Evolutionary psychology and peak oil:
A Malthusian inspired "heads up" for humanity.

  -- by
Dr. Michael E. Mills 

 

"Oil peaking will be catastrophic, beyond anything I have seen...
We are about to drive the car over the cliff and say, `Oh my God,
what have we done?'"

     -- Robert L. Hirsch, Ph.D.,  US Department of Energy consultant.

 

Overview.

I initially developed this webpage for my students, especially those in
my Ecological Psychology course.   The goal was to provide a succinct
overview peak oil, and "heads up" about the social and personal challenges
we will need to confront in the near future.

This web page is divided into the following topics, which will be explored
in turn: 
 
bulletEcological overshoot as a general problem in population biology.
bulletThe possibility of avoiding a human Mathusian collapse via
a Kurzweillian "techno-fix"
bulletPeak oil as a an example of human ecological overshoot.
bulletPossible economic and social scenarios following peak oil.
bulletContributions by psychological science, and evolutionary
psychology in particular, that may help to mitigate these problems.

 

Part 1: Ecological overshoot as a general problem in population biology.

Evolutionary scientists are aware of the concept of ecological "carrying capacity,"
and Malthus' application of these ideas to human populations.  Malthus wrote:
 

 
"It is an obvious truth, which has been taken notice of by many writers,  that population must always be kept down to the level of the means of subsistence; but no writer that the Author recollects has  inquired particularly into the means by which this level is effected..."
  -- Thomas Malthus, 1798

An Essay on the Principle of Population

 

 

Often, there is a cyclical relationship between the populations
of predators and their prey.  This keeps the populations of
both species in check.


Source: http://www.okc.cc.ok.us/biologylabs/Images/Homeostasis%20Images/lynx-hare.jpg

But, what happens when there are no predators?

This issue was addressed in a paper by David Klein,  
"The Introduction, Increase and Crash of Reindeer
on St. Matthew Island
."

Klein reported that in 1944, 29 reindeer were brought to
St. Matthew Island. Initially there were abundant food
sources, and the reindeer population increased dramatically.
There were no predators to cull the population.

About 20 years after they were first introduced, the reindeer
had overshot the food carrying capacity of the island, and
there was a sudden, massive die-off.  About 99% of the
reindeer died of starvation.

 

 

As shown in the graph below, this is an example of a general
phenomenon.  All species suffer population collapse or species
extinction if they overshoot and degrade the carrying capacity
of their ecology.

 

 

Population in a Petri dish
 

 


Source: http://321energy.com/editorials/petch/petch070505.html

 

With a geometric rate of growth, the end comes very quickly.

The last minutes in the petri dish.
11:54 a.m.
1/64 full (1.5%)
63/64 empty
11:55 a.m.
1/32 full (3%)
31/32 empty
11:56 a.m.
1/16 full (6%)
15/16 empty
11:57 a.m.
1/8  full (12%)
7/8   empty
11:58 a.m.
1/4  full (25%)
3/4   empty
11:59 a.m.
1/2  full (50%)
1/2   empty
12:00 noon
full (100%)
0% empty

 

Wine:  Population Growth and Decline of Yeast Cells in a 10% Sugar Solution

Below is another example of a population overshoot and collapse scenario.  
This is the population graph of yeast cells in a 10% sugar solution. 
Note that the yeast  population first explodes exponentially, and is then
followed by population die-off as the finite nutrients are exhausted
and their own waste products pollute their environment.

 

 

Source:  http://dieoff.org/page137.htm   Price, D. (1995). Energy and Human
Evolution.    Population and Environment: A Journal of Interdisciplinary
tudies, 16,
301-19. Growth of yeast in a 10% sugar solution (After Dieter, 1962:45). 
The fall  of the curve is slowed by cytolysis, which recycles nutrients from dead cells.
 

This is how yeast turns grape juice into wine.  The next time you
say “cheers” over  a glass of wine,  remember that you are drinking
the waste products (alcohol) of a collapsed yeast colony with poor
ecological management skills!

 

 

             

 

The primary question is this:
 

    Are humans smarter than yeast?
        -- Bob Shaw

 

That is, as a species, can we avoid population overshoot and environmental
pollution on our finite planet?

The fate of humans on Easter Island suggests, well, perhaps not. 

"All species expand as much as resources allow and
predators, parasites, and physical conditions permit.
When a species is introduced into a new habitat with
abundant resources that accumulated before its arrival,
the population expands rapidly until all the resources
are used up."
    
- David Price, Energy and Human Evolution
                        
http://dieoff.org/page137.htm

 

When the first humans arrived on the island, there were abundant
resources to support the small population.   The human population increased
dramatically. There were no predators to cull the population. The
population continued to grow until it eventually overshot
the island carrying capacity.

After overshoot, most of the population starved.  Apparently,
they even turned on each other, sometimes resorting to cannibalism.

 
For more information about carrying capacity and overshoot see:

Books:

Collapse by Jared Diamond

Overshoot: The Ecological Basis of Revolutionary Change by William Catton (1982)

Beyond Malthus: Nineteen Dimensions of the Population Challenge by Lester R. Brown, Gary Gardner, Brian Halweil (1999)

Online:

Energy Resources and Our Future - Speech by Hyman Rickover in 1957

Peak Oil, Carrying Capacity and Overshoot:  Population, the Elephant in the Room

Six steps to "getting" the global ecological crisis.

Was Malthus just off a few decades? by George Plumb 
 


 

Below are some examples of collapsed human societies, and the
possible causative factors.

Of course, the entire earth can also be viewed as an "island" with
some resources that are finite and that are being rapidly
depleted by a human population explosion.  
 

The human population explosion. 



Source:  http://dieoff.org/page137.htm

"The world is involved in a monumental resource battle as the
irresistible force of an exploding global population smashes into the
immovable object of finite resources."

   --
David McWilliams
 


Source:  http://www.oftwominds.com/blogmay08/mandate-heaven.html
 

The graphs above suggests that humans, like the reindeer, yeast, and
Easter Islanders, will eventually overshoot our planetary carrying
capacity,  and suffer the Malthusian consequences.
 

Imagine the world as a petri dish.

 

 

But... won't scientific advances and technology save us from ecological overshoot?

Raymond Kurzweil has argued in his book The Singularity is Near, that
scientific knowledge, like populations, grows geometrically too.
He believes this will allow us solve problems of ecological carrying capacity, cure
disease and aging, and solve the problem of energy depletion.
He is optimistic that technology will help us overcome population overshoot and collapse.
For example, computers will become increasingly powerful, as noted in
graph below of the historical and projected exponential growth of computing power.

 

 

With respect to energy, Kurzweil predicts in his article Expect Exponential Progress
that "the power we are generating from solar is doubling every two years; at that
rate, it will be able to meet all energy needs within 20 years."
 

Malthus vs. Kurzweil:  Countdown to the final human race of
the 21st Century.

It will be a race toward either paradise or oblivion,
right to the last moment.
   -- Buckminster Fuller

So, we have two opposing, exponentially increasing trends.  
One could lead to ecological overshoot and collapse; the other
could lead to scientific/technological solutions to these problems.

  Malthus vs. Kurzweil


 

Which will arrive first?    Ecological overshoot and collapse (Malthus), or
a "techno-fix"  (Kurzweil)? 

No one knows.

But, we probably won't have to wait long to find out.  One of these two scenarios will likely
occur within the next several decades.   But, which one?

Generally it is healthy to be optimistic. 

But optimism can be deadly if it produces a Pollyannaish denial of real problems.  
We should not ignore problems by assuming "someone else" will take care
of it, or that "the market" or "technological breakthroughs" will always come
to the rescue in time. 

Solutions may not come in time, and we may get a quite rude Malthusian
smack down later.  (In my opinion, should the internet go down due to
energy shortages, the Mathusian writing will be on the wall... )

To avoid this, we must solve the transition from our finite, depleting oil resources
to renewable energy.

Technological civilization runs on energy. 

 

Part 2: Peak oil as a an example of human ecological overshoot.

    "We know that we cannot sustain a future powered by a fuel that is rapidly disappearing.
       ...breaking our oil addiction is one of the greatest challenges our generation will ever face.
       ...This will not be easy."
           -- Barack Obama,  August 4, 2008
               http://my.barackobama.com/page/community/post/stateupdates/gG5zCW

One of the most critical finite energy resources are fossil fuels, which
provide a cheap, dense source of energy to power technological/industrial
civilization.

"Peak oil" is the point when 1/2 of extractable world oil has been extracted.

A related concept is "peak oil production,"  when oil production starts
an inexorable decline, causing oil prices to increase.   Here, the term "peak oil" will
refer to peak oil production.

The amount of oil produced by a particular oil field, or a region, shows a
regular pattern: first oil production increases, then it reaches a peak, and,
finally, as the oil field begins to dry up, oil production starts an
inexorable decline.

 

Source: http://www.theoildrum.com/node/3475

 

Source: http://www.theoildrum.com/node/4415#comments_top


This "bell curve" pattern of oil production, called the Hubbert curve,
is also true for world oil production as a whole.

 

 

Below, the countries in red are already past their oil production peak;
those in green have yet to pass peak (but most will in the next 5 or 10
years).  

 

(Source:  http://www.davidstrahan.com/map.html To see an interactive atlas the
above graphic, click here.)

 

Source:  http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_Oilreport_Summary_10-2007.pdf

 

Global rates of discovery of new oil fields has been on a terminal
decline since 1964.

 

Source:  ASPO
 

 

The graphs below suggest that we may be on a "bumpy plateau" for a while before we
start down the inexorable down slope of the bell shaped Hubbert curve.
 

 

Source: TheOilDrum.com

 

Peak Oil Production:  Bell Shaped Curve of World Oil Production

 

        " ...global oil supply (is peaking) lower and sooner than
             had been contemplated earlier."

                          -- Allan Greenspan
                              Wall Street Journal, 12/15/2007
                              http://online.wsj.com/article/SB119763743685729349.html?mod=hpp_us_whats_new

Below are some projected worst, mean, and best case scenarios for
future world oil production.

Image hosted by Photobucket.com

     (Graph of  Actual and Projected World Oil Production
                     Source: Dr. C. J. Campbell)

 

In the long view, humans will have devoured the entire world's oil
reserves in only about 150 years.  (Our descendants may not
be too happy with us.)

 


 

 

A Related Problem:  What Happens When World Oil Demand
Outstrips Production?


Price increases.   Very, very unpleasant price increases.  Prices that
never go down again -- that always trend up.

 


Source: http://www.aspo-usa.com/index.php?option=com_content&task=view&id=371&Itemid=91

 

Source: http://www.afstrinity.com/worldoil.htm
 

There are three very important "take home" messages.

The first:

1. We are close to, or at, both of these  inflection points now:

bulletPeak oil production
bulletOil demand/production crossover

 

But what about transitioning to renewable energy sources?

That would be a good idea.   But we should have started 30 years ago
to avoid a very difficult energy transition period.

Ready for the second take home message?    Be sure you are
sitting down, because the first time this reallty sinks in, it feels like taking
a 2x4 to the stomach:
 

2. We have, as of now, no renewable energy source, nor combination
of sources
, that can scale up quickly enough, or provide anywhere
near to the energy equivalent of oil, to avoid a severe, worldwide
energy shortage.


Sorry to break the news. 

Let's take a moment to re-read and digest that last take home message
(and its implications).
 

    "There is no quickly scalable and energy-equivalent substitute for oil"
         ...
in terms of its energy density,  EROEI (energy returned on energy
         invested), transportability, safety, range, infrastructure, and cost. 

This is quite a tragedy -- many people in poor countries will literally starve
to death because of this.

The third take home message:

3. Even if we had renewable energy sources to provide the equivalent
energy of oil at the same cost, our entire economic infrastructure
is oil, not electron or hydrogen, based.  The economy might not
be able to work as well on non-oil based energy.  For example, could
airplanes, or large mining trucks, be run on batteries?
 

So there are very grave economic and social risks starting now, and exacerbating
over the next several decades.
 

For the past century, oil has been an essentially free source of extremely
dense and useful energy.   Poke a hole in the ground in the right location,
and you get an unparalleled source of energy.  And, it can also be used to make
a variety of products such as plastics, tires, asphalt for roads, medicines, etc.
That is, when we are not burning it.

I was a firm believer in solar, wind, and geothermal energy until a few
years ago, and I still believe they will help individuals. But no combination
of these "renewable" technologies will make a notable difference at the
level of 300 million Americans, much less the 6.5 billion people in the world.
 ...No alternatives scale, and we're out of time. We made the important
decision about energy policy at two critical junctures in American history:
(1) shortly after WWII, when we created the interstate highway system
and the suburbs to build a way of life that had no future because it relied
completely on ready supplies of a finite resource, and (2) in 1980,
when we dismissed conservation at irrelevant..."
          --
Professor Guy McPherson (see this link)

 

But what about hydrogen, and the coming "hydrogen economy?"

Take another deep breath.   Hydrogen is not a source of energy (like oil is). 

You can't poke a hole in the ground a "strike hydrogen."  It actually takes
another source of energy (such as electricity) to make hydrogen.  
Hydrogen is just a "storage medium" for energy, like a battery.
And, it is less energy efficient than a battery.

 

Energy Efficiency of Hydrogen Fuel-Cell Cars vs. Battery Electric Cars:

Source: http://upload.wikimedia.org/wikipedia/en/thumb/8/8d/Battery_EV_vs._Hydrogen_EV.png/753px-Battery_EV_vs._Hydrogen_EV.png

 

But what about other sources of renewable energy?

In one year the entire world produces about 1 cubic mile of oil (2006 data).  It would
take 50 years of energy production by each alternative energy source below to
accumulate the equivalent energy in 1 cubic mile of oil that the world uses now in one year.

 

Source:  http://www.theoildrum.com/node/3084  and http://www.theoildrum.com/node/2320

Energy equivalents of 1 cubic mile of oil (CMO).
 

To produce the equivalent amount of of the energy provided by oil in one year would take:

               200 Three Gorges Dams 
            2,600 Nuclear Power Plants
            5,200 Coal Fired Plants  (not good for global warming...)
      1,642,500 Wind Turbines
4,562,500,000 Solar Panel

Also see:  can renewable energy make a dent in fossil fuels?

Amount of land required by various alternative energy sources to produce the energy equivalent
of 1 cubic mile of oil (CMO):


Source:  http://www.bootstrap.org/colloquium/session_02/session_02_crane.html

 

The transition to renewable energy has barely started.

For example, as noted in the graphic below, today solar photovoltaic only
produces  0.04% of the world's energy.

World energy usage width chart

Source: http://en.wikipedia.org/wiki/Image:World_energy_usage_width_chart.svg

 

Here is a pie chart view:


Source: http://www.news.com/8301-11128_3-9928068-54.html

 

Reaching peak oil production is bad enough.  But it gets worse...

   ...additional factors that will likely further exacerbate the problem:

1. China and India are now growing massive middle classes. 

They want cars, and this desire will substantially drive
up the worldwide demand for oil.   

The State of California consumes more oil every year than does
the entire country of China (source).   Populations:  California, 37
million; China, 1.3 billion.  Only about 1 out of 70 people in China
currently own a car.   The rest would like to. Car sales in China are
up more than 800% since 2000 (source).

2. As noted above, current renewable energy sources are far less "energy dense"
than fossil fuels, and they are not rapidly scalable.

A few relevant quotes:


"No combination of conservation measures, alternative energy sources,
and technological advances could realistically and economically
provide a way to completely replace [oil] imports in the short or medium term."
    -- Stuart McGill, Exxon Mobil Senior Vice President

"Based on everything we know right now, no combination of (renewable
energy sources)... will even permit us to operate a substantial fraction
of the systems we currently run -- in everything from food production and
manufacturing to electric power generation...   We are in trouble."
  -- James Howard Kunstler, "The Long Emergency"

"No combination of renewable energy systems have the potential to
generate more than a fraction of the power now being generated
by fossil fuels."

  -- Jay Hanson

"In our own day, we must eventually  move to lower grade energy
resources as we slowly run out of oil.  Therefore, we might expect
the transition from oil to oil alternatives to be a decisively less
successful energy transition than previous energy transitions in
history, since all the previous transitions were from low grade to
high grade energy resources, and the coming oil transition is from
a high energy resource of oil to lower grade energy resources."
  --
Professor Douglas Reynolds, oil and energy economist

"If someone, somewhere, comes up with a source of
power that is safe, inexpensive, and for all intents and purposes
inexhaustible, then we, the Chinese, the Indians, and everyone
else on the planet can keep on truckin’. Barring that, the car of
the future may turn out to be no car at all."
 
-- Elizabeth Kolbert,
Running on Fumes, The New Yorker, 11/5/07
 

3. Energy Returned on Energy Invested (EROEI), or "net energy,"  is falling. 

The real underlying problem is not peak oil, but declining "net energy"
or "EROEI," for oil.

This is one of the most foundational peak oil concepts to understand.
It doesn't matter how much oil is in the ground -- what matters
is how expensive it is to get it (as well as the flow rate).

To get 100 barrels of oil in 1930, it took only 1 barrel of oil energy.
In 1970 the ratio had dropped to about 30:1.  Now that ratio has fallen to
about 10:1.  Once this ratio falls to 1:1, it will take more than one barrel
of oil to extract one barrel of oil.  Game over.
(More info here and here; also see "Why EROI Matters" by Professor
Charles Hall, and Net Energy and Jevons' Paradox, John Michael Greer.)

So, more important than peak oil is "peak net energy."

Note in the following charts how rapidly the oil EROEI decline comes
near the end.

 

The Net Energy Cliff for U.S. Oil


 Source: http://www.theoildrum.com/node/3800

 

A smoothed look at this "net energy cliff" for U.S. oil


Source:  http://europe.theoildrum.com/node/3685#comment-311063

 

"If for example, we are now at 8:1 and the rate of change is 3.5% (cost
doubling every 20 years) then in 20 years we will be a 4:1 and in 40 years
we will be at 2:1. Perhaps we should title this curve the 'Death Curve"
or the "Blindside Curve"."
     Source: http://www.theoildrum.com/node/3800

 

Energy Return on Investment for oil

Source: http://www.theoildrum.com/node/2367


Graphic from Energy Return on Investment - Towards a Consistent Framework, by Mulder, K. and Hagens, N.:

 

A technical explanation, if you are so inclined:

"The total 'resource' in the above graphic is the area A+B+C+D. It directly requires D
energy to extract A+B+C+D energy. Extraction and distribution also requires indirect
costs (like employees driving to work, health insurance, steel for the drillpipes,
sandwich meat, etc.) This is energy cost C. As the scale of resource extraction
increases, the ratio of A/(C+D) declines. Though conventional economics might not
have done so, we also included cost B, which is the environmental externality costs
of increased extraction. Once the scale of extraction reaches the point between A
and B on the X axis, it takes more energy to produce the marginal unit than the
marginal unit is worth. The 'resource' is still in the ground but is energetically
unprofitable to produce. If at this point, (assuming one values the environmental tier B),
an energy company uses its own stocks of energy to continue production, they do so
at an energy loss, and would be better of selling or using their stored energy
for other purposes."

 

When will ultimate net oil capacity be reached?


Total domestic U.S. oil projection (EIA) in mbpd (black) with sensitivity
on net available to society (green). 

Could U.S. domestic "net oil energy" fall to zero by 2022?


Source:  http://www.theoildrum.com/node/2367

 

 

4. Oil exporting countries will reduce (or stop) exporting oil when they cannot
meet their own growing internal demand for oil. 

 

Because the U.S. reached peak oil in 1970, as noted above,
our domestic oil production has declined ever since.   Where did
we get the oil we needed after that point?  From foreign countries.
 

 


Source: PickensPlan.com

Today the U.S. sends over 700 billion dollars a year to foreign
countries to purchase oil.   Our economy can't take that
kind of financial hemorrhaging for long.

Further, as those foreign countries reach peak oil, and their
oil production begins to decline, they will have less oil to export. 


For example, the U.S. gets much of its oil from Mexico; however
Mexico will be unlikely to meet its own internal demand for oil
within a decade -- there will be none left to export to the US.   
(See "Net Oil Exports and the Iron Triangle" by Jeffrey Brown.)

Compared to 2007, in 2008, Mexican oil production dropped 6.4% and
their oil exports fell by 14%.
(Source:
http://www.iht.com/articles/ap/2008/03/24/business/LA-FIN-Mexico-Oil-Production.php).

 

 


Source: http://europe.theoildrum.com/node/3875

Also see the article: Time Running Out for Energy in Mexico
 

The "Export Land Model" by Jeffrey Brown suggests that, as world oil production declines,
while at the same time world oil consumption increases, the amount of
oil available for export from oil producing countries to oil importing countries
will decrease over time.

 


Source:  http://www.fxstreet.com/futures/market-review/outside-the-box/2008-05-20.html

 

Ironically, as U.S. oil production further declines, we will
become increasingly dependent on oil imports in the future. 
(While our politicians continue to talk about oil independence as
if that was a realistic possibility...)

 

Source: GraphOilogy February 27, 2006

 

 

5. Higher Oil Prices Cause Inflation.

As the cost of energy rises, the cost of everything else made with
oil and oil energy (like building materials) also rises. (More info here.)


6. Oil hoarding.

Once it becomes clear that world oil production is on an inexorable decline,
and that oil prices are on an ever upward trend, oil hoarding will begin.
Some oil may simply not be for sale, at any price.  Oil prices will spiral
upward in a self-reinforcing, yet volatile, feedback loop.
(More on this: see this article.)

Should the oil markets themselves begin to 'connect these dots'
then all our lives are going to be impacted violently and
immediately. ...as soon as Peak Oil is recognized that for all practical
purposes the situation is already upon us, then a fast and vicious
"resource grab" will be initiated. The price of oil in the markets will
begin to rise dramatically. This will initiate a circular hedging
hoarding mentality in large end-users, governments, and
multi-nationals. This will then have a myriad of devastating effects...

   --
    http://deconsumption.typepad.com/deconsumption/2005/03/the_most_import.html


 

 

Part 3: Possible economic and social scenarios following peak oil.


        "Alas, poor world, what treasure hast thou lost!"

                          
-- William Shakespeare (Venus and Adonis)

Without the quick development of dense, renewable and rapidly scalable energy
sources, we may be in for a very difficult ride ahead.  If we don't act
now, oil may be to modern industrial/technological civilization what trees
were to the Easter Islanders, what grape juice was to the yeast colony,
and what grass was to the St. Mathew Island reindeer. 


Cheap, abundant energy is the oxygen of modern civilization.

There is no substitute for energy. The whole edifice of modern society is
built upon it. It is not "just another commodity" but the precondition of
all commodities, a basic factor equal with air, water and earth.

-- E. F. Schumacher (1973)

When critical resources are decreasing, game theorists call this
situation a
negative sum game.  Such "shrinking overall pie" situations
can often lead to intense conflict, unless social structures are developed to
help to enable cooperation, and, in the case of peak oil, a massive
effort to develop renewable energy is started immediately.

Whether we will have enough time at that point to make
the transition to renewable energy is the question.


So, what does this mean for me?  For example, what will a gallon
of gasoline likely cost in the future?

Superhighways, coast to coast.
Easy to get anywhere.
On the transcontinental over road,
just climb behind the wheel.
How does it feel?
When there's no destination that's too far?
And somewhere on the way,
you might find out who you are...

    -- "Living in America," James Brown, song lyrics.

Ok, let's bring this home to what we all understand -- gasoline prices.  

Below is one possible future price scenario for a gallon of gas.
Of course, it would be surprising if the gas price projections in the table below were
exactly on the mark each year, but the general upward trend in prices is likely
to be accurate. 

Think about this: How would your life (and the economy) change in 2012,
just a few years from now, if a gallon of gas costs over $17 a gallon?


Possible Future Gasoline Price Scenario
(from http://survivalacres.com/wordpress/?p=800 )
 


 

Here is a future price scenario for the cost of a barrel of oil (in today's nominal dollar
values).

 


Source:  http://anz.theoildrum.com/node/3947

 

Historically, the price of a gallon of gasoline has been about the price
of a barrel of oil divided by 20, with a lag of up to a year and a half.
According to this historical relationship, oil at $200 a gallon might
equate to gasoline at $10 a gallon.

Historical and projected (to 2012) world oil supply, demand, and price:

 


Source: 
http://www.theoildrum.com/node/4397

 

 

The Economic Impacts of Peak Oil

         "It is the scale of the problem that defeats most imaginations, including mine."
                      -- "HeadingOut", http://www.theoildrum.com/node/3125

"The challenge over the next several decades is to manage the consequences
of unavoidable dependence on oil and gas that is traded in world markets
and to begin the transition to an economy that relies less on petroleum.
The longer the delay, the greater will be the subsequent trauma
...the transition could be especially disruptive
."
      -- Council on Foreign Relations. "Independent Task Force Report #58
             "National Security Consequences of Oil Dependency"
              http://www.cfr.org/content/publications/attachments/EnergyTFR.pd
 

The graph below shows the percent of total world gross domestic product (GDP)
(economic output) that is spent on oil.   The vertical axis is price, the horizontal
axis is world oil production per year.   The graph is a bit difficult to interpret
because there is no axis for time.  However, each dot represents a particular
year, and time would pretty much correspond to the horizontal axis of oil production
per year.  Note that as oil production has maxed out, the percent of world
GDP spent on oil has shot up.  With oil at $135 a barrel, the dot would be up above
the top of the graph at about 6.5%. 


Graph: Percent of world economic output spent on oil.


Source:  http://www.princeton.edu/hubbert/current-events.html (see May, 2008 article)

Kenneth Deffeyes, who developed the graph, goes on to say:


"
Multiplying production (barrels per year) times the oil price (dollars per barrel)
gives a total cost in dollars per year. It's an enormous number; tens of trillions
of dollars per year...  Oil production obviously cannot consume 100 percent
of the world's income.   My intuitive, uninformed guess is that it cannot go
above 15 percent. If we see oil at $300 per barrel, we will be looking out
over the smoldering ruins of the world's economy."
 

To further exacerbate the problem, world GDP will itself shrink
as the price of oil increases.  That is, not only will the cost of oil
consume a greater percentage of the world economic pie, but the
size of the economic pie itself will shrink as the price of oil increases.  That
is a self-reinforcing feedback loop.

As noted in the graphic below, oil production growth is highly
correlated with world GDP growth.   A decline in oil production
will likely lead to a corresponding decline in world GDP.

From "Estimating the Economic Impacts of Peak Oil"
http://www.inspiringgreenleadership.com/blog/aangel/estimating-economic-impacts-peak-oil

 

 

 

"How fast does the economy decline as oil production declines?  In his latest report, drawing on various sources, Robert Hirsch reasons  that the correlation is 1:1. A 2.5% annual decline rate will shrink the  global economy by 25% in 10 years. Other reports substantiate that ratio.

...our GDP will decline at approximately the rate oil declines.

...With the annual oil decline rate expected to range between 2%  and 5% (see Hirsch, 2008) and the Oakland Peak Oil report using  2.6%, we will have a massive unemployment and homelessness  problem on our hands. It also seems reasonable to expect that a great deal of wealth will be destroyed during the decline, as is happening now in the current credit crunch but on a larger scale."

 

 

In fact, 4 of the past 5 economic recessions in the U.S. followed oil price spikes.
 


Source:  http://www.theoildrum.com/node/4727
 

Note the relationship between oil price spikes and economic contraction.

Also, we must consider that the nominal price of oil might fluctuate wildly as the underlying
monetary supply expands (inflation) or contracts (deflation).   Indeed, economic systems
may become so unhinged by price fluctuations in oil that the system becomes wildly
chaotic, with extreme cyclical swings prices as economies collapse to due high oi prices, recover,
collapse again, and so on.

However, the bottom line is this:  oil will become increasing expensive in real terms, even as
it goes through wild swings of nominal decreases (due to general economic contraction
and deflation) or nominal increases (due to monetary inflation).   During an economic
depression, the real price of oil will be too expensive for most people to sustain their
current standard of living despite nominally low oil prices.   That is, if you don't have
much money, oil is pretty expensive even when it is nominally cheap.

In the article The Expected Economic Impact of an Energy Downturn,
by Gail Tverberg, the possibility that the "economic pie" will
be shrinking in the future is explored:


Source: http://www.theoildrum.com/node/3747

 

 

 

So, what might we expect in the near future?

As noted earlier, a shrinking economy is a "negative sum game"  (similar
to the game of "musical chairs").    Such situations typically lead to intense
conflicts over resources (and make resource wars more likely).

"When all the world is overcharged with inhabitants,
then the last remedy of all is war; which provideth
for every man, by victory, or death."
    - Thomas Hobbs, Leviathan

Video: Dr. Robert L. Hirsch, Sr. Energy Advisor at Management Information
Systems, delivers a keynote speech at the 2008 AFVi Conference in Las Vegas
about the economic impacts of peak oil.


 

 

Why aren't we getting a "heads up" about peak oil? 

It is difficult to get a man to understand something when
his salary depends on his not understanding it.
     --Upton Sinclair

Brief answer: Governments  and corporations are not in the business of communicating
bad news to their constituents (although ethically they should), especially
when such bad news will threaten  short term profits or chances of
re-election.   They are "near-sighted."

The first sobering "heads up" was by geologist M. King Hubbert, in 1956.  He warned that
oil production in the lower US 48 states would peak in 1970.   In 1957, Rear
Admiral Hyman Rickover gave a speech in which he warned about the future
decline in fossil fuel resources, and he stressed the need to tell the younger
generation.  However, there were no warnings about peak oil from the government.

U.S. oil production did peak in 1970, just as had Hubbert predicted in 1956.  
He also warned that world oil production would peak sometime around 2000.  
Given that Hubbert had already gotten one prediction right, you might think
that the government and corporations would warn us about the predicted
2000 world oil production peak. 

They didn't. 

In her article, Peak Oil and Politicians, Kelpie Wilson, notes:

Since 1956, the world economy has proceeded under a sort
of oil company spell that has woven the illusion all around us
that oil depletion is so far into the future that we don't
need to worry about it. That belief was essential to support
the aim of an endlessly growing economy.

 ...Today, despite skyrocketing oil prices, most politicians
still avoid the term "peak oil." Most of the media still treat
peak oil advocates with skepticism, using epithets like "fringe"
and "so-called" to describe peak oil theory

When speaking of energy issues, politicians will often use
the euphemism of energy security, acknowledging that the US
has only three percent of the world's oil reserves and warning
that most of the rest of it belongs to unfriendly or unstable
governments. While there is truth to this type of statement,
it sets up a framework for conflict by creating the perception
that there is plenty of oil left but bad people are keeping it
away from us.  Both Democrats and Republicans buy into this view.
In this election season, some Democrats seem even more willing
than Republicans to play the oil fear card and promote quick-fix
measures that are ineffectual or downright ridiculous.

 ...After years of toning down the message of peak oil in public
discourse, voters need to let candidates know that now is the
time to tone it up.
 

From 1970, when U.S. oil production peaked, until today, when world oil production
is peaking, instead of warning us about peak oil, the U.S. leaders allowed us to
became increasingly dependent on foreign oil by failing to start a massive program
to produce renewable energy.

President Carter did make a bit of an effort to warn us.  In a televised televised
speech on April 18, 1977, Carter said:

Tonight I want to have an unpleasant talk with you about a problem unprecedented
in our history. With the exception of preventing war, this is the greatest
challenge our country will face during our lifetimes. The energy crisis
has not yet overwhelmed us, but it will if we do not act quickly.

 ...The most important thing about these proposals is that the alternative
may be a national catastrophe. Further delay can affect our strength
and our power as a nation.

Our decision about energy will test the character of the American people
and the ability of the President and the Congress to govern. This difficult
effort will be the "moral equivalent of war" -- except that we will be uniting
our efforts to build and not destroy.

 

Here is a video of this speech:
 

 

This theme was expanded in his July 15th, 1979 "Crisis of Confidence"  speech. Carter
warned that the 1979 oil crisis was the "moral equivalent of war."  He also said:
"We believed that our nation's resources were limitless until 1973, when we had
to face a growing dependence on foreign oil."  Note that he came close, but he
didn't quite explain why our oil resources were not "limitless."

President Carter set the following national goals in that speech (goals, which in
retrospect, were a stunning failure):

Beginning this moment, this nation will never use more foreign
oil than we did in 1977 -- never. From now on, every new addition to our
demand for energy will be met from our own production and our own conservation.

 ...I am asking for the most massive peacetime commitment of funds
and resources in our nation's history to develop America's own alternative
sources of fuel -- from coal, from oil shale, from plant products for gasohol,
from unconventional gas, from the sun.

I propose the creation of an energy security corporation to lead this effort
to replace 2-1/2 million barrels of imported oil per day by 1990. The corporation
I will issue up to $5 billion in energy bonds...

 ...we will mobilize American determination and ability to win the energy war. Moreover,
I will soon submit legislation to Congress calling for the creation of this
nation's first solar bank, which will help us achieve the crucial goal of 20 percent
of our energy coming from solar power by the year 2000.

Wait... did he say 20 percent of our energy would be from solar power
by the year 2000?  Did he say that we would reduce imported oil to zero by 1990?

Most egregiously, President Carter never really explicitly mentioned the words "peak oil."
He never mentioned the more general problem of world oil depletion, or the declining
world oil EROEI.   He did not mention that renewable sources of energy could not
replace the equivalent amount of energy provided by oil.

Had the real, underlying problem been clearly articulated back then, might things have turned
out differently 30 years later?   What if, back in 1979, President Carter had mentioned
that oil production in the U.S. had peaked nine years ago, and we were on a
irreversible decline?   What if he had mentioned that Hubbert had forecasted that peak,
and that we had only about 20 years to prepare before Hubbert's prediction that
world oil production would peak around 2000?

At least President Carter mentioned the general problem, albeit without mentioning
peak oil.   To be fair, none of the subsequent presidents have never mentioned
the words "peak oil" in public, either.

In 1980 Carter proclaimed, in what came to be called the Carter Doctrine,  that the
U.S. would intervene militarily if our oil supply from the mid-east was threatened.
Apparently he was aware that renewable sources of energy were not going to
replace oil quickly enough, despite his earlier comments to the contrary.

In 1993, President Clinton, along with the heads of the major U.S. car companies,
launched the Partnership for the New Generation of Vehicles.  By 1997, they had
produced an 72 mpg concept "supercar" that would be a diesel-hybrid combination.  After a
billion dollars of government money, in 2000 the concept cars were wheeled out.

But none were actually sold to consumers.  Why? Isn't it rather strange to spend
over a billion dollars of taxpayer money to develop a 72mpg car, but then not
insure that it is actually available to consumers for purchase?
(For a Frontline video on this topic, see: 
http://www.pbs.org/wgbh/pages/frontline/video/flv/generic.html?s=frol02s1514q4b7&continuous=1 )
 

In 2002 the Bush Administration scrapped  the project. 

In her article Running on Fumes,  Elizabeth Kolbert reviews this project, and writes: 

Detroit has to change. Detroit won't change. The two statements
seem incompatible, and yet here we are. The Big Three still claim
to be on the verge of introducing revolutionary new technologies—"Imagine:
A daily commute without a drop of gas," a G.M. ad touting a battery-powered
car (still in the concept stage) exhorts—even as they continue to fight higher
fuel-efficiency standards, on the ground that meeting such standards would
be technologically infeasible.

Today, we still aren't we getting a "heads up" from the current U.S. President, or other world
leaders.  Why?

Even the main stream media, which "...frequently brags on its role as the public’s
watchdog..." is asleep at the wheel.   (See the articles
The Silent Side of Oil: Press needs to pump information on peak supply by
Katherine Bagley, in the Columbia Journalism Review; also see: While the Watchdog Sleeps.)

If a bus is barreling down the street toward you, don't your leaders and the media have an
ethical duty to warn you?
 

Although we have not gotten a warning from top government and business leaders,
or from the majority of the main stream media, the word is starting to get out.

A very small group of U.S. congressional representatives -- the US Congressional
Peak Oil Caucus,
with representatives Udall and Bartlett, is sounding a warning.  
But this issue is so  important, it should be coming from the very top national and
international leaders.

One warning that did come from the main stream media was the CNN production "We Were
Warned: Out of Gas
" with Frank Sesno.
( http://www.cnn.com/2008/US/05/14/bts.sesno.gas/index.html )
 


 

From the video transcript: 

Frank Sesno: What is your worst case scenario?

Mathew Simmons:
My worst case scenario is so bad
    that you don't want to go there.


(Source: http://transcripts.cnn.com/TRANSCRIPTS/0706/02/siu.01.html )


 

Also, CNBC ran an special program in October 2008 about the problem:


 

For some video clips from the program, see this link: 
http://www.cnbc.com/id/26334704

 



Is there enough time (and oil) left to make the transition to renewable energy?

"The era of procrastination, of half-measures, of soothing and baffling
expedients, of delays, is coming to a close. In its place we
are entering a period of consequences."

      -- Winston Churchill, November 1939

In 1977 Barry Commoner wrote in The Politics of Energy that we must
begin developing renewable energy now because
the remaining oil
reserves themselves
will be needed to serve as the transitional medium

to build a renewable energy infrastructure.
  That was over 30 years ago.  

More recently, Dr. Robert Hirsch, in a study sponsored by
the U.S. Department of Energy titled Peaking of World Oil Production: Impacts,
Mitigation, & Risk Management
concluded that to avoid serious impacts, a peak oil
mitigation crash program must start 20 years before peak oil.  We apparently are at peak
oil now, and the crash mitigation program has yet to begin.

Again, the critical issue is this: once peak oil and its potential consequences
become generally known and accepted, will there be enough time to make
the transition to renewable energy sources quickly enough to avoid major
economic and social disruptions?  

Will the last precious barrels of oil be used to power SUVs, or will they
be used to build the renewable energy infrastructure that is
needed to avoid an energy famine?


For now, what renewable sources of energy can help to at least mitigate
the upcoming energy famine?

Let's evaluate several sources of energy in terms of their current potential.

Note: I am not an energy expert.  However, I developed the tables below simply
because I could find no similar simple, overall summary developed by experts. 
The data in the tables are my rough estimates, and, could be a bit off the mark.

Point values in the tables below: 

5 - Very Good
4 - Good
3 - Medium
2 - Poor
1 - Very Poor

  

CURRENT ENERGY SOURCES:

 

 

EROEI*(estimated
EROEI in parens)

Energy
Density

Easily Stored

Easily Transported

Safety

Easily
Used for
Transport-ation

Low Infrast-ructure Costs

Summary
Score
(Average)

 

NON- RENEWALBE, FINITE ENERGY SOURCES:

Oil

5 (20)

5

5

5

4

5

5

4.8

 

Coal

3   (9)

4

4

4

5

2

3

3.5

 

Natural Gas

5 (20)

4

3

2

2

2

4

3.1

 

Nuclear

1  (4)

5

5

5

3

2

2

3.3

 

RENEWABLE ENERGY SOURCES:

Hydro (dams)

4 (11)

3

5

1

3

2

3

3.0

 

Wind

3 (7?)

2

2

2

5

2

4

2.8

 

Solar PV

3 (5)

2

2

2

5