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Jeremy Leggett, a former faculty member of the Royal School of Mines, London, said in his 2005 book The Empty Tank: Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe,303 that he believed that a change to a renewable energy infrastructure was possible, given the political wil , but “the shortfall between current expectation of oil supply and actual availability will be such that neither gas, nor renewables, nor liquids from gas and coal, nor nuclear, nor any combinations thereof, will be able to plug the gap in time to head off the economic trauma resulting from the oil tipping point.”304
Consequently, economic col apse looms:
The price of houses will col apse. Stock markets will crash. Within a short period, human wealth—little more than a pile of paper at the best of times, even with confidence about the future high among traders—will shrivel. The inescapable consequences of the crisis will then roll out in slow motion. Companies will go bankrupt by the hundreds and then thousands. Workers will 302 Michael C. Ruppert, Confronting Col apse: The Crisis of Energy and Money in a Post Peak Oil World, (Chelsea Green Publishing, White River Junction, Vermont, 2009), p. 13.
303 Jeremy Leggett, The Empty Tank: Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe, (Random House, New York, 2005).
304 As above, pp. 141-142.
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fall into unemployment by the hundreds of thousands and then millions. Once affluent cities with street cafes will have queues at soup kitchens and armies of beggars on the streets. The crime rate will soar. The Earth has always been a dangerous place, but now it will become a tinderbox.305
This position can be contrasted with that of Matt Ridley in The Rational Optimist,306 who dismisses such fears and expresses (with little evidence and argument) a common optimistic view about humanity’s energy future: “Oil, coal and gas are finite. But between them they will last decades, perhaps centuries, and people will find alternatives long before they run out.”307 Such claims – that technology will save humanity just in time, and that substitutes for depleting resources will always be found—are not rational y justified claims—and are undermined by the unsolved problem of induction.308
To explain: technology may have solved our problems in the past, but how can that supply a non-circular justification for believing that it will do so in the future? Substitutes have been found for many depleted resources so far, but that is no basis for believing that substitutes will always be found: our “luck” may run out. Further, it takes at least 30 years to change an energy infrastructure; society cannot be rebuilt overnight, especial y our trucking infrastructure.309
The issue of peak oil has been debated for almost 20 years and has generated its own technical books, articles and websites.310 The argument for peak oil has been summarized as follows: 305 As above, p. 191.
306 Matt Ridley, The Rational Optimist: How Prosperity Evolves, (Fourth Estate, London, 2010).
307 As above, p. 238.
308 On the unsolved problem of induction see: “The Problem of Induction,” at http://www.
princeton.edu/~grosen/puc/phi203/induction.html.
309 Alice Friedemann, When the Trucks Stop Running: Energy and the Future of Transport, (Springer, New York, 2016).
310 J. Murray and D. King, “Oil’s Tipping Point has Passed,” Nature, vol. 481, 2012, pp.
433-435; Ugo Bardi, Extracted: How the Quest for Mineral Wealth is Plundering the Planet, (Chelsea Green Publishing, White River Junction, 2014).
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• “The peak of oil discoveries was reached in the 1960’s.
• This peak in discoveries has to be followed by a peak in production, since we can only produce what has been found before.
• The production peak of individual fields is a historical fact [and]
almost all large oil fields have already passed their production maximum and are in decline.
• The aggregation of the production profiles of individual fields (with their individual peaks) sums up to a production peak of individual oil regions. Historical y, peak production was reached in Austria in 1955, in Germany in 1968, and in the USA in 1971, and in Indonesia in 1977. Recent regions joining the club of countries with declining production rates are Gabon (1997), UK
(1999), Australia (2000), Oman (2000) and Norway (2001).
• The aggregate decline of mature regions is getting steeper with every “new member of the club.” In order to keep over-all production just flat, ever fewer regions have to increase their production.
• This pattern [has been observed for] more than thirty years.”311
Owen (et al.), have said that they support “the contention held by many independent institutions that conventional oil production may soon go into decline… and it is likely that the era of plentiful, low cost petroleum is coming to an end.”312 Further: “[r]eserves that provide liquid fuels today will only have the capacity to service just over half of bau (business as usual) demand by 2023.”313
Although the International Energy Agency (iea) sees the peak of world oil production as some time off, Aleklett (et al.) reanalysed iea data and concluded that peak oil occurred in 2008.314 To repeat: this 311 W. Zittel and J. Schindler, “Future World Oil Supply,” L-B System tecnik, January 2003, at http://www.peakoil.net/files/International-Summer-School_Salzburg_2002.pdf, quoted from R. Heinberg, Powerdown, cited above.
312 N. Owen (et. al.), “The Status of Conventional World Oil Reserves - Hype or Cause for Concern?” Energy Policy, vol. 38, 2010, pp. 4743-4749, cited p. 4743.
313 As above, p. 4749.
314 K. Aleklett (et. al.), “The Peak of the Oil Age: Analysing the World Oil Production 122
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follows from iea’s own data. Indeed, the International Energy Agency in its World Energy Outlook (weo) (2010), said that by 2035 global oil production “reaches 96 mb/d, the balance of 3 mb/d coming from processing gains.” Crude oil output “reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70
mb/d reached in 2006, while production of natural gas liquids (ngls) and unconventional oil grows strongly.”315
Unconventional oil has been said to be generating what Alan Kohler enthusiastical y describes as a “new global oil rush” and to have led to the “death of peak oil.”316 Matt Ridley has proclaimed that when the shale revolution goes “global,” “oil and gas in tight rock formations will give the world ample supplies of hydrocarbons for decades, if not centuries.” Ever the “rational optimist.”317 However, some establishment sources are not as optimistic. Brian Walsh in his April 9, 2012, Time magazine article “The Truth about Oil,”318 says that new technological breakthroughs are increasing global supplies but “the era of cheap oil may be gone forever.” Unconventional oil includes pre-salt and deep-water (50-100 billion barrels), oil shale (800 billion barrels) and oil sands (169 billion barrels). However, these sources “are often dirtier, with higher risks of accidents. The decline of major conventional oil fields and the rise in demand mean the spare production capacity that once cushioned prices could be gone, ushering in an era of volatile market swings. And burning all this leftover oil could lock the world into dangerous climate change.”
Energy researcher Jean Laherrére believes that the deep-water oil reserve figures are too optimistic and that most discoveries will Reference Scenario in World Energy Outlook 2008,” Energy Policy, vol. 38, no. 3, 2010, pp.
1398-1414.
315 International Energy Agency, “Executive Summary,” World Energy Outlook 2010, (OECD/IEA, Paris, 2010), p. 6.
316 Alan Kohler, “The Death of Peak Oil,” March 28, 2012, at http://www.businessspectator.
com.au/article/2012/2/29/commodities/death-peak-oil.
317 Matt Ridley, “Fossil Fuels are Here to Stay,” The Australian, March 24, 2015, p. 11.
318 Brian Walsh, “The Truth about Oil,” Time, April 9, 2012; A. B.
Lovins, “A Farewell to Fossil Fuels,” Foreign Affairs, vol. 91, 2012, pp. 134-136.
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be made before 2025.319 The US Legislative Peak Oil and Natural Gas Caucus concluded that “oil shale cannot compensate in a timely way for loss of conventional oil production and cannot meet sustainable productions at a rate that will offset high oil prices.”320 On the subject of shale oil, or organic marlstone, the Caucus concluded: The US contains massive amounts of oil shale but it is a low grade material with about the equivalent energy proud for pound of a baked potato. Regardless of its low eroei [Energy Returned on Energy Invested] oil shale production appears to be feasible at some scale. That scale, however, appears not to be significant enough to alter oil supply trends in coming years. It is clear that limiting factors such as water, safe deposits of spent process material and other issues remain unanswered.321
The comprehensive assessment of the sustainability of unconventional oil given by Kjell Aleklett in Peeking at Peak Oil 322 agrees with the Caucus conclusion cited above: “Oil production from oil shale is insignificant.” And: “There is nothing to indicate that the United States will become self-sufficient in oil production or even become an oil exporter despite enthusiastic reportage in the news media.” For example, the average Bakken well makes use of horizontal drilling to get to the layer of rock containing the oil that does not flow and then fracturing or “fracking,” involving pumping down a chemical mixture at high pressure to allow the oil to be pumped out. There has been observed to be a rapid decline in oil output from shale oil drilling in Montana, part of the Bakken Field and at the Eagle Ford play in Texas; of the 16 wel s completed between December 2005 and November 2009, only seven remain productive, and US officials have 319 http://www.theoildrum.com/node/9169.
320 US Legislative Peak Oil and Natural Gas Caucus, Peak Oil Production and Implications to the State of Connecticut: Report to the Legislative Leaders and the Governor. Addendum: Tar Sands and Shale Oil, (December, 2007), at http://www.housedems.ct.gov/backer/pubs/
TSandOSfina.pdf.
321 As above, p. 13.
322 Kjell Aleklett (with Michael Lardelli), Peeking at Peak Oil, (Springer, New York, 2012).
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reduced by 96 percent the estimated recoverable oil from California’s Monterey shale deposits.323
Michael Klare has pointed out that there are environmental limits to shale oil mining as wel .324 Hydraulic fracturing uses millions of liters of water and creates a problem of disposal of toxic water, which can contaminate other water resources. These vast quantities of water may not be available because of droughts, arguably due to climate change. In July 2012 in Pennsylvania, some drillers suspended operations after the Susquehanna River Basin Commission suspended permits for water withdrawals from the Susquehanna River. According to Chris Faulkner, the president and ceo of Breitling Oil and Gas: “Without water, drilling shale gas and oil wel s is not possible. A continuing drought could cause our domestic production to decline and derail our road to energy independence in a hurry.”
Deep-water dril s are another example of “extreme oil” and dangers of large-scale mishaps are always present. The 2010 bp Deep-water Horizon disaster in the Gulf of Mexico is an example, but Shell Oil’s drilling in the Alaskan Artic was suspended until 2013 (and plans resumed in 2015), due to a series of accidents. In any case, total oil production from all existing deep-water wel s by 2020 is thought to be 8.4 mb/d and as Aleklett puts it “not even 10% of the necessary increase can be provided by production from deep water.”325 Aleklett concludes: “[d]eep water is the last output of global oil production.
The production journey that began in the United States and Russia in the 1850s has now reached the end of the road.”326
323 https://www.forbes.com/sites/arthurberman/2017/03/01/the-beginning-of-the-end-for-the-bakken-shale-play/#69096dde1487; https://energypost.eu/bakken-shows-us-tight-oil-production-limits/.
324 Michael Klare, “The New ‘Golden Age’ of Oil that Wasn’t: Extreme Oil Means an Extreme Planet,” October 5, 2012 at http://www.carolynbaker.net/2012/10/05/the-new-golden-age-of-oil-that-wasnt-extreme-energy-means-an-extreme-planetby-michael-klare.
325 Aleklett, as above, p. 165.
326 As above. On the limitations of supply of Canadian Oil Sands see B. Söderbergh (et al.),
“A Crash Programme Scenario for the Canadian Oil Sands Industry,” Energy Policy, vol.35, 2007, pp.1931-1947.
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Proponents of the peak oil hypothesis are allegedly in “disgrace,”
according to Steven F. Hayward, visiting professor at Pepperdine University’s Graduate School of Public Policy, Los Angeles, as all “of the recent projections forecast that the age of hydrocarbon dominance (including coal) will last several decades longer than previously thought.”327 This in itself is an admittance that peak energy will eventual y be reached, albeit “several decades longer than previously thought.” However, as J. David Hughes points out, the Energy Information Administration (eia) sees US domestic crude oil production, including “tight oil (shale oil), peaking at 7.5
million barrels per day in 2019/2020.” By 2040, the percentage of US domestical y produced crude oil of total US crude oil used wil be only 32 percent, lower than today’s share of 34 percent.328 Thus, the idea of a century of US energy independence, based on in situ unconventional oil resources, is a myth. Hughes summarizes:
“although resources such as oil shale, gas hydrates, and in situ coal gasification have very large in situ potential, they have been produced at only miniscule rates if at al , despite major expenditures over many years on pilot projects. Tar sands similarly have immense in situ resources, but more than four decades of very large capital inputs and col ateral environmental impacts have yielded production of less than two percent of world oil requirements.”329
Shale gas wel s, for example, have a high rate of production decline
– conventional gas wel s usual y decline by 25-40 percent in the first year of production, whereas shale wel s decline by 63-85 percent, and then require re-fracking, hence generating the need to drill faster and faster.
Richard Heinberg in Snake Oil: How Fracking’s False Promise of Plenty Imperils Our Future, reaches this conclusion on unconventional oil: “Rather than a century of plenty, we face the 327 Steven F. Hayward, “Obama’s Carbon War Running Out of Gas,” The Australian, June 3, 2013, p. 7.
328 J. David Hughes, Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance? (Post Carbon Institute, Santa Rosa, February, 2013), at http://www.
postcarbon.org/drill-baby-drill/.
329 As above, p. i.
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likely recommencement of declines in US oil and gas production before 2020. We’ve purchased a few years of respite from the relentless and inevitable erosion of our nation’s oil and gas production rates, but at what cost?”330
The US shale oil boom had also had a question mark placed over it by the recent instability of oil prices. The world oil market is artificial, not economical y free, with supply regulated by the Organization of Petroleum Exporting Countries. The Saudis have not reduced supply, as they have done in 1977, 1985, 1991 and 2008. Some speculate that this is an attempt to slow down the US’s unconventional oil industry; others, that it is a strategy to visit economic pain on regimes that the Saudis are in conflict with such as Iran and Russia (an al y of Syria’s Bashar al-Assad), or maybe both. In any case, the instability of oil prices has nothing to do with any vast new oil reserves suddenly being discovered in Saudi Arabia and everything to do with geopolitics.
The frantic scramble to secure what is left of declining world oil resources, Michael Klare has argued, raises the likelihood of resource wars through the 21st century—if nation states even survive the threat of peak energy.331 China is already drivin
g up global oil prices with its consumption rising by 0.5 m/bpd each year—this being 9.2 m/bdp in a world market of 90 m/bpd. David Greely, “oil guru” of Goldman Sachs has said: “It is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand.”332
Other energy resources are fast approaching their peak. In 2006, the Energy Watch Group predicted that the peak of world uranium 330 Richard Heinberg, Snake Oil: How Fracking’s False Promise of Plenty Imperils Our Future (Post Carbon Institute, Santa Rosa, 2013), p. 79.
331 M. Klare, The Race for What’s Left: The Global Scramble for the World’s Last Resources, (Metropolitan Books, New York, 2012); M. Klare, “Oil Wars on the Horizon,” Counterpunch, May 10, 2012, at http://www.counterpunch.org/2012/05/10/oil-wars-on-the-horizon/.
332 Ambrose Evan-Pritchard, “Peak Cheap Oil is an Incontrovertible Fact,” August 26, 2012
at http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9500667/Peak-cheap-oil-is-an-incontrovertible-fact.html.
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production would occur in 2040,333 but there are more pessimistic predictions of peak uranium such as 2016, that the peak has already been reached. Even coal reserves are depleting faster than previously thought, with one study concluding that the peak occurred in 2011,334
and other studies putting peak coal at 2026.335 Peak coal will lead to the
“blackout” of industrial society as Richard Heinberg predicts: Grid failure becomes the norm; lights are on only occasional y and electricity is strictly rationed. Communication networks are drastical y reduced in scope and are continual y strained.
Industrial activity contracts and gradual y disappears.336
Both Richard Heinberg337 and Ted Trainer338 have put the case that no combination of alternative energy options would enable the consumer society to continue on a business-as-usual basis, let alone grow exponential y. Further, many conventional economists, who reject the peak oil hypothesis, also believe that alternative energy resources will not fuel our bubbling global consumer society. For example, wind turbines face a “ballooning cost” compared to the cheapest fossil fuel.339