Peak oil

The world passed the halfway point of oil supply in 2005. World demand for oil likely will severely outstrip supply in 2008, leading to increasingly higher oil prices. Consequences are likely to include increasing gasoline prices, rapidly increasing inflation, and subsequently a series of increasingly severe recessions followed by a worldwide economic depression. Consequences may include, particularly in industrialized countries such as the United States, massive unemployment, economic collapse, and chaos.

Published in: Bulletin of Science, Technology & Society, Volume 28, Issue 3, May 2008, Pages 187-191
Available from: http://dx.doi.org/10.1177/0270467608316098

Peak oil theory predicts that oil production will soon start a terminal decline. Most authors imply that no adequate alternate resource and technology will be available to replace oil as the backbone resource of industrial society. This article uses historical cases from countries that have gone through a similar experience as the best available analytical strategy to understand what will happen if the predictions of peak oil theorists are right. The author is not committed to a particular version of peak oil theory, but deems the issue important enough to explore how various parts of the world should be expected to react. From the historical record he is able to identify predatory militarism, totalitarian retrenchment, and socioeconomic adaptation as three possible trajectories.

Published in: Energy Policy, article in press
Available from: ScienceDirect

In the last few decades petroleum has been consumed at a much faster pace than new reserves have been discovered. The point at which global oil extraction will attain a peak ("peak oil") and begin a period of unavoidable decline is approaching. This eventuality will drive fundamental changes in the quantity and nature of energy flows through the human economic system, which probably will be accompanied by economic turmoil, political conflicts, and a high level of social tension. Besides being a geological and economic issue, peak oil is also a fundamental concern as it pertains to ecological systems and conservation because economics is a subsystem of the global ecosystem and changes in human energy-related behaviors can lead to a broad range of effects on natural ecosystems, ranging from overuse to abandonment. As it becomes more difficult to meet energy demands, environmental considerations may be easily superseded. Given the vital importance of ecosystems and ecosystem services in a postpetroleum era, it is crucially important to wisely manage our ecosystems during the transition period to an economy based on little or no use of fossil fuels. Good policies can be formulated through awareness and understanding gained from scenario-based assessments. Presently, most widely used global scenarios of environmental change do not incorporate resource limitation, including those of the Millennium Ecosystem Assessment and the Intergovernmental Panel on Climate Change. Considering the potential magnitude of the effects of peak oil on society and nature, the development of resource-constrained scenarios should be addressed immediately. Ecologists and conservation biologists are in an important position to analyze the situation and provide guidance, yet the topic is noticeably absent from ecological discussions. We urge politicians, corporate chief executives, thought leaders, and citizens to consider this problem seriously because it is likely to develop into one of the key environmental issues of the 21st century.

Published in: Conservation Biology, article in press
Available from: Interscience

Global energy markets are continuing to experience an increase in petroleum prices. From a relatively low $20 per barrel in 2002, prices reached as high as $78 per barrel in 2006. During this time, there has been increasing discussion of “Peak Oil”—the concept that global oil production is peaking and beginning an irrevocable decline.

Even among those who do not consider Peak Oil a near-term problem that merits concerted action, there is a growing consensus that prices are trending higher and that increasing proportions of the world’s conventional oil1 supply will be coming from nations that are members of the Organization of the Petroleum Exporting Countries (OPEC), especially those in the Middle East. The world is entering a period where growing global demand, OPEC dominance of oil production, and numerous geopolitical threats to supplies have combined to create great uncertainty about the future cost and security of oil.

Meanwhile, domestic natural gas production is lagging behind demand growth despite major demand destruction in certain U.S. industrial sectors. Major expansions of liquid natural gas imports, largely from OPEC countries, are being proposed to fill the supply gap. With these energy supply problems in mind, I review some predictions concerning both oil and natural gas production peaks and discuss how these peaks would impact industry.

Published in: Environmental Quality Management, Volume 17, Issue 1, October 2007, Pages 83 - 90
Available from: Wiley Interscience

The global trade in goods depends upon reliable, inexpensive transportation of freight along complex and long-distance supply chains. Global warming and peak oil undermine globalization by their effects on both transportation costs and the reliable movement of freight. Countering the current geographic pattern of comparative advantage with higher transportation costs, climate change and peak oil will thus result in peak globalization, after which the volume of exports will decline as measured by ton-miles of freight. Policies designed to mitigate climate change and peak oil are very unlikely to change this result due to their late implementation, contradictory effects and insufficient magnitude. The implication is that supply chains will become shorter for most products and that production of goods will be located closer to where they are consumed.

Published in: Ecological Economics, Volume 69, Issue 2, 15 December 2009, Pages 427-434
Available from: ScienceDirect

The issue of a peak in world oil supply has become a mainstream concern over the past several years. The petroleum geology models of post-peak oil production indicate supply declines from 1.5% to 6% per year. Travel requires fuel energy, but current transportation planning models do not include the impacts of constrained fuel supply on private travel demand. This research presents a method to assess the risk to activities due to a constrained fuel supply relative to projected unconstrained travel demand. The method assesses the probability of different levels of fuel supply over a given planning horizon, then calculates impact due to the energy supply not meeting the planning expectations. A new travel demand metric which characterizes trips as essential, necessary, and optional to wellbeing is used in the calculation. A case study explores four different urban forms developed from different future growth options for the urban development strategy of Christchurch, New Zealand to 2041. Probable fuel supply availability was calculated, and the risk to transport activities in the 2041 transport model was assessed. The results showed all the urban forms had significantly reduced trip numbers and lower energy mode distributions from the current planning projections, but the risk to activities differed among the planning options. Density is clearly one of the mitigating factors, but density alone does not provide a solution to reduced energy demand. The method clearly shows how risk to participation in activities is lower for an urban form which has a high degree of human powered and public transport access to multiple options between residential and commercial/industrial/service destinations. This analysis has led to new thinking about adaptation and reorganization of urban forms as a strategy for energy demand reduction rather than just densification.

Published in: Transportation Research Part A: Policy and Practice, article in Press
Available from: ScienceDirect

In recent years, several published reports have assured the public that all is well with the global petroleum supply, citing new oil-production technologies and a record-high oil-reserve figure. Oil production has exceeded demand since late 1997, driving oil prices downward. Global oil consumption, however, is continuing to increase while new oil discoveries decrease. Petroleum is a finite resource, and the production rate will peak and then permanently decline when approximately half of the producible resource has been consumed. The United States has already experienced this; petroleum production in the United States has been in decline since 1970 despite new production technologies and energetic exploration. At recent rates of increase in oil production, the peak in global petroleum production will arrive in about 2008. All is not well with the global petroleum supply, and our society must begin to prepare for the changes that a declining petroleum supply will bring.

Published in: Journal of Geoscience Education, Volume 48, Issue 2, March 2000, Pages 130-136
Available from: Snolab

M. King Hubbert’s 1956 prediction of a ‘peak’ in US oil production has spurred a durable and divisive debate on the exhaustion of the petroleum resource. Pitting physical against economic explanations of resource scarcity, the peak oil debate has seemingly sunk into the well-worn grooves of a long history of scarcity debates. Yet, as this paper argues, this ‘stale dichotomy’ can partly be attributed to a severance from the contexts and ideas that informed Hubbert’s mathematical calculations. Specifically, this paper examines the broader influences on the peak oil model: Hubbert’s career in the newly formed field of geophysics; his personal concern with the relationship between energy and population growth; and his ties to Technocracy, Inc., a social movement originating in the US that aimed to replace political and business control with a group of specialist engineers and technicians. The paper further emphasizes the importance of institutional and political interests to the arguments launched against Hubbert, and in motivating change in this opposition over time. Last, it makes the case that the contemporary de-contextualization of Hubbert’s model has contributed towards a narrow focus of discussions within the oil industry and in certain governments on predicting the timing of a global peak, without addressing the wider questions implied by Hubbert’s model.

Published in: Geoforum, article in press
Available from: ScienceDirect

"Peak oil" refers to the future decline in world Production of crude oil and to the accompanying potentially calamitous effects. The majority of the literature on peak oil is non-economic and ignores price effects even when analyzing policies. Unfortunately, most economic models of depletable resources do not generate production peaks. I present four models which generate production peaks in equilibrium. Production increases in the models are driven by: demand increases, cost reductions through advancing technology, cost reductions through reserve additions, and production capacity increases through site development. Production decreases are driven by scarcity. The models do not rely on market failures and indicate that a peak in production may arise from efficient intertemporal optimization. The models show that prices are a better indicator of impending scarcity than peaking is and that peak production can occur when any percentage from 0-100% of the original deposit remains.

Published in: Energy Journal, Volume 29, Issue 2, 2008, Pages 61-79
Available from: The Energy Journal

The well known "Hubbert curve" assumes that the production curve of a crude oil in a free market economy is "bell shaped" and symmetric. The model was first applied in the 1950s as a way of forecasting the production of crude oil in the US lower 48 states. Today, variants of the model are often used for describing the worldwide production of crude oil, which is supposed to reach a global production peak ("peak oil") and to decline afterwards. The model has also been shown to be generally valid for mineral resources other than crude oil and also for slowly renewable biological resources such as whales. Despite its widespread use, Hubbert's modelis sometimes criticized for being arbitrary and its underlying assumptions are rarely examined. In the present work, we use a simple model to generate the bell shaped curve curve using the smallest possible number of assumptions, taking also into account the "Energy Return to Energy Invested" (EROI or EROEI) parameter. We show that this model can reproduce several historical cases, even for resources other than crude oil, and provide a useful tool for understanding the general mechanisms of resource exploitation and the future of energy production in the world's economy.

Published in: Energies, Volume 2, Issue 3, September 2009, Pages 646-661
Available from: Energies