Peak oil is an event so momentous it will turn society as we know it on its head. Every citizen, every community, every business will be affected. We owe it to ourselves to understand the issues and how to build resilience into our lives and into the communities around us.

by David Hamilton

[This article refers to the Tasmanian government's Oil Price Vulnerability Study, currently being conducted]

Why supply is an issue too.

The Background Info section of this web site explains that oil fields inevitably decline, and since peak discovery was in 1964, global oil supply will shortly enter an inevitable decline – the “second half of the Age of Oil”. Thus, reduced availability will be an absolute constraint: oil will simply become increasingly unavailable, regardless of price.

Put simply, the fact of peak oil means the end of business as usual.

What decline rate is expected?
The rate at which oil fields decline varies from field to field; in addition the companies operating the fields can usually reduce the rate of decline or delay the worst of the decline by spending money trying harder and harder to extract the diminishing amounts of oil left in the field. Predicting the global rate of decline of oil supply once we are clearly past the peak is therefore difficult. Most predictions seem to be in the range 2% to 4% per year, but higher predictions can be found. If the decline is a steady 2% per year, then oil supply will halve every 35 years; if it is a steady 5% per year (at the higher end of the predictions), then oil supply will halve every 14 years.

The time frame for the Tasmanian Oil Price Vulnerability Study is 20 years, so even at the low end of the range of predicted declines, the availability of oil will decrease significantly over the period, as we appear to be already past the absolute peak of oil production. There is a further issue the Oil Price Vulnerability Study is ignoring: whether the oil that is available will be distributed around the world in proportion to how it is currently used. For example, oil exporting countries could decide that they want to slow down the rate at which they export oil to allow a larger buffer for their own use over the years.

What are the implications for oil supply?
Putting these factors together, the outlook for oil supply over the next 20 years is at best a gradual decline of around 2% per year; at worst a larger decline will underlay a tumultuous period which includes rapid changes in availability and conflict over access to oil.

What difference does including supply issues make?
All of us make decisions based on assumptions about the future. When we move house, change jobs, buy cars, we are assuming (perhaps unconsciously) what the future will be like, and often part of that assumption relates to future availability of petroleum fuels: petrol, diesel and jet fuel. A person knowing that price rises were inevitable might decide that given present and expected income and living expenses they could manage the price rises with a slightly smaller or more efficient car, or a bit less travel – life would go on much as at present. If however a person knows that fuel will be subject to occasional severe shortages and will consistently become less available, then they are more likely to decide that the future will be significantly different from the past, and change the decisions they would otherwise make.

Nick Towle et al’s table, below, summarises the differences that considering supply as well as price makes:

by Chris Harries

The bottom line is…

It’s not hard to get a strong debate going about energy choices. Most Tasmanian citizens have a personal preference for various choices such as wind, wave, geothermal, nuclear etc, and most people have a position on the ones they don’t particularly like. Then there are keen enthusiasts out there who believe they have the ultimate solution to our energy future, and these people often disagree bitterly with each other.

So, who are we to believe? How do we make rational choices?

In this article I am going to try to do the impossible, introduce some rationality to our energy choices. At the end of the day, alternatives have to be realistic, not based on romantic whims or wishful thinking. The sums have to stack up.

So here is a short guide to what matters most – real energy. That is: what is the net energy return you will get from any energy resource? And how do energy choices compare? And is it actually possible to replace oil?

Why you need to know about EROEI

At this point we need to introduce a fundamental concept. It’s called the EROEI. This stands for ‘Energy Return on Energy Invested’. It’s a big mouthful, I know, but you are going to hear this term a lot in the near future so this may be as good a place as any to become familiar with it.

Firstly, let’s go back a few steps. Our present world economy was built on cheap oil, discovered mostly during the last 100 years. Although it is non-renewable, there’s lots of oil in the ground and under our sea beds. About 8 trillion barrels of it. Some of it is very easy to get. This is called ‘sweet crude’ – when a drill is sunk, up gushes the sweet crude oil. It has a sweet taste and is a fairly thin liquid that can be easily converted into all sorts of fuels and plastics and other products.

So, this is our starting point. Our present world economy – the one that provides us with nearly everything we now rely upon – was built on this foundation, this amazing product, this low-cost energy resource that was really easy to get and turn into thousands of different products, right down to the shirts on our backs! So amazing, that in the early bonanza days it used to take just one unit of energy to produce 100 units. One barrel of oil to produce one hundred barrels – what a bargain!

Our big problem now is that there’s nothing like sweet crude and there’s nothing to replace it with.

Staying with oil for a moment, after an oil well is tapped and the easy-to-get stuff stops gushing out, what’s left behind is called ‘heavy crude’. This is a thick, viscous substance that permeates the rock structures way down below. It is much harder and more costly to get out, because they have to do costly things like pump in millions of litres of water or gas to try to force the oil to the surface. Or turn tar into liquids, like they are doing on a grand scale in Canada.

What’s more, it takes a lot more energy to convert heavy crude into usable products. The upshot of all this is that the net energy return (EROEI) from older oil wells is nothing like 100 to 1. The ratio for most of oil wells is now less than 30 to 1, and dropping fast. The chart below shows this in graphic form.

(Estimating EROEI is a rather complicated job and analysts come up with differing figures. When looking at this chart it is best to focus on the shorter dark green bars, because these include all the add-on energy inputs required to refine and so forth.)

As you can see that amazing product that has provided our world, with all its extensive transport infrastructure and long distance food production, is shrinking so rapidly that it can no longer be sustained.

The situation is actually even worse. Whilst easy-to-get energy is getting harder and harder to find, energy demand is still growing quite sharply. We have a looming energy emergency. So the race is on to find alternatives…. well, the best possible substitutes, anyway.

How do the alternatives stack up?

The chart below shows the EROEI for a variety of alternative energy supplies. Again, it’s best to focus on the shorter dark green bars, because these include real factors that shouldn’t be ignored – such as decommissioning when the energy plant is retired, and so forth.

Notice that nothing compares with sweet crude – with its magnificant EROEI of 100 to 1. In each case much more effort – and also environmental disturbance – has to take place in order to get less energy than we are used to getting. (In some cases, like the US corn-to-ethanol program, the net energy return is actually negative – more energy is used to make the product than is recovered from the process. Turning coal into liquid fuels is much the same.)

In general, an EROEI has to be at least 3 to 1 in order for the process to be economically viable. You will notice that many of our choices sit barely above that threshold. Note also that in order to sustain the sort of society that we have requires an estimated EROEI of energy supply 12 to 1.

Now, before weighing up these alternatives and getting too evengelical about any one of them, there are other complicating factors to consider too:

    Environmental costs: We have to consider that each energy source has its own set of environmental problems (e.g. climate pollution…nuclear wastes… birds killed by wind turbines… natural ecosystems drowned by dams), and these are difficult to assess with hard numbers. In other words, there is always a price to pay. You can click here for a broad summary. But more on this further below.

    Amount of energy that’s potentially available from each resource: Some energy resources are potentially immense, such as the amount that can (theoretically) be obtained from nuclear fusion or solar power. By contrast, many of the world’s best hydro-electric sites have already been developed – more remote schemes in difficult terrain have a lower EROEI than that shown in the chart. The same applies to very difficult-to-get oil resources sitting kilometres under the ocean bed.

    Cost of energy produced: Having a viable EROEI is not enough to make an energy resource economically viable or competitive. Nuclear power, for instance (once dubbed as so cheap that it wouldn’t need to be metered) has a nice positive EROEI but has been beset with so many safety and other concerns that the unit cost of production to date has been barely competitive, even when subsidised by government.

    Using up precious oil supplies to produce alternative energy: To substantially replace much of the coal and oil that is now being used up would require the construction of tens of thousands of wind farms, nuclear power stations and geothermal plants, all of which require energy to manufacture and construct. And where does that energy mostly come from? You guessed it, oil and coal. Catch 22. The very act of trying to meet growing energy demand with alternative energy would gobble up much of the cheap oil energy that is still yet available. In this way, a policy to aggressively expand renewables to their maximum extent can actually worsen climate change and the peak oil problem. (This is known as ‘energy cannibalism’.)

    Electricity is not the same as energy: This last one is the biggest bogey of all. The world’s immediate energy crisis is to do with oil shortages and spiralling costs of petroleum products – the stuff that is used every day to power jet airliners and cars and freight ships and to produce fertilizers and clothing and building products. You will notice that most of the energy options in the above chart are electricity products. You can’t fly a jet liner on electricity.

Now, in theory it may eventually be possible to use electricity to produce transport fuels (hydrogen) but the wholesale conversion of the world’s infrastructure and transport fleets to a different energy regime would take at least twenty years (and, even then, the EROEI of doing that may well be negative, and therefore not worth doing). Too little, too late.

In short, there’s no silver bullet. Nothing can go near to replacing cheap oil. The scale of the problem is so phenomenal that in order to make up for oil depletion, a huge 1 Gigawatt nuclear power plant would need to be built every single day for the next 30 years, and even then the product (electricity) would not match need (liquid fuel).

To be useful at all any energy supply has to be of a quality and availability to match real needs and this is a very complex business and the subject of many heated debates – too much to deal with here. (If you want to explore this more I have put some EROEI references at the foot of this article.)

But wait… there’s much more to the EROEI story!

We haven’t finished yet. So far I have only talked about energy supply choices, and how difficult it is to choose between them, and how none of them can really do what cheap oil has done for us.

Now let’s turn to our energy uses? How does the EROEI of these stack up?

Basically the same concept can be applied. If you invest in an item, like an energy-efficient shower head, then it is very easy to calculate the amount of energy used to produce that item and compare that figure with the amount of energy that you may save by using it. In the case of a shower head, the EROEI can be greater than 300 to 1.

The chart on the right shows the EROEI of ceiling insulation – to use just one example. Over its service life, ceiling insulation in a heated Tasmanian home will deliver vastly more energy saving than what is used to manufacture it. (Note that the 200 figure is understated, in reality the EROEI may be much greater, depending on the individual circumstance where the product is installed.)

The first thing that will jump out at you is the remarkable EROEI of energy saving technologies as compared to the EROEI of producing energy in the first place (from whatever source).

The second thing that will jump out at you is the absurdity of investing tens of thousands of dollars on supplying energy, for very low net return, without first dealing with energy wastage – the ‘low hanging fruit’.

For instance, I could choose to install solar pv panels on my roof at a whopping cost of about $10,000 (heavily subsidised by government). After two decades that product will generate an eightfold net energy return to my household – once production and installation energy inputs are taken into account – and it will take twenty years to pay for itself. By comparison, I could install an energy efficient shower head at a cost of just $30 and that product will deliver a 300 fold net energy return to my household and it will pay for itself within just six months.

The shower head wins hands down. In fact, such contrasts are so dramatic, it would have been far more cost and energy efficient for the federal government to offer efficient shower heads to all Australian households than to expend considerably more taxpayer money subsidising solar panels for a relatively small number of middle class roofs.

(The above chart compares two hot water investments. In the case of solar, the payback period would be 20 years but is partially reduced via government rebates and incentives).

A second example: the net energy return (EROEI) of a solar hot water system is ten times higher than that of a solar photovoltaic system (off grid) and five times higher than a photovoltaic system connected to grid. Yet householders blindly make many such decisions every day, sometime at great cost, without the benefit of EROEI analysis.

So, what does EROEI tell us?

EROEI analysis provides us with an absolute bottom line and also a way of comparing real energy choices.

The bottom line is as follows:

    1. There’s no silver bullet. Trying to maintain a society that is dependent on huge and growing volumes of cheap energy is an utterly futile challenge. Our society’s energy thirst can’t be satiated, not from any combination of known energy sources. Seen from this perspective, our national obsession with energy supply choices (wind, versus nuclear, versus geothermal, etc) can be seen to be unhealthy, divisive and misdirected.

    2. Knee jerk attempts to fill the ‘cheap oil’ gap with other energy supplies is worse than futile, it has the effect of giving out a signal of false hope, and thus prevents society from making the more substantial cultural and behavioural changes that we have to make in order to move toward true sustainability.

    3. Hard nosed decisions do need to be made about the best mix of energy supplies that can supply the needs of a sustainable society into the long term future, but the absolute priority of government and citizens alike should be directed at 1) deep cultural changes – like the design of our cities and our consumer habits – and 2) energy saving choices, because these deliver a much better energy and financial return at much less cost and much less environmental damage – and much less raging controversy – than the various supply options offer.

    4. Government energy policies should be built around rational energy analysis, with a focus on energy descent policies, not around futile attempts to maintain business-as-usual.

What about householders who wish to make sensible energy decisions?

Unfortunately not enough research has been done at this stage to supply a nice list of EROEI values for all of the hundreds of energy supply and energy saving choices that are available. The EROEIs may vary from approximately 1,000 to 1 for insulation lagging on an exposed hot water pipe to much more marginal choices, such as double glazing or electric cars.

If anybody out there can find a comprehensive list that compares the typical net energy returns on various domestic energy choices we would be very grateful: please just send us an email.

Meanwhile, Sustainable Living Tasmania is one organisation that has been championing a ‘best bang for bucks’ approach for a long time and can provide advice on the most worthy and cost-effective ways to make your home and lifestyle much more sustainable and comfortable.

Further Reading

[The background data in this article was derived from a number of sources including the pioneering work by C.J. Cleveland, H.T. Odum, Nate Hagens, Dr Charles Hall, Tom Konrad and Gail Tverberg. The numbers are illustrative, recognising that EROEI figures vary from researcher to researcher.]

by Chris Harries

There is no “quick fix” that can resolve the problem of world oil depletion. There”s no silver bullet, no magic energy source that can replace oil.

But there are many positive responses that we can make right now.

Our responses to both climate change and peak oil need to 1) be multi-facetted and 2) started right now whilst there is time to make an orderly transition. Below is a summary of the 10 steps that are considered to be vital.

The main thing to remember is that adjusting and adapting can be one of the most rewarding and fulfilling journeys you could undertake. Enjoy the adventure!

1. Dealing with denial

How do you personally cope with peak oil and climate change news?

Do you meet them head on and do your brilliant best to respond? Do you deny that they are happening? Do you just want to shut them out and get on with your private life? Does it make you want to bunker in and defend your own patch? Do you fear the worst and respond with despair?

All of these are normal human reactions when a person faces confronting news. They are called stages of grief, and most people go through a range of such emotions, and work them out over time. Being fully aware of our own level of denial (or avoidance behaviour) is the first step most of us need to take if we wish to move forward.

2. Building personal resilience

The concept of resilience is central to building a sane, positive future.

As our society has become more and more complex and centralised we have enjoyed many consumer benefits, but, in turn, we have largely lost control over our lives and over our personal security.

We have allowed ourselves to become almost totally reliant on distant resources and skills to provide us with our basic needs. And if things break down then we no longer have nearby resources and connections that can replace those needs. In short, we have become very vulnerable to chaos and would not survive very well at all in times of great change.

There are many things we can do right now to increase our personal resilience.

3. Strengthening community resilience

Building personal resilience can help us along the way, but history shows that “going it alone” rarely works in times of change or social stress.

A community is much stronger than the sum of its parts. You and the people around have a great array of skills and resources that they can share. The people who thrive best during times of upheaval do so when those around them pool their efforts and draw on each other”s resources.

“If we try and do it on our own it will be too little, if we wait for government to do it it will be too late, but if we can gather together those around us—our street, our neighbourhood, our community—it might just be enough, and it might just be in time.” (Rob Hopkins)

4. Creating “Transition Communities”

Informal communities are great, but much more can be done when communities of people get together with a real commitment to collectively confront the “big picture” issues facing us.

With this in mind, Transition Communities came into being – starting off in Ireland, at Kinsale Community. Transition initiatives have since sprung up in many communities throughout the world, including Tasmania. Their aim is to build resilient communities that are able to withstand severe energy, climate or economic shocks while creating a better quality of life in the process.

Grand Vision: “Every community will pool together its collective creativity to unleash an historic transition to a future beyond fossil fuels; a future that is more vibrant and resilient; one that is ultimately preferable to the present”.

5. Reducing our footprints

In a wealthy nation like ours, any citizen born into the age of oil can’t help but have a heavy ecological footprint – our cities and highways and homes and transport and industrial infrastructure have all been built around a notion that the energy binge can go on forever. And we are all an intrinsic part of that culture.

Even the most morally indignant person is confronted by a range of barriers that make it hard to change our ways, so it’s all too easy to just go along with it, rather than make an effort to break our lifelong habits and change our consumer choices. Until now.

Spiraling energy prices are rapidly changing all that, and doing what’s good for our hip pockets ends up being surprisingly good for our health and well being.

6. Re-localising our economies

The globalised economy is making we good citizens far too dependent on a system that may one day fall apart. What’s more, rising fuel prices will force globalisation to go into a partial reverse anyway, leading to a much greater focus on local production.

The economies that thrive best will be those that start to provide those basic services and commodities that can be produced in their locality. Strengthening of local economies will also have many spin-offs in the strengthening of community bonds, sense of purpose and cultural richness.

Re-localisation is… “the process by which a region or local neighbourhood frees itself from its overdependence on the global economy and invests its own resources to produce a significant portion of its food, energy and other needs from local financial, natural and human resources.”

7. Creating “Energy Descent Action Plans”

As fossil fuels dwindle and become more expensive, our whole society and economy will be forced to live within the annual energy budget that can be provided by the sun and wind and hot rocks and such.

But, as Ted Trainer of the University of New South Wales argues, the idea that modern consumer society can be powered entirely by renewable energy sources is fanciful and impossible. Redesigning our society and economy to use much less energy is absolutely imperative.

One of the most useful policy tools to do this is the Energy Descent Action Plan. It’s a way of taking a big complicated problem and breaking it down to managed, bite-sized pieces. An EDAP shows how a community (or even a whole nation) can work together to move stepwise towards a sustainable world.

8. Fostering alternative energy

For many people, ‘alternative energy’ throws up images of idyllic wind farms and solar panels taking over from dirty fossil-fuelled power stations. End of story, problem solved!

Unfortunately, it’s not quite so easy. Wind, solar and geothermal energy are all very positive and need to be promoted where sensible, but it’s important to put them into an intelligent context. They can’t, for instance, replace the 95 percent of liquid fuel energy that is used in both food production and transportation. Bluntly put, dilute energy alternatives can not solve the oil crunch, they can only play a part.

Addressing the oil crunch requires a wide mix of solutions, like dealing with our diets and wasteful consumption patterns and the design of our cities. Once we accept that broader context, then alternative energy options have a tremendously important role to play, and deserve our strong support. In doing so, let”s be careful with our choices of alternative energy so that we aren”t just creating new problems somewhere else or sometime else.

9. Forcing our governments to act

“I don’t consider an issue is important to the public until 100 people come knocking on my door to tell me that it is”. (Tasmanian politician)

Well, that’s just honest plain speaking. Politicians rarely rise up and take action unless their constituency is banging on the door.

Although the process of government can be horrendously slow, only government has the power, finances and resources to respond adequately to critical issues like that of oil depletion, so it is vital that they have a strong policy platform in place.

In the face of rising oil prices, there are many things that state and local governments should be doing to adjust economic levers, to prepare the public for oil depletion, to reduce costly energy imports and to protect vulnerable sectors from avoidable hardship.

10. Signing the “Oil Depletion Protocol”

This one is mainly for governments and large institutions. The Oil Depletion Protocol is an international agreement that enables governments of the world to cooperatively reduce their dependence on oil.

How does it work? Each nation, state or agency that agrees to sign the protocol commits to reduce its oil imports (or usage) and exports by a specified amount each year – about 2.6 percent. Doesn”t sound much but when compounded each year for 20 years that small commitment amounts to a hell of a lot of energy.

This simple formula is, in effect, a global rationing system. If the entire world adopted the Protocol, world oil usage would decline by almost 3 percent per annum, thus stabilizing prices and preserving the resource base.

You can explore the Protocol”s website by just clicking on the graphic above.

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Feb 232011

The oil that is used to make our petrol and other transport fuels is a finite resource – literally a ‘fossil’ fuel created millions of years ago.

Modern society, as we know it, is powered by oil. Oil has been the key resource that has delivered phenomenal economic growth. And as our society has grown, so has oil consumption. Around the world we are now using approximately 83 million barrels of it per day. Now our entire systems of production have become totally dependent on it. Without oil and our society would collapse very quickly.

Peak Oil does not mean that oil will suddenly run out. It does mean that the era of cheap oil is over. Simply put, Peak Oil is the point in history when maximum oil production is reached – beyond that point, less and less oil is produced as the major oil reserves run down, leaving a growing gap between supply and demand.

A supply gap like this inevitably results in sharply increasing prices. The graphic below shows this in pictorial form. The yellow area represents oil demand that can’t be met. The ramifications for human society will be very profound.

Why can’t we just increase oil production?
Sounds easy, but oil production is not an easy game.

The problem is, the easy-to-reach cheap oil was discovered and extracted first. This was the land-based oil found near the surface, under pressure and easy to refine. The remaining oil tends to be off shore, deep underground, far from markets, in smaller fields and of lesser quality. This requires more money and energy to extract and refine. And so, the rate of extraction falls.

To make matters worse, all oil fields eventually reach a point where they become no longer viable. Once it takes the energy of a barrel oil to extract a barrel of oil, then there’s no point producing it.

When will Peak Oil happen?
This is not a theoretical future event. It is with us right now. In recent times the debate about peak oil has switched from Will it happen? to When will it happen?

What is definitely known is that for about 30 years the world has been finding less oil than it has been consuming. The rate of discovery of new oil fields actually peaked in the 1960s. Around 50 oil producing countries have already peaked and now produce less and less oil each year – including the major USA and the North Sea oil fields.

The red bars in the above graph shows how oil discoveries peaked way back in the 1960s. The green bars show the rate of oil discovery that we can expect from now on. The black line shows actual growth in consumption.

Every year since 1984 less oil has been discovered than has been consumed. Today, only one barrel of oil is being discovered for every four consumed. Time’s running out.

A number of projections that have been made about the precise ‘peak oil moment’. There is now a growing consensus amongst analysts that is has already peaked’ (July 2008 is a commonly agreed date) or will do so within the next five years – although the oil industry itself projects a much more optimistic 2035.

The chart above is based on actual production and expected oil output from all sources, including non traditional resources such as tar sands.

What does Peal Oil mean for the future?
Whatever the date, society is simply not prepared. Our whole society depends utterly on a single commodity for nearly all of its production, including essential transport and food supplies. It takes decades to change over infrastructure and clearly we don’t have decades to do it.

Peak Oil will firstly translate into higher prices for both food and fuel and this will cause immense stresses on the not so well off. It will wreak havoc on poor developing nations.

In the longer term everyone will be seriously affected. There is no response to Peak Oil other than a total restructuring of our economies and means of production. The earlier we address these problems the less stressful it will be.

This website is dedicated to exploring the likely impacts of peak oil on Tasmania and how we ought to be responding to it.

Feb 212011

In recent years a number of influential government and businesses agencies have issued reports warning of the consequences of peak oil and the need to respond with urgency.

You can download some of these reports by clicking on the links below.

The information and opinions that they contain are unequivocal – business as usual is no longer a viable option for the planet.

The Australia Institute’s report Running on Empty says:

…skyrocketing oil prices are likely to result in severe disruption to economies, with central banks raising interest rates to slow runaway inflation, people out of work, famine, hunger and serious civil unrest. It is a scenario that governments and their constituents should be attempting to avoid at all costs but so far very little has been done to prepare for or contend with the eventuality.

Lloyds of London’s report Sustainable Energy Security (white paper) says:

International oil prices are likely to rise in the short to mid-term due to the costs of producing additional barrels from difficult environments.

Britain’s Peak Oil Taskforce’s report The Oil Crunch says:

Oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity potentially by 2015

The Queensland government EPA report Towards Oil Resilience says:

Oil is the key raw material for petrol, diesel, jet fuel, industrial oils, numerous chemicals and most plastics. Many industries are dependent on oil in ways that are not immediately apparent… our systems for producing and distributing food rely on oil, not only for fuel for farming machinery and transport, but also as a raw ingredient for agrichemicals, fertilisers, packaging plastics…

The International Energy Agency’s report World Energy Outlook 2010 says:

…if governments do nothing or little more than at present, then (oil) demand will continue to increase, supply costs will rise, the ecnomic burden of oil use will grow, vulnerability to supply disruptions will increase and the global environment will suffer serious damage.

The Robert Hirsch (US) report The inevitable peaking of world oil production says:

The era of plentiful, low-cost petroleum is approaching an end. Without massive mitigation the problem will be pervasive and long lasting.

The New Zealand parliament’s research paper on Peak Oil The next oil shock? says:

There is a risk that the world economy may be at the start of a cycle of supply crunches leading to price spikes and recessions, followed by recoveries leading to supply crunches.

And here is a short essay“You don’t have to take my word for it”

by Chris Harries

Question: Which is the more serious problem: climate change or peak oil?

Some say it is peak oil, because that issue will impact much sooner – especially on the poor who won’t be able to afford skyrocketing costs. Others say it is climate change because we are threatening to take the planet’s climate system beyond the tipping point, and then the whole planet will suffer.

Clearly there is no right answer. It’s far more constructive to treat both peak oil and climate change as equally critical. Both can lead to collapse.

Climate change makes it essential that we reduce carbon pollution. Peak oil makes it inevitable that we do. Climate change tells us that we need to act, whereas peak oil may take any choice out of our hands. Peak oil may even motivate politicians to act on climate change, because there is no way of squirming out of it.

In truth, climate change and peak oil are both very serious in their own right, but the two issues are joined at the hip. Only by coupling peak oil and climate change can human society succeed in switching to a sustainable future. If we respond to either without looking at the other then we can just make things worse.

By way of example, if we try to respond to the depletion of world oil supplies by converting our huge coal reserves to liquid fuels, then we may (temporarily) keep all our cars and trucks on the road but that ‘solution’ will put more pollution into the atmosphere and only worsen the climate change problem. (The huge tar sand mines in Alberta, Canada is a gruesome real-life example of this folly.)

Conversely, if we respond to climate change by trying to make renewable energy supply as much energy as coal and oil does, then we will quickly find that such a conversion is impossible because the conversion itself requires immense investment in declining fossil fuel energy that we don’t have. Catch 22! (Manufacturing bio-fuels from crops is a real-life example of this folly – generally speaking it deprives us of land-for-food resources and increases the demand for petro-chemical fertilisers.)

Both problems boil down to energy problems—and energy is essential to the maintenance of agriculture, transportation, communication… and just about everything else that makes up our modern global economy. Fossil fuels are ingrained in our entire infrastructure.

The only way to bridge both peak oil and climate change is to develop a culture shift away from our heavy reliance on fossil fuels and develop what is called the ‘post-carbon economy’. Energy efficiency and deep cultural change have to be the dominant responses to both issues.

To put things in a nutshell, peak oil can be thought of as a ‘what’s in the tank?’ problem and climate change as ‘what comes out of the tail pipe?’ problem (quoting Richard Heinberg). Both of them are to do with the energy we use, both of them require us to look at where we get our energy from, what we use it for and how much we use.

Most importantly, the solution to both problems is a fundamental ‘energy transition’ – that is, a set of policies that reduce both carbon emissions and oil dependence.

The neat logo at left represents the duality that exists between these two critical issues. Interestingly, the logo was devised by David Holmgren, a Tasmanian based initiator / inventor of the huge global Permaculture movement.

See Bridging Peak Oil and Climate Change Activism by Richard Heinberg.

Dec 212010

Impacts of oil depletion:

  • Oil will not just “run out” because all oil production follows a bell curve; therefore the issue is not having enough to keep our economy running.
  • An oil based economy  doesn”t need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as online casino 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.
  • In the oil crisis of 1973 shortfalls in production as small as 5% caused the price of oil to nearly quadruple.


Life after the oil crash
Oil Depletion Protocol

By Dr Stuart Godfrey

James Moody, a CSIRO guru on innovation, is lead author of a book, “The Sixth Wave – How to succeed in a resource-limited world”. It offers a bold vision for facing up to the massive difficulties posed by Peak Oil and Climate Change.

The book’s title refers to a Soviet economist who noticed that Western economic activity could be understood in terms of “waves” of forty to sixty years’ duration, each characterised by the rise and obsolescence of a particular technology.

Updating Kondriatev’s picture, the book identifies five waves that have already taken place:

    1) canal transport in the 1700’s
    2) the steam (railway and ship) revolution
    3) introduction of electricity
    4) petroleum-based innovations
    5) the computer revolution

Each new wave started with a period of economic uncertainty and depression as the long-term negative side-effects caused by the old technology came to the fore, accompanied by the birth-pangs of the new technology. The longest delays in this reorientation related to developing the legal basis for adjusting the world economy to fit the needs of the new technology.

The authors see us at the start of the ‘sixth wave’ – and this will be about following Nature to make our economy a closed loop operation in all raw materials. They describe an amazingly wide range of innovations that already exist, that collectively have huge potential for reducing the wastefulness of present-day society. The authors explain the pros and cons of different incentives for reducing waste.

The start of the Sixth Wave may be particularly painful, because our global love affair with the family car is so deep. Because of this, our politicians do not dare do what they should do. If Nature does their job for them, she will give us lessons so severe – in terms of crises in food, water, mobility and general societal disorganisation – that human society is unlikely ever again to forget them.

The task ahead for each of us is to prepare as fast and as well as we can for the consequences of Peak Oil described elsewhere on this website – but to remember, in the stress of this new, frightening activity, that humans have always been immensely inventive, and we are on a huge, historical peak of inventiveness right now.

On top of this, the old English saying: “There is nothing like the prospect of hanging to sharpen a man’s mind” gives hope that we will collaborate well enough and inventively enough so that that under stress, our transition to a more settled future – in line with the mature “Sixth Wave” – will be reasonably short.

(Dr Stuart Godfrey is a marine scientist, now retired and an active member of the Peak Oil Tasmania working group.)

For a very readable overview of the global peak oil problem, it is well worth reading Michael Klare”s analysis “Crude Awakening”.

Crude Awakening was published in 2004 but still a very good overall account. Klare is a noted Professor of World Security Studies in the US.

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