Peak oil

Back in the 1950’s Hubbert predicted that American oil production would peak in 1970, and then begin a long journey of decline. How did he do it? He added up all the discovered oil, estimated the declining discovery trends against the increasing production trends, and then mapped it out. Peak light sweet crude occurred in America right on schedule: 1970. But now the debate is on about when world oil production will peak and head into permanent decline.


But this debate is almost irrelevant, as from a climate point of view we should not even be burning all the remaining oil! (Let alone the coal and gas!) But, just to highlight the risks of peak oil, I’ll leave you with the conclusions of the Australian Senate special committee into peak oil (Feb 2007).

1. While the Senate somehow remained agnostic about a definitive date, we should be planning for it now.

3.137 The committee cannot take sides with any particular suggested date for peak oil. However in the committee’s view the possibility of a peak of conventional oil production before 2030 should be a matter of concern. Exactly when it occurs (which is very uncertain) is not the important point. In view of the enormous changes that will be needed to move to a less oil dependent future, Australia should be planning for it now.

3.138 Most of the official publications mentioned in this report seem to regard the ‘long term’ as extending to 2030, and are silent about the future after that. The committee regards this as inadequate. Longer term planning is needed. Even the prospect of peak oil in the period 2030-2050 – well within the lifespan of today’s children – should be a concern. Hirsch suggests that mitigation measures to reduce oil dependence ‘will require an intense effort over decades…’

This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities… Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.[114]

2. Markets will not prepare in time

Committee comment

4.64 The committee notes concerns that markets will not respond in time to provide a smooth transition to a post peak oil world without government action. Given the uncertainty about much of the information on world oil supplies and the geopolitical instability of some key oil bearing regions, it is possible that there may be a risk that markets will under invest in oil and energy technologies, resulting in economic and social hardship when supply of conventional oil falls below demand.

4.65 The information required to make a clear determination on whether peak oil will occur before the market can provide mitigating action is not available. The following chapters discuss possible mitigation actions. These offer options for a prudent approach to managing the possibility of peak oil and associated issues contributing to oil vulnerability, resulting in substantially higher oil prices and a constraint on liquid fuel availability.

3. There is no “silver bullet”

In an extensive study of all of the alternative liquid fuels, none appeared likely to replace oil in the foreseeable future. Some might replace niche markets for a while, such as LPG or coal-seam gas for heavy machinery and trucking, but there was no one silver bullet.

4. If peak oil is imminent, the effect on the world economy is going to be profound

4.4 A recent report for the US Department of Energy, the Hirsch report, considered the impact of three different scenarios on the world and American economies. One assumed that no mitigating action was initiated until peaking, the second assumed that action is initiated 10 years before peaking and scenario three assumed that action is initiated 20 years before peaking. The severity of the impact of peak oil on the world economies was different for each of the three scenarios.

4.5 The Hirsch report claims that only aggressive supply and demand side mitigation initiatives will allay the potential for peaking to result in dramatically higher oil prices, which will cause protracted economic hardship in the world. ASPO-Australia also claims that the economic and social impacts will be very serious unless we take the necessary precautions very soon. The potential seriousness of the problem is also accepted by some political leaders, the W.A. Minister for Planning and Infrastructure, the Hon. Alannah MacTiernan MLA commenting that:

It is also certain that the cost of preparing too early is nowhere near the cost of not being ready on time.[2]

5. We need energy efficient cities not energy efficient cars — and this is going to be difficult!

General comment on demand management measures

8.96 When government considers the range of policies needed to reduce oil dependence, and the level of government intervention or support that they deserve, the costs and benefits of demand side measures versus supply side measures should be compared. A litre of oil saved through a fuel efficiency measure, or by turning a car trip into a bicycle trip, is just as real as a litre of oil found by new exploration or produced in a coal to liquids plant.

8.97 It should be remembered that measures to reduce demand for oil-fuelled transport also have other benefits – reducing greenhouse gas emissions; promoting the environmental and social benefits of less car-dependent cities – which the alternative fuels do not have, or have to a lesser degree. In the cost/benefit comparison these extra benefits should count to the credit of the demand management measures.

And earlier…


8.48 Studies suggest that overall the potential fuel saved from promoting walking, cycling and public transport, with realistic assumptions about how much behavioural change could be achieved, is relatively small compared with the saving from improving the fuel efficiency of vehicles.[50] However more walking, cycling and public transport use is still a worthwhile goal for a number of reasons – for example to reduce congestion and pollution; to promote healthy lifestyles; and to reduce the disabilities suffered by people without cars (since more public transport use would make better services more viable). This applies regardless of predictions about the oil future. If there is a long term rise in the price of oil, it will be all the more necessary.

8.49 It is often said that it is too hard to get Australians out of their cars.[51] Others argue that the real problem is that people have no choice:

There is no real relationship between wealth and car use. People use cars because they have to. Car dependence has become a dominant phenomenon. There is a lot of nonsense about how you will never get people out of their cars. You will not get them out of their cars unless you give them a better option, and then they will.[52]

8.50 The committee agrees that, whatever the reasons for people’s travel behaviour, changing it is a challenging goal. However this does not mean it should not be attempted. It a clearly a long term project. Change may be slow, but the important thing is to set the trend to reduce car-dependence into the long term.


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