Peak Oil - When?

According to A Crude Awakening the world may have already passed ‘peak oil’. 

This chart (like the next, from Wikipedia) shows various competing predictions of peak oil:

Critics of the Peak Oil argument point to the very large deposits remaining in tar sands and deep ocean deposits like those in the Gulf of Mexico and Timor Gap that were previously uneconomic and technically more difficult to extract. 

It can be seen that the most optimistic scenarios show peak oil disappearing off the chart.  These are based on the availability of oil from oil sands.  These reserves are believed to be very extensive.  But they’re also very expensive to extract and the process released additional carbon dioxide.  These will become increasingly profitable as the price rises and their exploitation may delay the ultimate depletion of oil, perhaps by decades.

They will do nothing to lower the cost of oil and indeed the conversion of coal to oil (discussed later) may be less expensive in money and resourced terms.

Petrol prices are going to rise. The current price (17 Feb 2008) is $ 95.69/Barrel and the one year futures forecast is for $124.40/Barrel (oil-price.net ) this compares with a low (1999 price) of just over $10. Based on the 1999 pump price, and in the absence of government intervention to keep prices low, petrol prices should already be approaching $7.00 a litre.

Although we will still have petrol, or a petrol substitute, for many years to come, the price will be much higher than it has been in the past.    And prices will continue to rise steadily until they reach the point at which sustainable energy becomes economic.

Impact of higher oil prices

As indicated above we are not about to run out of transport fuel anytime soon but over a third of total energy demand is for transport as shown in the following chart[3] and the price of the major source of this energy is  about to rise very substantially.  Some elements of our present transport intensive lifestyle are likely to become progressively untenable for people on average incomes.

But going back to a more 1950s transport style would not be the end of civilisation as we know it.

We will need some more ‘fast electric trains’ and even, perhaps, more trams and other mass transport. We might have to think about using ships and trains rather than planes for long distance travel.  Cities may need to become more compact to shorten journeys to work, and businesses may need to locate near to public transport.

Of course we are never going to return to the world of the 1950’s.  World population has more than doubled since then.  Women have jobs in the workforce.  Children go to pre-school. Retail is a centralised in shopping malls.  But some relatively minor changes to city planning could accommodate our city to lower car usage.  All new shopping malls could be required to locate over or near to railway stations, as many are now, with bus interchanges. 

New rail lines could be built to link existing large shopping malls and relatively dense communities.  Local resistance to new rail lines is likely to lose support.   The unfinished Bondi, Maroubra, Randwick loop and the long needed northern beaches rail line in particular, might at last be completed.  Other service industries could be encouraged to locate their businesses in and around the new rail station precincts.  Higher density residential precincts would be located within walking, or cycling, distance of railway stations. 

The overall prognosis is good.  People will walk and cycle more and children will be less often driven to school.  Roads will be less congested.  Pollution will be lower and the Blue Mountains will be blue again.  Lifestyles will be healthier and the production of carbon dioxide and other greenhouse gases will decline.

The higher petrol prices may come to the aid of town planners in other ways too.  Much of the sprawl of Sydney suburbia can only be serviced by car and many of these properties have almost as much real estate dedicated to cars as to human habitation.  The prices of these properties will fall relative to areas of attractive higher density housing that do not require and the constant use of motor vehicles. 

In the meantime the technology that gave us the first transistor in 1948 provided the integrated circuit in 1964 followed by the microchip microcomputer in the late 1970’s, has led to the www in the nineties, mobile phones and electronic commuting today. 

Today I can talk to somebody in the United States at the click of a button and at less cost than talking to somebody down the street.  It is not absolutely essential for me to leave home or travel to America to do much of my work.  I’m writing this by a speaking into a microphone and just correcting my text as I go with the keyboard and mouse.  In future most written text will be dictated like this. I can retrieve vast amounts of information from my desktop.

I can already use a web-camera (if I choose to) and microphone to talk face-to-face with people in other places in the world all from my chair at home.  I could, if I wished, publish this document as a blog available to everybody with a computer and an Internet connection.

In addition to electronic commuting technology has given us a biological revolution. Watson & Crick, using the results of Franklin, first decoded the structure of DNA in 1953 (when I was talking to steamroller men).  Progress in biology has been even more spectacular than that in electronics in the intervening period.  Not only is it possible to move genes from one species to another but we are close to creating life from its raw chemical constituents.  Biotechnology will define the 21st century and it is very possible that it will play a part in finding a replacement to oil.