Peak Oil

Watching the oil prices go up, up, up, is fascinating. Commentators keep arguing about whether this is because of producers playing the market, speculators playing the market, pipeline sabotage, oil workers threatening to strike, etc, etc. Amazingly enough, for business folks who usually talk mostly about supply and demand, few articles are talking about the oil supply and demand.

But a number of writers--many of them geologists, financiers, and journalists--have started discussing something called Peak Oil. (Some books about this include: Kenneth Deffeyes, Beyond Oil; Colin Campbell, The Coming Oil Crisis; Jeremy Leggett, Half Gone; Matthew Simmons, Twilight in the Desert; Dale Allen Pfeiffer, The End of the Oil Age; Richard Heinberg, The Party's Over; Paul Roberts, The End of Oil; and James Kunstler, The Long Emergency.) The gist of Peak Oil theory is a prediction (first made by a geologist working for Shell Oil, M King Hubbert, in 1969) that the peak production of oil would occur around the millenium. (Hubbert apparently thought it would occur around 1995-2000, Deffeyes claims it happened at the end of 2005, and the Association for the Study of Peak Oil and Gas is guessing it will occur in 2010. Even the wildest oil optimists--for example the US Energy Information Administration spokesperson quoted in Roberts, The End of Oil--forecast an oil production peak of 2035.) Regardless of the actual date involved, the point is not that we are running out of oil (the peak is the halfway point) but that oil production can't be sustained at the rate it's happening now. Moreover, once we've reached the peak, the decline may be fairly rapid.

For one thing, the oil we've been using is the oil that's easy to get--it's going to take more and more energy to get the oil and at some point it isn't going to be worth it. More importantly, the demand (especially with developing countries such as China and India using more and more energy) appears to be increasing even as the supply may be diminishing. That's the supply and demand that I think may be responsible for the surging oil prices. Even with the increase in oil prices, the demand (worldwide) is increasing with it.

What does all this have to do with social change? Industrial society runs on oil. Our cars, buses, trucks, trains, and airplanes all depend on oil. Almost everything that's made of plastic is made from oil. Most of our medicines are made from oil. And our food is brought to us by trucks running on oil--and, depending on where you live, that could be a lot of oil.

Radical writers are always talking about how to dismantle the system, how to smash the state, destroy corporate capitalism. I saw a bumper sticker in 1991 that said 'Visualize Industrial Collapse'. I couldn't do it then. I can now. What if rather than dismantling capitalism, it collapsed on its own? Especially if oil isn't the only thing that's reaching its peak...

More next post...


Quote of the day: "Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist." - Kenneth Boulding
Word (or phrase) of the day: Parecon
Hero(es) of the day: Aung San Suu Kyi