Steep Decline in Oil Production Brings Risk of War and Unrest, Says New Study

"Oil"

10/25/2007

By Ashley Seager
The Guardian UK
Monday 22 October 2007


Output peaked in 2006 and will fall seven percent a year. Decline in gas, coal and uranium also predicted.

World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown.

The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in 2006 - much earlier than most experts had expected. The report, which predicts that production will now fall by 7% a year, comes after oil prices set new records almost every day last week, on Friday hitting more than $90 (£44) a barrel.

"The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy," said Hans-Josef Fell, EWG's founder and the German MP behind the country's successful support system for renewable energy.

The report's author, Joerg Schindler, said its most alarming finding was the steep decline in oil production after its peak, which he says is now behind us.

The results are in contrast to projections from the International Energy Agency, which says there is little reason to worry about oil supplies at the moment.

However, the EWG study relies more on actual oil production data which, it says, are more reliable than estimates of reserves still in the ground. The group says official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years' supply at current consumption rates. But it thinks the figure is only about two thirds of that.

Global oil production is currently about 81m barrels a day - EWG expects that to fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium production as those energy sources are used up.

Britain's oil production peaked in 1999 and has already dropped by half to about 1.6 million barrels a day.

The report presents a bleak view of the future unless a radically different approach is adopted. It quotes the British energy economist David Fleming as saying: "Anticipated supply shortages could lead easily to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society."

Mr Schindler comes to a similar conclusion. "The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life."

Jeremy Leggett, one of Britain's leading environmentalists and the author of Half Gone, a book about "peak oil" - defined as the moment when maximum production is reached, said that both the UK government and the energy industry were in "institutionalised denial" and that action should have been taken sooner.

"When I was an adviser to government, I proposed that we set up a taskforce to look at how fast the UK could mobilise alternative energy technologies in extremis, come the peak," he said. "Other industry advisers supported that. But the government prefers to sleep on without even doing a contingency study. For those of us who know that premature peak oil is a clear and present danger, it is impossible to understand such complacency."

Mr Fell said that the world had to move quickly towards the massive deployment of renewable energy and to a dramatic increase in energy efficiency, both as a way to combat climate change and to ensure that the lights stayed on. "If we did all this we may not have an energy crisis."

He accused the British government of hypocrisy. "Tony Blair and Gordon Brown have talked a lot about climate change but have not brought in proper policies to drive up the use of renewables," he said. "This is why they are left talking about nuclear and carbon capture and storage. "

Yesterday, a spokesman for the Department of Business and Enterprise said: "Over the next few years global oil production and refining capacity is expected to increase faster than demand. The world's oil resources are sufficient to sustain economic growth for the foreseeable future. The challenge will be to bring these resources to market in a way that ensures sustainable, timely, reliable and affordable supplies of energy."

The German policy, which guarantees above-market payments to producers of renewable power, is being adopted in many countries - but not Britain, where renewables generate about 4% of the country's electricity and 2% of its overall energy needs.



Peak Universe
By James Howard Kunstler
The Energy Bulletin
Monday 22 Oct 2007


The big Peak Oil conference of the year took place in Houston last week - but before we get to the substance of that, a few words about where we were. It is hard to imagine a more horrifying urban construct than this anti-city in the malarial swamps just off the Gulf of Mexico. And it is hard to conceive of a more desolate and depressing urban district, even of such an anti-city, than the utter wasteland around Houston's convention center.

Luckily, we didn't have to enter the convention center itself across the street - a baleful megastructure the size of three aircraft carriers, adorned with massive air-conditioning ducts to counter Houston's gym-sock-like climate. And when I say "street" you understand we are talking about four or six-laners, with no curbside parking, which is the norm for this town. The effect is that every street behaves like an extension of the freeway at the expense of pedestrians - but pedestrians have been eliminated anyway because in ninety percent of Houston's so-called downtown of glass towers there are no shops or restaurants at the ground-floor level, only blank walls, air-conditioning vents, parking ramps, and landscaping fantasias. We were informed that in parts of downtown there existed a network of air-conditioned underground corridors with shopping, but that everything in it closed at 7 p.m. when the last office workers straggled home. Anyway, none of it extended as far as the convention center. The rest of district was devoted to surface parking.

It has often been stated that Houston's ghastly development pattern comes from having no official zoning laws. But all it really proves is that you can achieve the same miserable results of typical American boneheaded zoning with no zoning - as long as your don't give a #### how people feel in their daily environments.

The convention center itself, though, demonstrated something beyond even that degree of thoughtlessness. Its pharaonic hugeness was a metaphor for the fatal grandiosity at the heart of contemporary life in American today, the utter disregard for a scale of human activity consistent with what the planet has to offer within its ecological limits - and of course the oil issue was at the center of that story.

Oh, one final thing about Houston life per se. Judging by the local items in the daily newspaper, the so-called city enjoys a level of mayhem that makes Baghdad look like a Sussex garden party. Sample headlines: "10 Charged in Burglary Spree," "Pit Bull Shot Dead After Pony Attack," "Jury Gives Man Life in Carjacking Death," "Two Killed in Home Invasion." One particularly insane story told of a man who shot and stabbed a visiting friend who "dissed" his dog. We didn't see any of that action around the convention center's Hilton Americas, where the ASPO conference actually took place, but the news didn't exactly make you want to venture out beyond the lobby. Anyway, you couldn't buy a stick of gum within a mile walk of the place, and the thought of traipsing past all those surface parking lots in 90-degree heat was like an invitation to reenact the Bataan Death March.

It was a sublime coincidence of fate and history that throughout the ASPO conference, the price of a barrel of oil surged up through the high eighty-dollars range and briefly touched $90-a-barrel on Friday (just as the stock market was tanking by 360-odd points). It was also interesting that as all this action was unfolding, MSNBC was running an interview with Senator Larry Craig (R. Idaho), lately accused of soliciting sex from a policeman in an airport toilet. Apparently what the nation really wants to know about is the Senator's self-described "wide stance" in bathroom technique. Perhaps when Craig is finally forced from his senate seat, he can get a job as a "personal toilet coach," and become the pioneer in a whole new realm of self-improvement science, teaching others how to assume the manly "wide stance" and become more effective leaders.

So, while the price of oil ratcheted up hour by hour, the ASPO conference members heard from an impressive range of experts who have been leading the public conversation on the Peak Oil story - with no help from the mainstream media or the political sector. Among them were Robert Hirsch, co-author of the now-famous 2005 Hirsch Report, commissioned by the US Department of Energy, which, much to the consternation of its sponsor, first told the nation in no uncertain terms that it was heading for a catastrophic set of disruptions in "normal" American life if we heedlessly continued energy business-as-usual. Hirsch went a little further now, two years on, than he had in his famous report, predicting a future of "oil export withholding," panicked markets, and allocation disturbances that would make the 1973 OPEC embargo look like a golden age.

Matt Simmons, the leading investment banker to the oil industry, who has worked tirelessly to lift public awareness of Peak Oil, also raised the specter of shortages, telling the audience that market allocation problems in the near future would almost certainly induce "hoarding behavior" among the public that would cripple the economy, lead to enforced rationing, and shock the nation. Simmons compared the current public mood over energy issues to a "fog of war." He also repeated his oft-stated opinion that the drilling rigs and other equipment used around the world to pump oil out of the ground are so uniformly old and decrepit that they pose a problem every bit as dire as peak oil itself. In the meantime, he said, to offset climbing prices, the developed nations have lately dipped so deeply into their accumulated stocks of crude and "refined product" that some countries may breach what is called their "minimum operating levels." Offstage, he told me, "We're too preoccupied trying to figure out the exact date of the peak. Meanwhile, we'll drain the gasoline pool and it will be gone forever."

The other most significant contribution came from Texas geologist Jeffrey Brown who presented a full-blown version of his theory that world export rates from the countries with oil to sell are liable to decline so much more sharply than their actual production decline rates that the world would be thrust into an oil export crisis within the next five years - and that this export crisis would turn out to be the defining condition of the Peak Oil story.

There were plenty of other fruitful contributions on subjects ranging from the future of the airline industry to reviving passenger rail service, to the question of nuclear power. And there was one real clunker presentation by a shill from the Toyota corporation, designed to blow green smoke up the audience's ass about the future of happy motoring (Toyota's products will save it from Peak Oil).

For coverage of the particulars, visit TheOilDrum.com, the nation's best energy discussion website.

If there were reporters from the mainstream media present at this event, I didn't run into of them. They are apparently uninterested in the fate of industrial economies, at least as long as Senator Larry Craig is out there on the frontiers of toilet coaching science, and Britney Spears is still sparring with K-Fed, and Diddy is beating people up in nightclubs, and people are murdering their friends for dissing their dogs.