Fifty years ago today, Shell petroleum geologist M. King Hubbert gave a speech in which he predicted that oil production for both Texas and the United States would peak between 1966 and 1971. He was correct: in 1971, the United States produced more oil than it ever had or ever will again.
In the decade following the U.S. peak, control of the world's oil markets shifted definitively from the west to OPEC, with highly disruptive economic and geopolitical results, even as oil prices, in real dollars, soared to nearly 20 times what they had been by the end of the decade. But the world still had abundant oil. By the early 1980s, the U.K. and Norway had begun to produce oil from the North Sea, several nuclear power plants came on line, and the U.S. and other countries began shifting to natural gas for home heating and electrical generation. Oil prices fell, and the problem was forgotten.
Hubbert linearization now predicts a peak in world oil production in this decade. By definition, a peak in world production means that there are no more producers of last resort, a conclusion borne out by the fact that no new Saudi Arabias or North Seas have been discovered in decades. In the west, few nuclear plants have been built in 20 years, and natural gas is in serious decline. Not counting hydroelectric power (which cannot be substantially expanded), all renewable energy sources together today count for less than five percent of world energy production. Biofuels may or may not even be energy positive when fossil fuel inputs are considered (natural gas fertilizers, diesel-powered farming equipment) and are not, strictly speaking, renewable as long as any artificial fertilizers are required to grow the feedstock crops. Solar and wind power produce electricity, not liquid fuel. When world oil supplies begin to decline, there will be no easy substations.
At the risk of repetition, this is what peak oil means: after world oil production peaks, there will, each year, be less and less oil produced—perhaps 2 percent a year, but possibly 8 to 10 percent. Oil is the backbone of advanced industrial societies—the key element that holds the structure together. An increasing number of highly credible experts (petroleum engineers, energy investment bankers, noted physicists) believe that the peak is now, or will come within the next 2 to 5 years. Barring a sudden, massive societal shift to alternative energy or a different lifestyle, the world is about to experience an economic and social catastrophe unlike any other in history, followed by a reversion to some kind of pre-industrial life. Given the amount of energy used to simply produce and transport food, a depression of this scale implies mass hunger and starvation.
Peak oil theorists are today dismissed for being too pessimistic, or of failing to understand the power of free markets. But given the prior accuracy of Hubbert’s predictions and the terrible costs of miscalculation, isn’t a little alarmism worth the risk?
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