The Bottom Of The Barrel

The oil industry is buzzing. On Thursday, the government approved the development of the biggest depositdiscovered in British territory for at least 10 years. Everywhere we are told that this is a "huge"find, which dispels the idea that North Sea oil is in terminal decline. You begin to recognize how serious thehuman predicament has become when you discover that this "huge" new field will supply the world withoil for five and a quarter days.[1]

Every generation has its taboo, and ours is this: that the resource upon which our lives have been built isrunning out. We don't talk about it because we cannot imagine it. This is a civilisation in denial.

Oil itself won't disappear, but extracting what remains is becoming ever more difficult and expensive. Thediscovery of new reserves peaked in the 1960s. [2] Every year, we use four times as much oil as we find.[3] All thebig strikes appear to have been made long ago: the 400 million barrels in the new North Sea field would havebeen considered piffling in the 1970s. Our future supplies depend on the discovery of small new deposits andthe better exploitation of big old ones. No one with expertise in the field is in any doubt that the globalproduction of oil will peak before long.

The only question is how long. The most optimistic projections are the ones produced by the US Departmentof Energy, which claims that this will not take place until 2037.[4] But the US energy information agency hasadmitted that the government's figures have been fudged: it has based its projections for oil supply on theprojections for oil demand, [5] perhaps in order not to sow panic in the financial markets. Other analysts areless sanguine. The petroleum geologist Colin Campbell calculates that global extraction will peak before 2010.[6] In August the geophysicist Kenneth Deffeyes told New Scientist that he was "99 per centconfident" that the date of maximum global production will be 2004.[7] Even if the optimists are correct,we will be scraping the oil barrel within the lifetimes of most of those who are middle-aged today.

The supply of oil will decline, but global demand will not. Today we will burn 76 million barrels; [8] by 2020we will be using 112 million barrels a day, after which projected demand accelarates.[9] If supply declines anddemand grows, we soon encounter something with which the people of the advanced industrial economies areunfamiliar: shortage. The price of oil will go through the roof.

As the price rises, the sectors which are now almost wholly dependent on crude oil - principally transportand farming - will be forced to contract. Given that climate change caused by burning oil is cooking theplanet, this might appear to be a good thing. The problem is that our lives have become hard-wired to the oileconomy. Our sprawling suburbs are impossible to service without cars. High oil prices mean high food prices:much of the world's growing population will go hungry. These problems will be exacerbated by the directconnection between the price of oil and the rate of unemployment.[10] The last five recessions in the US wereall preceded by a rise in the oil price.[11]

Oil, of course, is not the only fuel on which vehicles can run. There are plenty of possible substitutes,but none of them is likely to be anywhere near as cheap as crude is today. Petroleum can be extracted from tarsands and oil shale, but in most cases the process uses almost as much energy as it liberates, while creatinggreat mountains and lakes of toxic waste. Natural gas is a better option, but switching from oil to gaspropulsion would require a vast and staggeringly expensive new fuel infrastructure. Gas, of course, is subjectto the same constraints as oil: at current rates of use, the world has about 50 years' supply, [12] but if gaswere to take the place of oil its life would be much shorter.

Vehicles could be run from fuel cells powered by hydrogen, which is produced by the electrolysis of water.But the electricity which produces the hydrogen has to come from somewhere. To fill all the cars in the USwould require four times the current capacity of the national grid.[13] Coal burning is filthy, nuclear energyis expensive and lethal. Running the world's cars from wind or solar power would require a greater investmentthan any civilisation has ever made before. New studies suggest that leaking hydrogen could damage the ozonelayer and exacerbate global warming.[14]

Turning crops into diesel or methanol is just about viable in terms of recoverable energy, but it meansusing the land on which food is now grown for fuel. My rough calculations suggest that running the UnitedKingdom's cars on rapeseed oil would require an area of arable fields the size of England. [15]

There is one possible solution which no one writing about the impending oil crisis seems to have noticed: atechnique with which the British and Australian governments are currently experimenting, called undergroundcoal gasification. [16] This is a fancy term for setting light to coal seams which are too deep or too expensiveto mine, and catching the gas which emerges. It's a hideous prospect, as it means that several trillion tonnesof carbon which was otherwise impossible to exploit becomes available, with the likely result that globalwarming will eliminate life on earth.

We seem, in other words, to be in trouble. Either we lay hands on every available source of fossil fuel, inwhich case we fry the planet and civilisation collapses, or we run out, and civilisation collapses.

The only rational response to both the impending end of the Oil Age and the menace of global warming is toredesign our cities, our farming and our lives. But this cannot happen without massive political pressure, andour problem is that no one ever rioted for austerity. People take to the streets because they want to consumemore, not less. Given a choice between a new set of matching tableware and the survival of humanity, I suspectthat most people would choose the tableware.

In view of all this, the notion that the war with Iraq had nothing to do with oil is simply preposterous.The US attacked Iraq (which appears to have had no weapons of mass destruction and was not threatening othernations), rather than North Korea (which is actively developing a nuclear weapons programme and boasting ofits intentions to blow everyone else to kingdom come) because Iraq had something it wanted. In one respectalone, Bush and Blair have been making plans for the day when oil production peaks, by seeking to secure thereserves of other nations.

I refuse to believe that there is not a better means of averting disaster than this. I refuse to believethat human beings are collectively incapable of making rational decisions. But I am beginning to wonder whatthe basis of my belief might be.

References: 

1. The Buzzard field is believed to contain 400 million barrels of recoverable oil. The USEnergy Information Administration estimates global daily oil demand at 76 million barrels (see below).

2. Richard Heinberg, 2003. The Party's Over: Oil, War and the Fate of Industrial Societies, p.36. NewSociety Publishers, Canada.

3. Bob Holmes and Nicola Jones, 2nd August 2003. Brace yourself for the end of cheap oil. New Scientist,vol 179, issue 2406.

4. ibid.

5. US EIA, 1998. Annual Energy Outlook, cited in Richard Heinberg, ibid, p.115. The extract reads asfollows: "these adjustments to the USGS and MMR estimates are based on non-technical considerations thatsupport domestic supply growth to the levels necessary to meet projected demand levels".

6. Colin J. Campbell, 1997. The Coming Oil Crisis. Multi-Science Publishing Co. Ltd, Brentwood, Essex.

7. Bob Holmes and Nicola Jones, ibid.

8. US Energy Information Administration, 2003. Annual Energy Outlook 2003 With Projections to 2025. 

9. ibid.

10. Alan Carruth, Mark Hooker, and Andrew Oswald, 1998. Unemployment Equilibria and Input Prices: Theoryand Evidence from the United States. Review of Economics and Statistics 80: 621-28.

11. James C. Cooper and Kathleen Madigan, 10th January 2003. Will the Economy Skid on Oil? Business WeekOnline. 

12. Richard Heinberg, ibid. p. 126.

13. Hugh Williams, 6th September 2003. Hydrogen hype. Letter to New Scientist, vol 179, issue 2411.

14. Cited in Anil Ananthaswamy, 15th November 2003. Reality Bites for the Dream of a Hydrogen Economy. NewScientist, vol 180, issue 2421.

15. This is back-of-the-envelope, and depends on two unchecked assumptions: a. that the average mpg is 30,b. that the average annual mileage is 5000. This gives an annual fuel use of 167 gallons/car/year. One acre ofrapeseed yields 115 gallons of biodiesel. There are 22.7m cars in the UK, which means 33m acres, or 13.3m ha.England's surface area is 13.4m ha.

16. Fred Pearce, 1st June 2002. Fire Down Below. New Scientist, vol 174, issue 2345.

George Monbiot's book The Age of Consent: a manifesto for a new world order is now published