Facing the End of the Oil Era

Monday Magazine | April 18, 2005
If there’s one bright spot in the whole worry about global warming, greenhouse gases and the impact of using oil for everything from powering cars and machinery to making agricultural fertilizers and plastic, it’s this: Chances are high that the world will run out of oil before we can do irreparable damage. And at the point when there’s no more oil, we’re going to have to hope that we haven’t done so much damage to this planet that we’ll find it impossible to sustain ourselves.

Oh, it sounds like far-fetched panic-mongering, the kind of survivalist-apocalyptic stuff of science fiction and environmental doomsaying. But in this case, much of the concern is actually being driven by those hard-nosed bean counters in the economic sector, who look at how much oil is needed, how much is being produced, and how much longer that level of production can meet the demand.

The news is not good.

In February, the International Monetary Fund predicted that by 2030, global demand for oil will be for nearly 139 million barrels of oil a day. That’s 25 years from now—but already you can see how that’s possible. The U.S. Energy Administration’s predictions for Summer 2005 suggest people will be using 9.3 million barrels a day—in the United States alone.

Picture a mile-high cube of shimmering, gooey oil. That’s how much one estimate says we use worldwide each year—actually a little more, at 1.07 cubic miles. But as of last year, the amount of oil still waiting deep in the ground to be pumped out and used was estimated at about 34 cubic miles. You figure it out. Even if we get our consumption down significantly, to just 1 cubic mile per year, the earth has only a little more than 30 years of oil supplies left.

And they say we’ll want more of it by then. But it won’t be there. According to one study by the UK-based Oil Depletion Analysis Centre, even with all the new oil drilling planned between now and 2010, we’ll only be getting an additional 12.5 million barrels of oil a day. That’s just a bit more than the U.S. uses each day right now. And it’s not just for cars, though transportation is the greatest user of oil. Oil is an ingredient in many plastics and in agricultural chemicals, and is essential for the machinery that manufactures practically everything.

So, it looks like we’re running out. It’s what economists and oil experts call Peak Oil, a term that refers to the midpoint of global oil production. As in, from here on in, it’s all downhill. It’s a term you’ll be hearing a lot more in the coming decades, although some say we’ve already passed the point of Peak Oil, and are into what writer James Howard Kunstler is calling “The Long Emergency” (also the title of his new book, released this week by Grove/Atlantic Press). Basically, it’s a question of how we’re going to be faced with a whole new way of thinking as we search—perhaps unsuccessfully—for a new source of energy to power our every developed-world need.

What will the world look like 10, or 50, years down the road? It’s the kind of question Julian Darley, the founder of the Post Carbon Institute, a Vancouver-based non-profit think tank, tries to imagine every day.

Darley doesn’t sugar-coat it—rather, he points out that we’re already well into an energy crisis. “Sometime during this year, it will likely become perfectly obvious that [oil producers] are not able to meet the demand.”

There’s really no substitute for oil, he adds. Not hydrogen, not wind power, certainly not coal or tar sands or heavy crude oil, all of which have been considered as possible answers. But none of those can provide the same kind of energy return as can lovely, gooey, sweet oil. Sure, you can make oil out of coal, says Darley, but “then we run into the same problem Hitler had—you can’t make it fast enough.”

So far we can pretend that the changes we’re seeing—the rising price of oil and manufacturing, in particular—are attributable to other factors. “But it’s a bit like tobacco and lung cancer. You can’t prove [there’s a connection], but few sane people doubt it.” There are other signs, too. Those high gas prices—we’ve passed the dollar-a-litre mark, and are unlikely to see it dip significantly lower again—are just one. Wildly fluctuating oil prices are, too. As big oil companies buy up mid-sized oil companies (as ChevronTexaco did last week when it bought Unocal for $16 billion US), it looks on paper like there is more oil in reserve. But, as Darley says, nothing has changed geologically—it’s just a different company owning more of what’s already there.

As oil prices rise, commodities will go up in price. There will be strain on natural gas, which is also reaching a peak in North America, and further strain on coal (which is worse for the environment, in case you didn’t remember).

”Europe is going to be the place to manage best in the industrialized world,” says Darley, pointing to the somewhat slower economy there. But North America is going to go from a fast-growing economy to a negative one. “It’s going to be very hard for people,” he predicts. Mobility will be tremendously affected. So will the cost of transport, virtually 100 percent of which is currently powered by oil-based resources. Our industrial agricultural system—growing food with chemical-based fertilizers and pesticides, harvesting, processing and packing it with machines, transporting it by trucks or jets—will start to change. “All industrial processes are getting ever more expensive,” he says. And our very psyches will be at risk as we see our society change within the span of a few years, or a few decades.

What will society look like a few years down the road? Toronto filmmaker Gregory Greene asks that question in the world’s only documentary on on the affect of Peak Oil on North America, The End of Suburbia. The film grew out of his assignment to cover the the annual conference of the Association for the Study of Peak Oil (ASPO) in Paris in May, 2003.

“What astonished me was that there was no debate on this going on anywhere in the mainstream world press,” Greene recalls about the conference. “Nothing from government. Just scientists and oil geologists—and a guy called Matt Simmons . . . the world’s biggest energy banker. Works with all the big oil boys down in Houston. Not only that, but he was a prominent Republican and advisor to Vice-President Dick Cheney’s now infamous 2001 Energy Task Force.”

(Simmons is the CEO of Simmons & Company International, which provides billions of dollars worth of investment banking services for the oil industry. If anyone should be worried about the future of oil, it’s him.)

With oil increasingly scarce, the impact will be widely felt, not just in the oil industry. “There will be inevitable blackouts, a natural gas crisis—we’re going to have to heat our houses in winter,” says Greene. “Governments will adapt, they’ll come up with legislation, and it’s probably going to be market-based . . . it screws the poor, and it screws the middle classes, too,” he adds, explaining that it will especially affect any at-risk population, including the middle classes who are living at the margins of what they can afford. Greene warns against going into debt to buy enormous houses, for example. In the future, he says, “no-one’s going to be buying 3,000- to 5,000-square-foot monster homes, because they won’t be able to heat them.”

As for the documentary, it discusses much of what will happen to the American Dream of ever-bigger, ever better. “The American Dream doesn’t allow self limitation, or any kind of limitation,” Greene says. “My main concern, and the biggest concern about Peak Oil, is the reactions of the porcine middle classes who complain about hamburgers being 29 seconds late.”

So what can we do? Clearly, things are changing already, and not for the better. “This crisis is happening now, not in 10 years. And there is still time to adapt your lifestyle to the coming reality of declining world oil,” says Greene.

Individually, it’s going to take little things, like riding your bicycle instead of driving, and reducing your vulnerability to rising prices, and big things, like changing social and governmental mindsets. The time to build infrastructure for alternative energy sources (like wind, solar and even nuclear power), is now, he adds. “If we can’t find the capital to build that in the best of economic times, how are we going to do that in the midst of a protracted economic and energy crisis?”

“It is not too late to reduce your consumption of energy, or at least begin the process of becoming conscious of it,” says Greene. “Part of this process will be to look at the community you live in, and begin to figure out where the different resources are. I mean by this human resources (who can fix your bike, teach mechanical and engineering skills, teach basic planting and urban agriculture, etc.) Get in touch with farmers from your region, go to the local farmer’s markets and get telephone numbers. For the more engineering-oriented, look around and see what industrial capacity remains in your region . . . how will it operate in an economic climate dictated by prohibitive energy prices, what else might be produced . . . You know, there is no limit to what people in their own communities can do. Also begin to get after some of your local politicians . . . global oil peak is not a left/right issue. It is not a conservative/progressive issue . . . It is recognition of the inevitable, and coming together to develop locally-based strategies to maintain economic vitality, infrastructure maintenance, and health. Also, get out of debt as fast as you can.”

Monday Magazine

Founded in 1975 to provide a critical voice in Victoria's political and cultural communities, Monday Magazine continues to shake British Columbia's conservative capital city with tell-it- like-it-is features and reviews. Targeting educated, active adults and Victoria's growing youth market, Monday...
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