"The life you know, the stuff you take for granted, it's not going to last.”
- John Connor in Terminator 3.
Take a look around you. Wherever you here, look up from your computer, and just take in what’s around you. Just about everything in your environment comes to you courtesy of Cheap Oil. The plastic of your keyboard, the vinyl on your desk, the food in your refrigerator from your local Pick ‘n Pay – that food was trucked, shipped or airlifted to you. We’ve got televisions made in Korea, iPod’s made in China, and more than half of South Africa’s fleet of motor vehicles comes from doer anderkant. ¹ Many of your souvenirs, coasters, glasses, paintings, or porcelain you’ve purchased on an overseas trip. You probably flew on one the planet’s ultimate gas guzzlers, a Boeing 747. You flew cheaply.
You paid for your holiday by driving from your home to work and back, every day, and saving some of your paycheck each month. Did someone drive your kids to school? You didn’t really notice how much fuel you were consuming because it didn’t cost a lot. You’re starting to notice it now.
Everyone else who is stuck in traffic around you is living much the same way you are.
A theory put forward by Dr. M. King Hubbert predicted, with remarkable accuracy, the peak and decline of American fuel reserves in 1970². This theory forms the basis of Peak Oil Theory for the planet. This Theory is subscribed to by many experts who predict that the life we know is all going to change. Not a little but a lot, and not soon, it has already begun.
A Hungry and Thirsty Planet
"Our ignorance is not so vast as our failure to use what we know."
M. King Hubbert
If it seems unlikely to you that we’re about to run out of oil, you’re right. We’re nowhere near running out of oil. In fact, we’re currently producing the most we’ve ever produced in the history of oil production. We’re producing around 30 billion barrels annually, and the planet is gulping down over 80 million barrels a day. We’re trying to increase capacity, especially refining capacity as fast as we can. The problem isn’t just supply, you see, it’s demand. Demand continues to skyrocket, particularly from countries like China and India, with their billion plus populations. In China alone, the demand for motor vehicles means that 30 000 new cars are added to the roads of Beijing every month (1000 new cars a day).4 Imagine how that drives up the demand for oil. Not just to fill up those cars but bear in mind you need twenty seven barrels of oil for the construction of one car (in terms of energy). The worldwide fleet is now around 600 million, and 200 million are in the USA. The problem is that oil supply can no longer keep pace with demand.
Unfortunately, it doesn’t end there.
If our only problem was a demand side problem, we could take a deep breath, and try to be patient.
But the problem is not only on the demand side. It’s on the supply side too (see attached graphic), which makes this a global phenomenon that will be felt by all, in many ways that are the same, and in many that are not.
It’s a popular fact that none of the large oil companies (Shell, Exxon etc) have invested much in building new refineries simply because they know they won’t be able to provide extra refining capacity (they’ve explored everywhere and can’t find significant new sources of oil).
But haven’t we been here before? Yes, there was an oil crisis in the early 80’s (many news reports that make comparisons to today’s high prices refer to the records set in this particular period), and we survived it, didn’t we? How did we do it? With ingenuity. Oil exploration companies exploded over the planet, using new drilling methods in harsher environments, drilling the crust underwater or in subzero conditions (previously uncharted territory). These forays paid off. The North Sea finds yielded handsome new discoveries (for the UK and Norway), and so did Prudhoe Bay field in Alaska. That was it. That is basically what we found, and it’s lasted until now. Just over 20 years. We’ve found some scraps besides, but basically, we’re back in 1978-1980, this time with no North Sea fields beckoning, no Prudhoe Bay, and a very different planet. There are many more cars on the highways now, and millions more mouths to feed.
But surely we have the technology to save us, some have argued. Many intelligent people argue (even in newspapers like The New York Times) that we are smart enough to solve this problem too. We’ll just use technology. We’ll become even more fuel efficient. But technology is not energy. And without energy, technology becomes obsolete. Simple example: a car with no petrol doesn’t move, no matter how efficient it is. A computer with 200 Gigs of memory won’t operate if the electricity isn’t on.
Technology
We have turned to technology, in ways that have helped us, and in other ways (the Ghawar field as a prime example) that are questionable at best. The cars on the road today are twice as efficient as their forebears of a few years ago. And we’re getting better at sucking the oil out of the Earth too.
In Saudi Arabia for example, Ghawar is the largest single oil reservoir on the planet. It pumps out roughly 5 million plus barrels a day. But today, even Ghawar is hardly our panacea. For the oil barons there, it’s not coming out fast enough, so they have started pumping seawater into Ghawar, and voila, problem solved.
Over the short term, Ghawar’s capacity has increased slightly. But pumping in seawater into the world’s biggest oil well is an incredible gamble. What people are already seeing is 7 million barrels of seawater going into Ghawar (according to Matthew R. Simmons in Twilight in the Desert). Now we know only 5 million barrels a day is coming out. Meanwhile the sensitive geology of the well is being eroded and destroyed and a lot of this vital resource is being lost or ruined by this process.
If you’re interested in the topic, just google ‘Peak Oil’ or any of the terms used in this article (like ‘Ghawar’) and see what you come up with.
If you google ghawar seawater you’ll get this article6, fourth from the top:
Crude Awakening
The only hope for meeting growing world demand for oil is to tap Saudi Arabia's reserves. A Bush advisor on energy says those reserves don't exist.
By Kevin Drum
Simmons, an expert on energy investments, also says that the Saudi’s have consistently overstated their reserves. Recently we’ve seen Shell7 do the same on their balance sheets.
In fact, nobody knows how much oil is in the deep dark crevasses underground. But by using Hubbert’s physics and mathematical models, many authoritative people believe we are in the Peak Oil era right now. Some geologists have predicted Peak Oil by 2010. Other say we’re at the peak right now. Kunstler suggests we will see the Peak in November (Thanksgiving Day to be precise) 2005.
What Is Peak Oil?
"Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality..." James Howard Kunstler in The Long Emergency
Peak Oil is the top of a bell supply curve which represents that from now on, we will run out of oil faster and faster.
So if it seems like we are out our maximum capacity right now, and can’t pump out and more oil, any faster than we are, then we’re at the peak. It does seem like that if you follow the news. Despite these Hurricanes, despite the ongoing high prices, no country has been able to come up with spare capacity. Not a single one.
To complicate matters, the peak can only really be seen in ‘the rearview mirror’. Only once we’re in the crisis, in a worsening crisis, will we know we’ve reached, and passed the peak.
In plain language, once we have passed the peak, no matter how much we pump or refine, no matter what we do, we will get less oil out of the Earth. There won’t be enough for everyone and each day that passes there will be less and less. This means that prices will go through the roof no matter what we do (Simmons predicts $100 per barrel this winter, that’s December/January 2005/2006 and American gas prices around $10).
Effects
This effects you whether you live in New York or Orkney. The reality is this:
We are living on a planet that has enjoyed what Kunstler calls “the cheap oil fiesta”. Populations have expanded to bursting point, both in number and girth. Guess what made this possible? The Green Revolution, all the pesticides, fertilizers and equipment to harvest it all was powered by Cheap Oil. Peak Oil means that the supply lines begin to shut down, airlines especially, because oil is simply too scarce and too expensive for these supply runs to run profitably any more. Goodbye Wal-Mart, goodbye Pick‘n Pay. One of the first dilemmas people everywhere will face is food shortages.
We will see a drastic reduction in the human population of this planet as a result.8
What Can We Do In South Africa?
There are two answers:
1) Not a lot, since we’re addicted to oil in almost every aspect of our lives, and we’re already in the Peak Oil era. We must change how we move around, how and where we get our food, where we live etc. and some may find they can’t (or won’t).
2) Plenty. Time may not be on our side, but we can
- invest in renewables like solar (still expensive) and wind (cheaper but very underutilized)
- change the car you drive for a smaller, more up to date, and more fuel efficient model (better yet, buy a hybrid if you can afford one)
- find somewhere else to live, preferably closer to work (or change jobs)
- start using public transport, and share transport to common destinations
- think carefully about financial investments, especially purchases of property, and look to gold when oil prices begin to break loose (actual gold, not stocks)
- support local markets, like food stalletjies (not supermarkets, who get their products from very far away), from grocers to engine makers – soon we’ll have only them to rely on
- plant a vegetable garden in your back garden
- save energy and encourage those around you to do the same
But don’t take my word for it; there are plenty of experts who will tell you the same thing. Colin Cambell5 is one, Mathew Simmons (founder and Chairman of the world's largest energy investment banking company, Simmons & Co), Kenneth S. Deffeyes and numerous other writers. One of the most eloquent is an American writer, James Howard Kunstler, author of The Long Emergency: Surviving the Converging Catastrophes of the 21st Century. In this book he provides, in a succinct tone and somewhat euphemistically, an elaborate near future scenario. He also discusses the various alternatives, and explains why almost all can be dismissed as ‘too little, too late’.
Here’s a last word, from James Howard Kunstler:
Remember: These immensely hypertrophic organisms like Wal-Mart are products of the special economic growth of the late 20th century, namely an unusually long period of relative world peace and extraordinarily cheap energy. If you remove those two elements, all large-scale enterprises --corporate farming, big-box shopping, big government, professional sports -- are going to be in trouble. – James Howard Kunstler
Sources
Business Report: SA car prices compare favourably September 27, 2005By Justin Barnes, Raphael Kaplinsky and Mike Morris
http://www.busrep.co.za/index.php?fArticleId=2891837
"M. King Hubbert is best known in the greater earth-science community for having predicted oil shortage (in the USA) some twenty years before it actually occurred. He is well known in hydrogeology for his contributions to the hydrodynamics of groundwater and the application of hydrodynamics to the exploration for petroleum…His most famous predictive analysis was published in 1956. In it, he indicated that our (the USA’s) conventional crude-oil production would go over the top of a great curve in 1970 and start down..."
from: http://www.hubbertpeak.com/hubbert/
The World Is Flat: A Brief History of the Twenty-first Century Thomas L. Friedman, p.407Farrar, Straus & Giroux, Hardcover, 496 pages, April 2005
After being awarded a Ph.D at Oxford in 1957, Dr Campbell joined the oil industry as an exploration geologist. His career took him to Borneo, Trinidad, Colombia, Australia, Papua New Guinea, the USA, Ecuador, United Kingdom, Ireland, and Norway. He is now a Trustee of the Oil Depletion Analysis Centre ("ODAC"), a charitable organisation in London that is dedicated to researching the date and impact of the peak and decline of world oil production due to resource constraints, and raising awareness of the serious consequences. He has published extensively, and his recent articles have stimulated lively debate. His views are provocative yet carry the weight of a wide international experience. (Source: http://www.oilcrisis.com/campbell/)
http://www.washingtonmonthly.com/features/2005/0506.drum.html
http://www.foe.co.uk/resource/press_releases/shell_overstates_sakhalin_29112004.html
http://www.dieoff.org/, http://www.lifeaftertheoilcrash.net/, http://www.peakoil.org/,http:/www.hubbertpeak.com/, http://www.kunstler.com/
Further reading: The Long Emergency: Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes of the Twenty-first Century (Hardcover) by James Howard Kunstler "Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality...", Hubbert's Peak: The Impending World Oil Shortage (Hardcover)by Kenneth S. Deffeyes "Global oil production will probably reach a peak sometime during this decade..." and Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy by Matthew R. Simmons
www.kunstler.com
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