The importance of oil
Oil is worth billions of dollars a year in the global economy. It forms the basis of everything we do: Fuel for our transport; energy for our homes; plastics; and an ingredient for the production of fertilisers which allow us to grow food to eat. The global dependence on oil is quite scary when one considers that oil production is declining, new oil fields are rarer and global populations are growing at a considerable rate.
What is peak oil?
Oil is a finite resource. It takes millions of years to form and is currently being extracted at a rate higher than that of new oil that is being found. Peak oil is the term used to describe the point when the amount of oil produced globally begins to fall. After peak oil is reached, the amount of oil left for human use permanently falls. The peak of production is normally passed when approximately half the total has been taken, termed the midpoint of depletion [1]. It is important to emphasise that peak oil is not about when we run out of oil but, rather, when the production of cheap oil starts to decline [2]. It is the decline of cheap oil which could cause global tensions, the collapse of economies, a decline in food production, and a complete change in the way the world is run.
When will peak oil be reached?
The amount of new oil discovered each year has been declining for some while [3]. This means that the gap between the discovery and production of oil continues to increase. According to a global oil supply report presented by the Energy Watch Group at the Foreign Press Association in London in October 2007, world oil production peaked in 2006 [4]. However, there are conflicting ideas about when peak oil has happened or will happen. London’s Oil Depletion Analysis Centre, has warned that the global production of all oil will peak by 2011 before starting to slide steeply [5]. Others such as members of oil companies will say that there are three or four decades left until the milestone of peak oil is reached. With so much conflicting information is it hard who to believe. What is certain is that oil is on the decline, increasing population growth will add to the demand on oil and so the price per barrel will dramatically rise in our lifetimes.
The future of oil
China is increasing its use of oil by 15% a year and India’s consumption is booming [6]. Falling supply will not be able to match rapidly increasing demand [5]. The world will need to find new sources of oil if it is to continue with its heavy dependence. One area which has potential for oil to be recovered is oil and tar sands. However, the oil has to be separated from the sand and this is a highly expensive and energy intensive operation. The International Energy Agency (IEA) expects oil produced from non-conventional sources, such as Canada’s oil sands, to play a decisive role in keeping up levels of output [3].
Where oil reservoirs are almost empty, like in the North Sea, there is the potential to fill the reservoirs with excess carbon dioxide. Excess carbon dioxide could be pumped into oil reservoirs that are on their last legs so that gas forces out the final dregs of the oil [7]. This is called enhanced recovery, but again is extremely expensive.
The price of oil fluctuates, depending on conflict, natural events and recession but, in due course, it will rise remorselessly [6]. It is up to us as consumers to try to reduce our dependency on oil. We must embrace new technologies, endeavour to reduce our carbon footprint and try to live a more simple life – which is easier said than done! Reducing our dependency on oil is vital to conserve existing supplies and to prepare us for a less oil rich future.
Want to know more?
If you would like to know more about peak oil, statistics, timelines and the implications for the global economy, check out these websites:
References
[1] Association for the Study of Peak Oil and Gas (2010) About Peak Oil. http://www.peakoil.net/about-peak-oil
[2] Wolf at the Door (2010) Introduction. http://www.wolfatthedoor.org.uk/
[3] Giddens, A. (2009) The Politics of Climate Change. Polity Press.
[4] Jackson, F. (2009) Conquering Carbon: Carbon Emissions, Carbon Markets and the Consumer. New Holland Publishers (UK) Ltd.
[5] McGuire, B. (2008) Seven Years to Save the Planet: the Questions…and the Answers. Weidenfield & Nicolson.
[6] Bruges, J. (2007) The Big Earth Book: Ideas and Solutions for a Planet in Crisis. Alistair Sawday Publishing.
[7] McGuire, B. (2005) Surviving Armageddon: Solutions for a Threatened Planet. Oxford University Press.
