In 1949, a geologist by the name of Marion King Hubbert reached a very disturbing but stunningly obvious conclusion about world petroleum reserves. At some point, they would be used up. In that petroleum is a nonrenewable natural resource of finite quantity, this is not a particularly penetrating observation, except for the time frame he projected.
The term "'Peak Oil," which has recently begun to appear in the mainstream lexicon, comes out of Hubbert's work. It is defined as the point where oil production from any field or collection of fields reaches its maximum. It's generally equivalent to the halfway point for recoverable petroleum from any given supply. Applied to spaceship Earth's entire petroleum reserve, it's that point when our 3 trillion-barrel organic oil tanker is drained by half, a time which by all estimates draws near.
In the 1950s, Hubbert projected that U.S. oil production would peak in the years just after 1970 and that world oil production would peak sometime between 1990 and 2000. He was immediately shunned by the industry for these blasphemous projections, but when U.S. oil production did peak in the early 1970s, his ideas gained a begrudged measure of credibility. Now as we enter the twenty-first century, Hubbert's work is at the center of the peak oil storm.
In the years since Hubbert's evaluation of world reserves, advances in knowledge and computer modeling have allowed today's geologists to refine Hubbert's early projections. Improved techniques for estimating future discoveries of petroleum reserves, increasingly efficient recovery technology, progress in the substitution of coal for oil, and new hopes to refine oil sands have pushed Hubbert's date for peaking world oil production back between ten and twenty years. Let's call it the tail end of the baby boomer generation. Yet despite the growing awareness of this inevitability, and in the face of depletion, we have not addressed this seriously.
Presently the world consumes upward to 85 million barrels of petroleum daily, some 21 million in the United States alone. As Asia's middle class grows and more Asians, particularly Chinese, buy and drive cars, this figure is projected to climb as high as 120 million barrels by 2030–if such production levels can actually be attained. At today's rate of using 30 billion barrels annually, our remaining petroleum will last no more than 60 years.
Since the Second World War to the present, steady and predictable petroleum production has been the backbone of world industry. Automobiles, electric power plants, plastics, fertilizers, explosives, everything from energy production to synthetic materials to agriculture to transportation to war depends on fossil fuels, primarily crude oil. More than half of everything we consume is either grown with, made of, delivered by, or packaged in petroleum products. Petroleum is the economy. Our way of life is completely dependent on the price of oil. The cheaper the better. And the faster it flows the more money it makes for the industry. That difficult fact, as much as any, is at the bottom of our current energy woes.
World economic growth relies on increased oil production. We have seen this clearly in the last few years. A doubling of the price of crude in 2003 caused by production stresses in Nigeria, Russia, and Iraq resulted in a stagnation on Wall Street. The Dow Jones average literally rises and falls in reverse proportion to the price of oil. In a speech to the National Italian American Foundation in October of 2004, then Federal Reserve Chairman and economic guru Alan Greenspan confidently described oil price jitters as merely situational and transitory. The topic of peak oil, however, was never mentioned. In the not so distance future, Mr. Greenspan is unlikely to be so sanguine.
Thus the obvious question arises: If our economy depends so heavily on petroleum, how will we prepare for the end of the Age of Oil? Generally, the party line is leave it to the free market. As supplies diminish, prices will rise. Simple economic dynamics will eventuate conservation and money will flow to alternative energy research. Solar, wind, and hydrogen technologies will be advanced and improved. Alternative sources will gradually replace fossil fuels. Money and necessity will mother invention. That is the genius of capitalism.
Some argue, however, that as oil prices rise, refiners will be able to pass larger and larger portions of their costs on to customers. This is something we have seen over the short term. Record crude oil prices in 2008 also came with record oil industry profits. Rather than tending to conservation, the market may actually hurry to an end. Like water in the desert, oil will become more valuable than money. There will be a run on the petroleum market not a gradual weaning. We will see a rapid depletion of reserves, hoarding, precipitous economic decline, and war. Alternatives will arise out of the ashes, not smooth transition. Conservation now, while we have some time, might well come with an economic roll back as we press the alternatives to carry the load, but a slowdown would be better than an economic collapse. Little pains now in exchange for big problems later make a lot of sense. What's that time worn adage? A stitch in time saves nine.
But let's not be mother hens. Perhaps the free market can be trusted to make wise decisions, and the give and take of capitalism will enable a smooth transition from petroleum to some better alternative or alternatives. This scenario is well argued. But the truth is, no matter what form of new energy we might find, it is highly unlikely to equal what petroleum gave us in its days of glut. Some kind of turn down seems inevitable.
Ethanol, produced by corn or other sources of biomass, is one alternative to petroleum. While it may make some minor energy contribution, it also offers many drawbacks. Ethanol is just as dirty to burn as petroleum, it is energetically expensive to produce, and if population pressures continue to mount, it would be a horrible waste to grow corn for fuel when corn as food will be needed more.
Sadly, waste and excess are nearly as big a part of the problem as industry greed or lack of clean alternatives. Americans use one quarter of the world's energy while representing less than four percent of the world's population. Could Americans simply cut their usage by half, the energy crunch could be pushed back many years and the use of alternatives might come closer to covering the demand.
Regardless of how you read the numbers, five years, ten years, twenty years, the end game for petroleum is at hand, and this fact has considerable geopolitical influence. For any country interested in moving large quantities of armored equipment or battalions of soldiers, control of oil will only increase in importance on the backside of the depletion curve. It already provides significant incentive to U.S. military planning and will soon become the motive behind every nation's diplomatic strategy. Though it has been denied a thousand times, oil was the motive for the United States' invasion of Iraq. A country that holds a sizeable portion of all known oil reserves was controlled by a murderous, warlord want-to-be. In some regards, Saddam Hussein was begging for it. Regime change to corporate America was nothing less than a smart business move.
Oil is our economy, our national security, and the foundation of the job market. With this admitted, was it really such a horrible thing to implement a foreign policy aimed to maximize our control of the most important nonrenewal resource on the planet? If everything that occurs in the global market is bracketed by the OPEC spigot, would it not be significant, if not imperative, to puppet one of the oil cartel's most well endowed?
The answer to this kind of thinking depends on your thirst for bloodshed. In an age of increasing Islamic radicalism it is manifest absurdity. We might as well hand out cases of RPGs to an angry Muslim mob at the Super Bowl. Outrage in the Middle East is as intimately connected to petroleum as climate change is to the burning of fossil fuels. Every time you fill your gas tank, imagine that you are dribbling nickels and dimes into funding a new wave of petroleum wars.
Management of fossil fuels is the defining issue of our times. Taken as one, concerns for petroleum depletion and global warming pin point the most urgent technical question confronting us today, finding cheap and clean sources of energy. While the search for alternative energy sources has been going on for well over a quarter of a century, because oil remains far and away, in some perverse way, the cheapest answer to our energy needs, the market forces of capitalism have not focused enough research monies into the different energy arenas, and only modest inroads have been made in the science of alternative energy. Patience for breakthroughs in hydrogen technology or solar electric conversion is all well and good, but in the meantime we continue to use up our stores of fossil fuels with a haste that is utter madness. Conservation is a better way to go. Not just for the sake of responsible usage, but for the health of the biosphere and respect for the Islamic peoples. Admittedly, this is no easy task. Slowing petroleum use does change the dynamics of the world economy in a big way, nowhere with more impact than in the United States. And, unfortunately, due to the frantic way we live our day to day life, the reward for cutting back is not an obvious or immediate one. It addresses the abstraction of a future some uncertain distance off and a science fiction-like change in our climate. Not even calling it our children's future seems incentive enough to inspire increasing fuel efficiency in the gas guzzling beasts that rule our highways and smog our reason.
In the end, nothing defines the haste and waste more clearly than the wars currently going on in Iraq and Afghanistan. If the need for petroleum were not so all encompassing and politicians not so deeply in the pockets of the oil industry, we would not be there. Many thousand soldiers would still be alive. Tens of thousands of innocent Iraqi and Afghany citizens would still be alive. Many cities in the two countries would not be rubble. Tens of thousands of young Islamic men would not be considering giving their life to Jihad. And some trillion dollars and counting would not have been spent on helter-skelter destruction. Had we the foresight, we could have targeted half that sum for alternative energy research. And by now, perhaps, a clean, viable petroleum substitute would be at hand. Instead, like a drug addict, we have made one bad choice after another to extent our habit one transient fix at a time. Common sense says it's not worth it. Not even close. It's time to decarbonize.