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Peak Oil Happened Already

By       Message Douglas C. Smyth     Permalink
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I wrote about the likelihood that we'd be facing peak oil in my book, The Selfish Class, back in 2005 (available at At the time, the received wisdom was that if we reached it, it wouldn't be until 2030, or so, but some people thought it would be earlier. Sooner seemed more likely to me. Anyway, now, with oil swinging between the unbelievable prices of $130 and $145 a barrel, with oil companies having trouble replacing reserves depleted, with the great oil fields of Iran and Saudi Arabia, the North Sea and Texas getting old and tired (showing signs of depletion, or as in the case of Texas, already depleted) it's not surprising that "received wisdom" is changing.

Clifford Wirth, peak oil specialist, thinks we reached peak already; 2007 was the magic year. If you look at the run-up in oil prices in terms of peak oil, it might really make sense.

Peak oil doesn't mean there won't be more oil out there, nor does it mean that we won't continue to use too much of it; it means we will find less additional oil than we use up. But as prices rise, we will economize (probably why prices went "down" this week), i.e. we will use less wherever we can. But peak oil means that what will be discovered will be less than what has been discovered already, that total reserves will dwindle, that what we use will be more than what we find to replace it, and the oil left to extract will cost more and more, like the deep sea oil requiring platforms costing billions of dollars to construct. Or oil extracted from shale and tar sands, extremely expensive and energy intensive just to produce. It's a lot different from the Texas or Arabian oil fields where all you had to do was drill a hole a few hundred feet down and out would come a gusher, oil that would literally cost only a few dollars a barrel to produce.

Because of this, we'll be forced to make major changes, like not living in ever-expanding suburbs, which require individual vehicles for getting to work in the cities, or where you have to drive to buy necessities.

Biofuels may replace a lot of oil, but they won't be cheap. And, even as oil has generated wars--as in Iraq--and coups (all over, but especially in Iran) biofuel will, too.

The combatants may be different. If American corn producers, Brazilian cane growers, Malaysian palm oil plantation owners profit, others will lose: the poor in the Third World (and even the US) whose food costs are already rising out of sight, as well as the indigenous who are displaced, and everywhere the environment. What could ensue might be ugly: class warfare around the globe.

It doesn't have to be this way, but we will all have to radically change how we live if we want to avoid that ugly and expensive alternative. An alternative might be to everyone's advantage, considering the angry world we would otherwise be creating, as oil is used up. Instead we could change how we live, in some ways going back to a simpler age. We would still have computers and Internet and cable probably; these are not so resource intensive and they can save on transport. But we would have to live in smaller houses, so we can heat them, we will probably have to do without air-conditioning, unless geo-thermal systems become widely affordable. We will have to buy what is local most of the time, because to ship strawberries from Chile so that we can enjoy them in winter, or fresh peas from Mexico when icy winds blow, will no longer be affordable, except as a great luxury. Transportation costs will be too high, and of too great a cost to the global environment.

We've been living in a fool's world, and now we're beginning to face bitter reality. The American Way of Life is as obsolete, already, as the dinosaurs. And yet Chinese, Indians, Venezuelans and Brazilians want it, too.

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It's like a cruel joke. When I studied in graduate school in the late 60's, specializing in the development of "underdeveloped" nations, no one foresaw how rapidly China, India, Brazil, Vietnam and other countries would emerge as modern industrial and emerging consumer nations. It seems almost miraculous from that perspective: in 1966, economic development--except in educated nations like Japan and Western Europe--seemed to be far in the future; there seemed too many social barriers, political barriers, attitudinal barriers, organizational barriers and resource barriers.

Why is it a cruel joke? Here the Chinese, Indians, Koreans, Malaysians and so on are beginning to get a taste of the 'good life.' But they won't be able to afford it even as long as we will. They could grow bitter for losing it.

Think about all those nations as collections of bitter, resentful people with a lot of resources--especially given their numbers. Think of the US and the other older developed nations as the dominant bloc, which has tried to allocate the bulk of dwindling global resources to its advantage. The bloc (the original G-7 plus a few) will defend the status quo, as we are doing in Iraq and Afghanistan.

But China and India and the others now referred to as emerging economies, which includes Russia, will be those nations with rising power that perceive that they've been left with the short end of the stick. They won't see any advantage in the status quo.

World War Two happened because the Axis nations saw no advantage in the status quo and wanted to overturn it. Maintaining an American military costing more than the rest of the world's defense establishments combined is not a sustainable way to prevent world conflict of this order, as the Sept. 11th attack demonstrated; it will simply invite it by other means. Besides, as the US faces shrinking and ever more expensive resources, it won't be able to afford such an establishment--or won't be able to afford anything else.

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We could avoid this dilemma if we turned in another direction: if we tried to minimize consumption and maximize efficiency and conservation, thereby making it more possible for all to have enough. By doing that, we might avoid becoming such an ugly, violent world. If we rode bicycles or mass transit to work, and lived in places where we could, if we supported our local farms, and changed tax laws so that they wouldn't be forced to sell to developers, if we depended more on each other in our local communities, if we recognized the true costs of things (their environmental and depleted energy costs) and used them accordingly, our resource needs could be dramatically reduced. We could even be better off, healthier and maybe even happier.

We'd have to get used to the idea that we would have to make do with less materially. Gee, owners of storage units would have to find some other line of work, retailers of non-essential items would have to cut back, but services, of all kinds, would have unlimited potential for growth.

Yes, we are facing major changes if peak oil is a reality, but if we are going to cut our carbon emissions enough to have an impact on global warming, we'll have to make those changes anyway.

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I am a writer and retired college teacher. I taught college courses in Economics and Political Science (I've a Ph.D) and I've written as a free-lancer for various publications.

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