peak oil (supply… or demand?)

A good, clear presentation on peak oil at Bristol’s Science Café this week from Ian Page of the International Futures Forum.

He spent too long telling us what a great guy Hubbert was (is there a biography, I wonder? – there should be). But he also brought out clearly that the civilisation- ending interpretation of peak oil depends on two main assumptions.

First is that oil production will soon start to decline, and will get less (energy) efficient and more expensive. That seems unarguable, though there is still scope for difference of opinion about when is “soon”. He reckoned 2020, so just a decade away.

The second assumption is that GDP has been tightly coupled to oil consumption for the past century, and that will continue. So any resumption of growth will mean an inevitable and increasing shortfall in oil supply. If it comes as soon as Page expects, it is impossible to see how it can be made up, really.

So it was an interesting coincidence that Greenpeace published a report the same day which questions the second assumption (summarised in the Guardian here). They argue, essentially, that the link will be broken by energy efficiency and renewables investment, maybe already has been. In which case “peak oil” might turn out to mean peak demand, not peak supply.

This is, at the least, an interesting alternative bit of informed guesswork, motivated by Greenpeace’s opposition to exploitation of Canadian tar sands.

My own, deeply uninformed, intuition is still that the simple reading of peak oil neglects economics – that is, the link between GDP growth and oil use has to some extent been contingent. We used oil to fuel growth because it was so easy and cheap to get we simply didn’t have to think about using anything else. Now we are thinking quite hard about that, for other reasons.

The shortish-term outcome could surely still go two ways, though. If the global economy picks up rapidly, another oil price spike seem quite likely. Which might well pitch it back into recession. As recession slows investment in efficiency and renewables, such an oscillation could be repeated…

On the other hand, sustained oil price increases might combine with climate change concerns to reduce growth in demand for oil faster than anyone now envisages.

That could be read as another way of saying, “I have no idea what is going to happen”. Correct – except that both those options seem to me to reduce the likelihood of the collapse which some people seem to expect, or even, curiously, hope for. One or two folk at the science café, a genteel affair, spoke of the coming “die off” in tones of satisfaction. The implied moral seem to be that “we” deserve it. OK, maybe you lugubrious types do. But do leave me out.

Explore posts in the same categories: energy futures, growth or what?


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