Peak Oil Primer

Oil is the world's premier source of energy and is fundamental to almost every important function of modern life. It fuels 95 percent of land, sea and air transport, so the efficient movement of raw materials and goods, as well as personal mobility, is almost entirely oil-dependent. Food production too relies heavily on oil to run farm machinery and to make fertilisers, herbicides and pesticides. Oil generates 40 percent of the world's commercial energy, provides heating fuel, and drives industry and commerce. No other existing energy source can match the versatility, convenience and low cost of oil. Moreover, it supplies feedstock for many thousands of manufactured products as diverse as plastics, medicines, clothing and building materials.

Global demand for oil has increased seven-fold over the past half-century due to rapid population growth and industrial expansion. The world now consumes about 82 million barrels of oil a day. (A barrel is the equivalent of 42 U.S. gallons or 159 litres.) Demand is generally expected to continue growing at an average annual rate of one to two percent. The International Energy Agency forecasts that worldwide oil demand could exceed 100 million barrels a day by 2020. The greatest rise in demand is expected to come from developing nations. Growing transportation needs throughout the world would account for up to three-quarters of the projected increase.

Oil industry leaders acknowledge that new sources of oil are becoming increasingly difficult to find and more costly to exploit. New oilfield discoveries have been declining steadily for 40 years despite extensive exploration with the most advanced technology, and most importantly, finding giant new fields is becoming ever more rare. Recently, major oil companies have had to cut their production growth targets. In 2002, the world used four times more oil than was found from new sources. Since about 80 percent of the oil that will be necessary to meet projected needs in 10 years time is not currently in production, unprecedented levels of investment and yet-to-be-achieved technological advances will be required to balance supply with future demand.

The industry's ability to locate and recover ever-smaller volumes of oil has improved significantly but the physical limitations of the resource are inescapable. Operating experience from tens of thousands of oilfields shows that the rate of production always rises to a peak and then begins to fall off when about half the recoverable oil has been extracted. Since the world's total endowment of oil is finite and non-renewable, in due course, as new discoveries become insufficient to offset the natural depletion of existing reserves, overall output will reach its maximum limit and begin to decline.

The world has now consumed almost half the total amount of conventional oil most experts estimate will ever be available for recovery. Assessments of the world's ultimately recoverable oil reserves vary but 65 published studies by oil companies, geologists, government analysts and consultants over the past 50 years have produced remarkably consistent estimates. The overwhelming majority of these put the world's original endowment of recoverable oil at no more than about 2,400 billion barrels; the average estimate is 2,000 billion barrels. Cumulative worldwide consumption had exceeded 900 billion barrels by the end of 2003.

A growing number of experts now foresee a permanent downturn in global oil production rates within a matter of years. Although past premature forecasts have led many to view warnings of impending oil scarcity with a great deal of scepticism, no fewer than a dozen recent independent analyses, using different assumptions and demand growth projections, all show global production reaching its natural peak within the coming decade. Even the most conservative of these, based on what some consider an implausibly high estimate of the total oil endowment, forecasts the peak by 2020.

As growing demand exceeds available supplies, oil prices will rise substantially and the effects will be felt throughout the global economy. Oil is the world's single largest traded commodity, accounting for over half the total value of all commodity transactions. Fears of oil supply disruptions alone can create financial panic. The few episodes of dramatic oil price rises in the past 30 years, due mainly to events in the Middle East, have shown how vulnerable the world economy is to the impact of supply restrictions. High oil prices fuel inflation, contribute to economic recessions and create the greatest hardship for those least able to bear the additional costs.

The world will become increasingly dependent on oil from the Middle East as supplies from elsewhere decline. Already over 50 oil-producing countries have passed their peak production, including the United States, once the world's largest producer, which now relies on imported oil for over 60 percent of its domestic needs. Most other producing nations are expected to reach their peak within the next few years. The only exceptions will be a handful of oil-rich Persian Gulf states, which hold about two-thirds of the world's proven reserves. Saudi Arabia alone controls 25 percent of those reserves.

The productive capacity of Middle East oilfields is uncertain and the risks of supply disruptions are heightened by continuing political instability in the region. Oil from the Middle East currently accounts for almost a third of the world's supply and that share will grow steadily in the years ahead. While it is commonly assumed that some excess production capacity is available to meet short-term increases in demand, little is known about the longer-term potential for growth. In any case, intensified worldwide competition will inevitably accelerate the depletion of those reserves and the onset of falling output. Moreover, securing reliable supplies from the region comes at a substantial additional expense. Some estimates put the military costs of protecting pipelines and tanker routes, borne mainly by U.S. taxpayers, at around $15-20 a barrel.

The era of cheap, plentiful supplies of oil is coming to an end, requiring fundamental restructuring of the world's energy systems. Any shift towards new, more costly alternatives is bound to be difficult and time consuming. Growing recognition of the serious environmental damage and climate-changing effects caused by burning oil (and other fossil fuels) is beginning slowly to drive new, long-term energy policies. The approaching peak and decline in oil supplies adds urgency to the need for greater energy efficiency measures and more rapid development of sustainable energy alternatives.

Presentations links & videos available on the internet

A Crude Awakening - Promotional video, 02:06 long.
Available on DVD from retailers.

Asleep in America - Promotional video, 07:08 long.
ASPO Sweden info on the film. Full film does not seem to be available to buy yet.

Crude Impact - is a new Peak Oil video, see the Crude Impact website. The DVD cover quotes Chris Vernon of The Oil Drum: Europe: "Crude Impact is a terrific film. I have no hesitation in saying it is the best documentary I have seen on the subject".

Dr. Albert Bartlett: Arithmetic, Population and Energy - In this almost hour-long lecture available as audio/video, Dr. Bartlett explains why it is that by not taking growth into consideration, many people underestimate how quickly our natural resources are used up, and populations grow. The pace of the presentation is fairly fast. So the two basic points you need to know are: First, doubling time is 70 / rate-of-growth. For example, if oil use grew at 7.0% per year [it doesn't, just suppose], we would double our use in 70 / 7.0 years, ie. 10 years. Second, assuming growth is constant, each consecutive doubling time uses more resources than all previous doubling times added together.

For example, if doubling time is 10 years, the period 1990 - 2000 will have used more of a specific resource than all of previous history added together. And the next ten years will again use more than all of previous history added together. Dr. Bartlett discusses the implications at length, with plenty of examples including oil depletion. Website.

End of Oil: The Peak Oil Debate - Very interesting, short (3min 36 sec) video from Link TV on YouTube. An interview with the makers of Crude Impact. James Wood, Director of Crude Impact, does an excellent job of answering some of the main anti-Peak Oil arguments e.g. Peak has been predicted many times before, wrongly, and there is plenty of oil in the Canadian tar sands.

Leave Oil Before it Leave Us - Interview with Dr. Fatih Birol of the International Energy Agency in April 2008. Translated from the original German.

Oil, Smoke and Mirrors' - is an independent 50 minute documentary on Peak Oil, 9/11 and the 'war on terror' based on a series of interviews with various Peak Oil analysts and others, including: Colin Campbell, founder of ASPO; Michael Meacher, UK MP; Paul Roberts, author of The End of Oil; Richard Heinberg, author of The Party's Over and Powerdown; Chris Saunders, political economist. As the video states at the beginning, not all interviewees would agree with all views on the video. Most of the Peak Oil speakers are absent from the latter part of the film. Do not watch if you do not want to hear alternative points of view on the ghastly-named war on terror. Video.

Oil Supply Shock - YouTube video (7m 33s) with CNBC interviewing Matt Simmons and John Kilduff, who discuss Peak Oil and the US Government Accountability Office (GAO) report, CRUDE OIL - Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production, issued on 29 March 2007 that warned peak could occur any time between now and 2040 and that the US government was totally unprepared. Video.

Peak Oil - The Emerging Reality - Chris Skrebowski, ODAC Board Trustee and editor of Petroleum Review, went on a 'Peak Oil tour' of Australia Aug/Sept 2006. This is his PowerPoint presentation (PDF, 1.38 Mb). "I aim to show you that: ‘Peak Oil’ is real and imminent; That time is short; That adaptation will not be easy."

Peak Oil and Transition Towns from Kinsale to Totnes and Beyond? - On 3rd April 2007, Rob Hopkins, Transition Town Totnes, gave a PowerPoint presentation at an event organised by the West Wales Soil Association at Lampeter called Preparing West Wales for a Future Without Oil. Rob's presentation covers Peak Oil, natural gas depletion and solutions, 76 slides long. If you are thinking of starting a Transition Town/district, or looking for ideas, this is a good place to start. Presentation (PDF, 1.94 Mb).

Peak Oil program on Australian TV - The Australian Broadcasting Company program Four Corners covered Peak Oil in July 2006. The full program is now available via Broadband: "Reporter Jonathan Holmes goes in search of an answer in the Middle East, the US and Europe, interviewing the key protagonists. He asks if the world is being told the truth about the vast unexploited reserves that are claimed to lie beneath the desert sands of the Middle East. He looks at alternative oil sources and the obstacles to exploiting them. And he explains what peak oil means for Australians who depend so heavily on oil for transport and tourist income." Four Corners website.

Peaking Of World Oil production, An Overview - PowerPoint presentation (PDF, 735 Kb) from Robert L. Hirsch, October 2006.

Real Oil Crisis - Another video from Australia specifically on Peak Oil. The interviewees such as Jeremy Leggett see Peak as occurring 2010 at the latest. 13 minutes long. Video website.

Resource Depletion: Modeling and forecasting oil production - Michael Smith of EnergyFiles speaks regularly on Peak Oil / oil depletion. He gave an interesting PowerPoint presentation in April this year, Resource Depletion: Modeling and forecasting oil production (PDF 883 Kb), covering the modelling of oil depletion in general, and Egypt, the UK, and USA specifically, and lists all countries that are past Peak. Judging from the relevant graphs, Peak year is shortly after 2010. Michael's modelling suggests the last year in which oil supply can match demand is 2006-2018, depending on rate of demand growth. Some of Michael's conclusions: "Energy efficiency is not enough as demand grows faster than savings are made. Conservation is a necessity ...but it will be painful."

Richard Heinberg Video - Richard Heinberg begins his talk with a history of energy use, then moves on to various aspects of Peak Oil. Looks at the Katrina hurricane aftermath as an example of how well prepared the USA is for Peak Oil (not very). Finishes off his talk on an optimistic note, discussing some of the many options we have for coping and preparing for Peak Oil. An all-round excellent talk. About 56 minutes long. Video.

Saudi Arabia’s Strategic Energy Initiative: Safeguarding Against Supply Disruptions - A PowerPoint presentation (17 slides) from the Center for Strategic and International Studies (CSIS), Nov 9th 2006, on future Saudi oil production. The presentation is packed full of useful statistics, although it is an official viewpoint so rosy future production scenarios should be treated with care. Interestingly, Saudi Arabia is sceptical any other OPEC producer can significantly increase its oil production. PowerPoint presentation (PDF, 545 Kb).

The End of Suburbia (free, 52-minute version) - This was removed from YouTube April 2007. The End of Suburbia promo trailer - The End of Suburbia is probably the best known Peak Oil documentary. View Trailer (02:46). A DVD of The End of Suburbia is available for sale.

The Oil Factor - There is a book called 'The Oil Factor', but this is the US documentary. A synopsis is available on the film website: "After assessing today's dwindling oil reserves and skyrocketing use of oil for fuels, plastics and chemicals, The Oil Factor questions the motives for the U.S. wars in the Middle-East and Central Asia where 3/4 of the world's oil and natural gas is located."

The Real Oil Crisis - The Australian Broadcasting Company covers Peak Oil. A brief (13 mins) introduction, includes interviews with various peak oilers, including Jeremy Leggett and the Managing Diretor of ARC Energy. Real Oil Crisis.

Two Videos on Peak Oil - Michael Klare and Panel Discussion with Richard Heinberg E&E TV have recently recorded two programs on Peak Oil: Oil: Peak oil proponents talk about difficulty in changing U.S. energy policy (May 2006). "Princeton's Kenneth Deffeyes, author Richard Heinberg, Rep. Roscoe Bartlett (R-Md.) and others discuss peak oil and national security." Chaired by Heinberg. Oil: Author Michael Klare discusses relationship between peak oil and national security (May 2006). "Michael Klare, a professor at Hampshire College, talks about the geopolitical aftermath of oil exploration."

Understanding Peak Oil - Drivers of change e-card series by ARUP. This description of peak oil and why it matters was created by ARUP and sent out to their clients and contacts in March 2008. It has a 'send to a friend' feature which allows you to pass it on.

Top ^ Last updated: 02-May-2008