Agency foresees enough oil being available comfortably to meet growing demand until 2020. A top manager at Exxon insists the world will be awash with oil for another 70 years.
Either way, its worth looking at history of oil forecasting variously described as pitiful and dismal. Nearly all predictions for the year 2000 made after the 1970s oil shocks, for example, were far too pessimistic. The United States department of energy thought oil would reach $150 a barrel (even more than Osama bin Laden is demanding today) and even Exxon predicted a price of $100. The actual price this year, if OPEC is able to maintain its target range of $22 to $28, is likely to average $25.
Whether pessimists or optimists are right about how much oil is recoverable depends in part on technical innovation. Some techno-optimists say a revolution in oil recovery has only just begun. Average recovery rates (how much of a known reservoir can actually be brought to the surface) are still only around 30-35%, and new techniques, they think, could lift that to 50-60% within a decade. And anyway, the techno-optimists say, total accessible reserves may exceed 3 or even 4 trillion rather than 2 trillion barrels. (The most conservative figure, quoted in New Scientist in August 2003, estimated that some 900 billion have already been burnt, leaving 1.1 trillion barrels, or enough for 40 years at current consumption of about 25 billion barrels per year).
Some optimists also buoy their argument by referring to the bet that economist Julian Simon made with biologist Paul Ehrlich back in the 1970s, which demonstrated that in those circumstances at least innovation increases supply.
The truth: rarely pure, never simple
If you want to get to grips with some of the major issues here without having to make too much effort, Globolog recommends Hydrocarbons and the evolution of human culture, an analysis first published in Nature on 20 November 2003. This is both open to the merits of soundly-based argument and (despite its daunting title) easily digestible.
The authors, US-based scientists, are concerned that too many important decision-makers rely on the market to resolve the issue. They also think that government programmes are too inefficient to resolve possible impending energy problems. They view the combination of both as a recipe for disaster. Their main recommendation is:
These critical issues could be and should be the province of open scientific analysis in visible meetings Analysis should be informed by the peer-review process, statistical analysis, hypothesis-generating and testing rather than by the experts one chooses. Darker clouds just around the corner
We dont know when the oil is going to run out. We can be sure that there are big challenges in the near term that are likely to be much harder. Here are three:
- Meeting the challenge of climate change, as outlined in Globolog last year. On 8 January 2004 this was named by the chief scientific advisor to the British government, David King, as a greater threat to the world than international terrorism. A coherent response to climate change is some way off, not least for lack of US and Russian input. Serious investment in, first, energy efficiency and second, new technologies may help. The European Commissions five-year, $2 billion package to bring hydrogen technologies such as fuel cells closer to commercial viability may yield some results, and a US government pledge of $1.7bn toward fuel cell cars may not prove altogether wasted although it is clearly misplaced as a priority. Energy to make hydrogen is likely to come from coal and nuclear power so hydrogen technologies may create almost as many problems as they solve.
- Using oil more responsibly. This challenge may seem to contradict the last. Why would you want to use oil at all if you want to avoid climate change? Part of the answer is that without oil sales, poverty in already volatile regions would increase. The trouble is, getting it right is even harder. Take Iraq. As John Cassidy points out in his article Beneath the Sand (available in New Yorker archive of articles about Iraq), oil revenues alone cannot transform Iraq into a wealthy country. By 2020 there will be about 30 million Iraqis for whom six million barrels a day an optimistic estimate would yield $55bn a year in revenues $5 dollars per person per day enough to place Iraq above the World Banks global poverty line of $2 per day but not very much; and basing a developing economy on oil has a rotten track record. Nevertheless it would be harder to do worse with the money than in the past. After a short period of prosperity in the late 1970s, oil revenues were used by a dictator who slaughtered hundreds of thousands in brutal wars, bankrupted his country and frittered away $10 billion or more on an aborted nuclear weapons programme. Will the US, UK/Dutch and, perhaps, Israeli companies that are replacing their French, Russian and Chinese counterparts use the oil more wisely in what Michael Meacher correctly describes as the US administration's integrated oil/military strategy (with a trip to Mars, whoopee, thrown in)?
- Avoiding nuclear war. The challenge here may prove to be not so much the larger states (China and even India, for example could lead the way in solutions across and number of fields) as the smaller and non-state actors. It couldnt hurt to listen more carefully to the recommendations of Mohammed El Baradei of the International Atomic Energy Authority, while the US clearly needs to revisit its strategy, whether or not it follows recommendations made by Graham Allison, Director of the Belfer Center at Harvard University, in the new edition of Foreign Policy. Prof. Allison says that mounting a serious campaign to prevent nuclear terrorism is more challenging now than it would have been before the most recent Iraq war.
Please write to Globolog if you can think of three bigger challenges or you think these are wrong.
Globolog has recently been reminded that hope and inspiration are valid outcomes. So, heres a final thought from Andrei Sakharov, one of the moral giants of the last century:
Other civilisations, including more successful ones, may exist an infinite number of times on the pages of the book of the universe. Yet we should not minimise our sacred endeavours in this world, where, like faint glimmers in the dark, we have emerged for the moment from nothingness into material existence. We must make good the demands of reason and create a life worthy of ourselves and of the goals we only dimly perceive.