An Introduction to Peak Oil

There was a time when oil and gas reserves seemed endless…
Recent Shell advertisement

1965 was an incredibly significant year for modern civilisation. Because, although this fact went largely unremarked for three decades, it was the year in which our rate of crude oil discovery stopped rising and began to fall. It was the year of peak discovery, and since 1965 we have been steadily finding less.

It goes without saying that we must discover oil before we can extract it. It also goes without saying that if we extract more than we discover on a regular basis, that we will eventually exhaust any surplus reserves built up during the period we were discovering more than we were extracting. Right now the world is consuming four times as much as it discovers. And that has been the case for many years.

Now, it seems to me that when faced with such an allegation, there is a logical series of steps to be taken. First establish whether or not it’s true. “Are we, in fact, running out of oil?” The next question that should be asked is; “If we are running out, what effects will this have on us?” And then the only remaining issue is “What steps can and should be taken to mitigate those effects?”

Because this essay is an introduction to the subject, I intend to concentrate on Question 1 and then provide very brief responses to the other two. I hope to write separate articles covering the other two in more depth at a later date, so please bear in mind that my responses to those questions are simply outline sketches and shouldn’t be viewed as anything more.

And with that…

“Are we, in fact, running out of oil?”

Well, yes and no.

(Off to a good start, then)

Crude oil is a fossil fuel. In other words, it is formed relatively close to the surface of the earth (geologically speaking) by the effects of pressure and temperature on organic matter in a process that takes many millions of years. This makes it – in practical terms at least – a non-renewable resource. Alternative theories of the origins of oil do exist, but I’m going to stick with the mainstream scientific view of crude oil as a fossil fuel.

So because it’s non-renewable; you could say that we’ve been “running out of oil” since the very first drop was used. And while you’d technically be making a valid point about sustainability, it would also be technically valid to say you were being a bit pedantic. And if we rephrase the question “Are we going to run out of oil within, say, the next thirty years?” then we get the answer “no”. In fact, the data would suggest that we’ve barely used up half the total global reserves, and that there’s still probably another trillion barrels left in the ground to be extracted.

However, perhaps counter-intuitively, the question of when we’ve used up half is remarkably important.

Our ignorance is not so vast as our failure to use what we know
M. King Hubbert

In the early 1950s a petrogeologist called M. King Hubbert, working for Shell, began developing a mathematical model for predicting the extraction rate of crude oil from an oil field. And he also discovered a methodology by which his model could be mapped onto the cummulative production of multiple fields. He demonstrated that – owing to the specific physics of oil reservoir rock – production from an oil field follows a predictable curve. Importantly; the rate at which oil can be physically extracted from a field begins to drop once half the oil has been produced.

By 1956 Hubbert had plugged the data from every oil field in the continental United States into his model and announced to very sceptical colleagues that US production would peak in 1970. This prediction was severely criticised (though Hubbert was highly respected in the field). Nevertheless – depending on which figures you believe – US production peaked in either 1971 or 1972 and Hubbert’s model and methodology were proven correct. Not only for each of the US oil fields, but for the whole continent combined (an error of 1 or 2 years is remarkably accurate given the amount of data involved).

Graph of US oil discovery and production curves

Discovery, shown in green, peaked in 1930 at the edge of the chart. Production peaked 40 years later.

An important point to establish is that Hubbert’s prediction wasn’t a one-off “guestimate” of when US oil production would peak; it was a series of repeatable calculations and models across every major oil field on the continent. In order for his model (now known as the “Hubbert Curve”) to have successfully predicted the year of continental peak, it had to get hundreds if not thousands of individual fields right. And that’s what has made so many petrogeologists take notice of Hubbert’s analysis since the 1970s and apply it to oil fields all over the world. It works.

And when it’s applied to the world as a whole, the image looks like this…

Graph showing world discovery and production curves using Hubbert analysis

The green bars show discovery, highlighting a few exceptional spikes in the Middle East. The oil shocks of the 1970s cut demand so that the actual peak came later and lower than would otherwise have been the case. It means that the decline is less steep than it would otherwise have been. It reminds us that if we produce less today, there is more left for tomorrow. It is a lesson we need to relearn as a matter of urgency.

The previous two charts and their captions are the work of Dr. Colin Campbell, respected petrogeologist and founder of the Association for the Study of Peak Oil (ASPO). You can check out the complete lecture from which they were lifted (both as a video, and as text with accompanying graphics) if you wish to delve further into the actual numbers involved, and how they came to be worked out.

It’s an accessible lecture and assumes no background in the subject, however if you don’t wish to sit through it, the basic point being made is that the empirical data is now pretty incontrovertible… once you add unconventional and deep sea oils plus natural gas to the remaining conventional crude oil, we will hit a global peak in hydrocarbon production sometime between now and 2015.

Now, the more web-savvy among you may decide to confirm Campbell’s numbers with a quick visit to the BP Statistical Review. After all, a prominent economist recently described the Statistical Review as “… the bible for my former colleagues at the Times and every other journalistic venue. It is a fantastic compendium of what we know about energy.” Chris Skrebowski, Editor of UK Petroleum Review also uses the Holy Book analogy; “The BP Statistical Review is very much a sort of industry data bible – it’s very widely used by people looking at the industry, and analyzing the industry and even people within the industry”. And this view of the BP Statistical Review is borne out time and time again. If a reference is made to, for example, the proven reserves in Nigeria; you will hear the number 34.3 billion barrels (as per the Stat Review). Newspaper articles, oil company statements, investment advice… all will use that number. And if you personally discuss the issue with engineers working on rigs in the Niger Delta, they’ll use that number too. Because there is, after all, no other. At least, nothing readily available.

But the BP Statistical Review doesn’t seem to be flagging up any danger signs regarding peak oil. And if you do check Dr. Campbell’s figures against it, you’ll notice they don’t tally. According to BP, for instance, discovery didn’t peak in the 1960s. According to the BP Statistical Review there is no peak oil problem.

Which is why – given these are the “official” figures – it’s taken so long for organisations like the US Department of Energy and the International Energy Agency to take peak oil seriously. That they are indeed finally onboard is a testament to the tireless work of ASPO and many others. You see; the official figures are wrong. Very very wrong. And each time they are cited by politicians, by journalists, by economists, by anyone… a wildly misleading picture is being portrayed.

The BP Statistical Review gathers it’s data each year by asking the oil ministry of each nation how much they pumped, how much they discovered and how much they have left. That’s it. If countries had a vested interest in accuracy this would be a great system of course. But ever since the 1980s OPEC quotas have been set based upon proven reserves. Which is why, on another chart stolen from Dr. Campbell, you can see some curious anomalies in the BP Stat Review (numbers in billions of barrels)…

Chart showing phantom reserve growth in OPEC due to economic expediency

As soon as it became economically expedient to exaggerate the size of oil reserves, OPEC nations immediately claimed a doubling – even a trebling – of proven reserves. And rather than run the risk of losing a share of their quota, there’s a curious reluctance to admit that producing oil actually depletes reserves. Kuwait, for instance, throughout the nineties was pumping between of 600 and 750 million barrels of oil per year (according to the same source… the BP Stat Review) yet saw no commensurate reduction in reserves. Presumably they coincidentally discovered exactly the same amount of new stock as they produced each year. It seems like a lot of OPEC nations do that.

Either that, or the BP Statistical Review is a tissue of lies.

Well, based upon the evidence I’m going to make that call… the BP Statistical Review; the “official” reckoning of global crude oil reserves; is a tissue of lies. And it is obscuring the imminent approach of the peak availablity of hydrocarbons.

The rig count over the last 12 years has reached bottom. This is not because of low oil price. The oil companies are not going to keep rigs employed to drill dry holes. They know it but are unable and unwilling to admit it. The great merger mania is nothing more than a scaling down of a dying industry in recognition of the fact that 90% of global conventional oil has already been found.
Goldman Sachs, advice to investors, August 1999

“So what will be the effects of peak oil then?”

The human race is currently consuming about 28 billion barrels of crude oil every year. Along with natural gas it provides almost 60% of the energy driving the global economy. Crucially, it provides 98% of the energy in the transport sector (download Key World Energy Statistics – 1.32MB PDF – from the International Energy Agency for these and many more consumption statistics).

However, energy is just one strand of the crude oil story. More than 95% of pesticides and 90% of fertilisers used to produce the world’s food started life as crude oil or natural gas. Food grains grown in the United States now contain between 4 and 10 calories of fossil fuel for every 1 calorie of sunlight. Plastics, medicines, industrial chemicals, lubricants, refrigerants, paints, solvents, insulation, antiseptics, inks, detergents… in the words of a very old advertisement for the oil industry, “Crude oil is an essential part of over half a million different products. And many of those products are an essential part of modern life!”

So although the human race existed for millennia without crude oil, it’s no exaggeration to describe it as a vital resource for the continued existence of our current way of life. Unless it can be demonstrated that the modern world can happily go on without the benefits of crude oil, or that crude oil has an adequate substitute, then the fact that we are approaching a point in history after which there will be progressively less oil available is a matter of some urgency.

Energy is the ability to do work. That’s the most basic definition. The less energy you have, the less work can get done. But that’s not the full story of course. Different energy resources have different properties. So, for example, replacing a quantity of energy provided by crude oil with new wind farm developments is not a “like-for-like” substitution. For some applications it would be sufficient (adding electricity to a national grid), but for others it would not (powering our commercial aircraft fleet, for instance).

As a recent report commissioned by the US Department of Energy pointed out:

Oil peaking will create a severe liquid fuels problem for the transportation sector, not an “energy crisis” in the usual sense that term has been used.
Hirsch, R.L., Bezdek, R.H, Wendling, R.M. Peaking of World Oil Production: Impacts, Mitigation and Risk Management. DOE NETL. February 2005.

However the effects of this “severe liquid fuels problem” should not be underestimated. It will coincide with a reduction in the general availability of energy and of all those oil-based products previously mentioned… the most important of which would be, well, ‘food’. Indeed, if the impact of this problem is not correctly managed, it is difficult to see how anything other than complete economic and political collapse will be the outcome.

And rather than spend a long time demonstrating it, I’m going to assume that my readers are smart enough to accept the following as self-evident… “Assuming there is no adequate substitute for fossil fuels, a permanent decline in their availability will – at some point – bring about the collapse of global capitalism”.

Right? Global trade and constant economic growth cannot continue in a world of permanently diminishing energy availability and a progressively less effective transportation sector.

All assuming no substitute of course.

What steps can and should be taken to mitigate those effects?

Well obviously we should break out the substitutes!

Which is where the problem really begins. Because you see… there are none. At least none that could be described as “adequate”. And nor is there any combination of several inadequate substitutes that make up one adequate whole.

This fact would be extremely disspiriting were there not – thankfully – another strategy for dealing with the problem we face. But the fact that this potentially successful strategy could well be ignored until it’s too late to be effective is perhaps so disspiriting as to make the lack of substitute seem almost uplifting in comparison.

Excluding the last-minute discovery (or gift from aliens) of an oil substitute, the only successful strategy must be to adapt our civilisation to the reality of fossil fuel resource depletion. We must adopt an International Resource Depletion Protocol through which all nations agree to cut their consumption of unsustainable resources by at least the annual rate of global depletion. With incentives to those nations who cut consumption more rapidly.

The world must also begin to accept that local sustainability is a necessity. The long distance transportation of goods will become increasingly rare. I’m not talking here about a return to an idyllic pastoral past. This is not neo-Luddism and indeed cannot be. In order to scale back our civilisation, we are going to require some incredibly imaginative uses of existing technology as well as the development of new, energy-efficient specialist technologies.

In other words?

In other words we could soon find ourselves in very serious trouble. Crude oil and natural gas are, from the point of view of sustaining industrial civilisation, two of the most important natural resources (certainly not more important than fresh water, but hardly much less so). We will soon have an ever-decreasing quantity of these vital resources available to us, and we must modify and scale back our activity to accommodate this.

41 comments
  1. Chris said:

    Thank you, very interesting and well argued.
    I have to say I believe the capitalists when they say the cost of oil will rise dramatically with scarcity so providing a “soft landing”.
    If there is a soft landing I don’t see the fall of capitalism as self evident. Perhaps I am being awkward but claiming something as important as that to be self evident harms your agruements.
    I can’t think of any other significant resource failure to back my case though. (Fish stocks is perhaps the best example and we are only slightly ahead of oil there)
    Critisism was meant to be constructive, looking forward to parts 2 and 3.

  2. Monjo said:

    Maybe. I genuinely believe solar, hydro, wind, nuclear and coal can sustain our energy needs. Whether we can find substitutes for our need for oil in the rest of the petro-chemical industry is another matter and a massive reason why we shall have to consume a lot of the energy produced by solar,wind,hydro,nuclear etc, to power recycling.

    The question is not when we hit peak oil BUT reach a level to make it economically viable to expend so much energy for recycling. 2015 would seem like a nice guess.

  3. dearieme said:

    A friend of mine was hired by Texaco to work on coal-to-oil conversion because there was “only ten years’ worth of oil left”. That was back in the late 40s. The “Limits to Growth” alarmists of the 70s were, quite obviously at the time, intellectually vacuous. And yet, and yet…. this Hubbert’s Peak stuff is the first scare of its type, in my lifetime, that might be worth engaging with e.g. I’d expect more activity on natural gas-to-transport-fuel conversion. What would really worry me would be signs of government action to suppress use of the price mechanism as an aid to rational action. Except of course we’ve seen that already with our current govt dropping the VAT rate selectively on gas and electricity.

  4. Jim B said:

    Chris, you’re completely right. That “self-evident” paragraph is very badly worded. I’m not going to edit it now that it’s been commented upon, but I’ll try and do something about it in Part 2.

    Monjo, I’ll hopefully be covering the possibilities provided by alternative energy sources and recycling in Part 3. I believe they are absolutely vital strategies, but only in tandem with a Powerdown strategy of some kind.

  5. Jim B said:

    dearieme, are you claiming that “because a claim was incorrectly made in the 1940s, it can never be correct”? If you and I are driving in a car and I tell you that we will run out of fuel after 10 miles, would it be sensible for you to announce, as we pass Mile 11, that we’ll never run out of fuel?

    I have provided evidence that we are facing a peak in oil production. Arguing about someone’s claims in the late 40s doesn’t actually challenge that evidence in any way.

    Also, dearieme, and this is something of a personal project of mine; could you provide one piece of evidence that The “Limits to Growth” alarmists of the 70s were, quite obviously at the time, intellectually vacuous.

    Just one.

    That book has stood the test of time remarkably well. Unfortunately most people have no idea what it actually says because they either read it and failed to understand it, or believed a review by someone else who failed to understand it.

    On the other issue, I take the complete opposite approach to you. I feel that price mechanisms (i.e. “the free market”) will guarantee a disastrous outcome. I would suggest that all non-renewable resources are made the exclusive ownership of a transnational, non-profit trust and are distributed on the basis of biological need and not market forces.

    But that’s a discussion for Part 3.

  6. Andrew said:

    Jim: Thanks – very enlightening to see the details – but we’ve discussed this before and although we agree on the problem, we disagree on the solution. It boils down to whether you believe that adequate substitutes will be found or invented in time to stave off the peak oil problem. I think they will be, as a matter of necessity (it being the mother of invention, and all that…), although of course I have no evidence. I know you disagree. Looking forward to the other 2 parts though.

  7. Jim B said:

    Andrew, I have a major problem with your position:
    >
    > It boils down to whether you believe that
    > adequate substitutes will be found or invented
    > in time to stave off the peak oil problem
    >
    You see, I don’t deny the possibility of a substitute being discovered. However, as I’ll being demonstrating / spuriously claiming in part 3, it’s extraordinarily unlikely.

    Therefore, given the massive and damaging impact that oil shortages could have upon our society, it’s simply the sensible thing to do, to prepare as best we can on the assumption that there’s no substitute turning up. Meanwhile of course we can invest in all manner of new energy research and efficient technology and what-not.

    But until we find that substitute and breathe a collective sigh of relief, it seems like madness (to me) not to implement strategies to mitigate the worst of the damage that might occur should your Plan A not pan out.

  8. dearieme said:

    Jim B, “dearieme, are you claiming that “because a claim was incorrectly made in the 1940s, it can never be correct”? Quite the opposite, as you will see if you re-read my comment. I am suggesting that, after years of people crying wolf, this time the wolf may be approaching.

    “could you provide one piece of evidence that The “Limits to Growth” alarmists of the 70s were, quite obviously at the time, intellectually vacuous.” I now have a nasty feeling that I can dig out writings by alarmist 70s dimwits but that you will point out that they were not actually part of “Limits to Growth”.

    “On the other issue, I take the complete opposite approach to you. I feel that price mechanisms (i.e. “the free market”)…”: hold on, that is not a valid equation. One can use the price mechanism without having a free market. Our present duties on petrol are part of a price mechanism but that doesn’t imply a free market with respect to, for example, LPG-powered cars.

    “I would suggest that all non-renewable resources are made the exclusive ownership of a transnational, non-profit trust and are distributed on the basis of biological need and not market forces.” Now there we really do disagree.

  9. Andrew said:

    Well, I intend to start mitigating against any personal problems I might have by stockpiling canned goods and heavy weaponry over the medium term, but that’s not a global solution, or at least, not one you’d approve of…

    I don’t see the need to implement a Plan B, or to implement parts of a Plan B, until it becomes clearer than Plan A will fail (say, at least 50% probability). That said, it’s obviously prudent to have a Plan B, and I look forward to reading it. I’m not an energy expert, so I bow to your wisdom here, but human ingenuity is pretty powerful, and I expect a substitute, or substitutes, will turn up in the nick of time. I suppose that is madness, in a sense – it’s certainly blind faith (well, almost blind – I do follow new developments in science and technology reasonably closely).

    Economically speaking, the reason that people won’t prepare for the worst is that people like the status quo – it is going to be well nigh impossible to sell them on massive change. There’s also the problem associated with making any big decision – if it goes wrong, the decision maker is going to get an awful lot of blame. What if a substitute is found just as we flick the power-down switch? That’s a hell of a lot of economic growth we’ve constrained for nothing.

    I have the same intellectual problem with current solutions to climate change – they assume no technical progress in the time it will take for the effects to become seriously felt.

  10. Jim B said:

    dearieme, apologies. I should have put “e.g.” rather than “i.e.”. I assumed you were arguing in favour of a free-market solution. Perhaps I was being hasty.

    I’m afraid your description of the Limits to Growth as being “intellectually vacuous” got my hackles up a bit and I didn’t give your comment the thought I should have. It’s actually a staggering piece of research and still very relevant today. And it tends to be criticised by people who are using it as a shorthand for something else (which annoys me more than it probably should).

  11. dearieme said:

    Jim B: very handsome of you – anyway, it’s just conceivable that I hadn’t expressed myself with utter clarity.

  12. Steve said:

    Some Middle-East watchers predict that the House of Saud will be overthrown sometime before 2015, probably by an Islamist rebellion.

    So just as the oil peaks, Osama bin Laden becomes dictator of Saudi Arabia, sitting on 25% of the world’s oil. The USA and Europe have to fight with Islamist regimes as well as China and India for depleted oil reserves.

    Iraq will be seen by historians as the first of many oil wars. That’s if there are any left to tell the tale.

  13. “Food grains grown in the United States now contain between 4 and 10 calories of fossil fuel for every 1 calorie of sunlight.”

    I would dearly love to see the explanation for that, the calculation. I have a feeling that you are out by several if not many orders of magnitude.
    Start by insolation per acre, yield per acre and add the calorie content of the rainfall (also sun driven, as you know…1,000 tonnes of water for a tonne of grain) and I’m damn certain (although interested if you can prove me wrong) that we do not pour 4-10 times that energy into grain by the use of fossil fuels.

    “No subsitutes”? Please, everything is a substitute. Stop thinking like an engineer for a moment and think like an economist. Everything, up to and including death and the fall of civilization, is a substitute for fossil fuels. No one has ever said that all possible substitutions are appealing or desirable, but they are always there.

    And yes, I and others are working on substitutes in the sense you mean. You can run a car or truck off fuel cells and hydrogen (not derived from fossil fuels) today. No probs.

    Peak Oil just isn’t going to be a problem.

  14. Jim B said:

    Tim:

    Firstly, the calculation you’re looking for can be found in Food, Land, Population and the U.S. Economy. This study was carried out in 1994 by David Pimentel and Mario Giampietro. It established that approximately 10 kcal of exosomatic energy are required for the production of 1 kcal of food. This calculation does include all distribution expense, but it excludes energy required for cooking, home-storage or preparation.

    I myself worked on a follow-up study to Pimentel’s which revised the number from “10:1″ to “between 4:1 and 10:1″. Neither studies, unfortunately, are currently available online in their entirety (to the best of my knowledge). However, dieoff does carry an excellent executive summary of the Pimentel study.

    As for “no substitutes”. You seem to be missing the main point. I’m not talking about the end of everything or the extinction of our species. I’m talking about our current way of life. So I can’t accept the logic that “The death and the fall of civilization” is an adequate substitute for crude oil and natural gas in preserving our current civilisation. That makes no sense.

    >
    > You can run a car or truck off fuel cells and
    > hydrogen (not derived from fossil fuels) today
    >
    Yes you can. But 99% of the world’s hydrogen is currently produced by steam methane reformation; i.e. from fossil fuels. And it’s a staggeringly inefficient energy storage medium from an engineering standpoint. When you propose hydrogen as a replacement for oil, you are really proposing huge quantities of electricity.

    Not only is this an impractical suggestion given current technology constraints and limited uranium reserves, but it utterly fails to address the other non-energy uses of oil which are at least as important.

    Anyways, I don’t necessarily want to start arguing alternative here. This piece was about establishing the fact that oil supply will become constrained quite soon. Subsequent parts will cover the effects of peak oil and potential substitutes.

  15. If oil is running out, why can’t we (1) extract oil from tar sands, or (2) synthesize it using the Fischer-Tropsch process; the latter was used by Germany in WW2 so presumably would be more efficient now.

    As oil rises in price, these alternate sources of extraction and production would become more economically viable.

    Dearieme, you are right: a low rate of VAT on domestic fuel makes no sense at all if we are trying to conserve energy.

    Jim B, regarding uranium reserves: if you use breeder reactors, converting U238 into Pu239, you make your uranium go a lot further.

  16. Jim B said:

    I guess I should really have just written one long article rather than split it up into three. I can assure you Phil that tar sands and coal-oil conversion will be covered later.

    However, it’s worth noting now that producing usable petroleum from both shale oils and tar sands requires two things: large amounts of natural gas, and large amounts of fresh water. It also produces up to six times the amount of toxic sludge as it does usable end-product.

    In Canada two oil-shale concerns have been forced to close (despite spiralling oil prices) because of water-table depletion. Ultimately, however, it’ll be a natural gas shortage which makes Canada’s shale untenable. More later, however.

    On the subject of breeder reactors: I’m sure you’re aware of how controversial that technology is. And nuclear energy probably deserves an article all it’s own. It’s worth remembering that nuclear power still only deals with electricity generation and is not, therefore, a fossil fuel substitute.

    Also it is instructive that there are no breeder reactors currently in operation worldwide… I’m willing to be corrected on that point by the way; it’s late and I can’t be arsed to check just now; but I know both the French and the Japanese have shut down their breeder-reactor programmes and nobody else has built any (beyond a couple of research reactors).

  17. Jim B said:

    … nobody else has built any to the best of my knowledge (beyond a couple of research reactors).

  18. Re. the soft landing argument – I’m not an economist, so this will probably be facile (please correct it if so). If I’ve got it right, the basic idea is that as the oil gets scarcer it gets costlier to buy, and so (given finite buying power) less gets bought, so consumption rate drops.

    So, the rich countries use up the last of the oil and the poor countries get priced out of the market.

    It strikes me that the rich countries, being often the more technologically advanced ones, are better placed than their poor neighbours to develop substitutes for oil (poor though they are). So, instead of spending an increasing amount of money to get a constant amount of oil, it would make more sense (to someone as economically naive as me) to spend a constant (or decreasing) amount of money to get a decreasing amount of oil, and spend the difference between the two money graph lines on developing substitutes.

    But then I’m probably confusing fairness and responsibility with economics, which is where my lack of economic sophistication shows.

    The point on oil wars is, I think, a very pertinent one. Even if the US sees no link between oil burning and global warming, national security concerns would suggest that reducing dependence on increasingly unstable parts of the world is a Good Thing. I would be surprised if even the US could invade enough contries to secure its oil supply for as long as it needs given current rate of consumption.

    Maybe the Department of Homeland Security could help influence US energy policy, in a rare example of joined up thinking by a government. It’s interesting to see that people like the Sierra Club in the states are starting to use this argument.

  19. From the Pimentel article:
    “At present, the food supply of all developed countries is dependent on fossil energy. For instance, the output/input energy ratio of U.S. agricultural crops is 1.4 (Table 4). Thus, 0.7 kcal of fossil energy are consumed in the U.S. agricultural sector to produce 1 kcal of crop. However, the inputs used for the calculation of the energy output/input ratios listed in Table 4 are based on FAO statistics and include only fertilizers, irrigation, pesticides, machinery and fuel for field operations. This totals 850,000 billion kcal spent in U.S. agriculture in 1989. Other energy inputs are required in the agricultural sector, such as energy and machinery for drying crops, transportation of inputs and outputs to and from the farm, electricity, and construction and maintenance of buildings and infrastructures. When these inputs are also included, the total commercial energy used in U.S. agriculture well exceeds 1,000,000 billion kcal (=1015 kcal or about 5% of the total consumption of fossil energy in the United States) and brings the output/input energy ratio close to 1.”

    That’s a very different statement from:

    ““Food grains grown in the United States now contain between 4 and 10 calories of fossil fuel for every 1 calorie of sunlight.””

    I have no doubt that the former is at least roughly correct. That modern farming puts about as many calories into the process as we get out in food. But the sunlight that goes into the process is at least two orders of magnitude greater, not counting the rainfall.

    “This index takes the average insolation value ( 2 calories per square centimeter per minute)”

    If a field of wheat is getting two calories (no, I don’t know whether that is c or kc) per cm2 per minute then there’s a lot more solar energy in wheat than there is fossil fuel such.

  20. Andrew said:

    Even if the US sees no link between oil burning and global warming, national security concerns would suggest that reducing dependence on increasingly unstable parts of the world is a Good Thing.

    So good, in fact, that it is US government policy.

    I would be surprised if even the US could invade enough contries to secure its oil supply for as long as it needs given current rate of consumption.

    And that is just a facile comment. Even if it were US policy to appropriate resources by force, and it’s hard to foresee a situation where that would be even remotely acceptable, the oil is still running out. It would be totally pointless to expend an increasing amount of money to secure a diminishing supply of energy. The marginal cost would massively exceed the benefit that could be accrued from investment in R&D into alternative energy sources, for example.

    Maybe the Department of Homeland Security could help influence US energy policy, in a rare example of joined up thinking by a government.

    No need – it’s already US energy policy to diversify away from fossil fuels, particularly foreign-sourced oil. This is why every European left-wing nutjob is going crazy over Bush’s insolence on the Kyoto treaty. Joined up thinking by individuals is quite useful as well, you know. As is the importance of proper research.

  21. Monjo said:

    arguing about energy from food versus energy put in is silly. if i were to eat Tim Worstall tomorrow, the amount of energy I would get out of him may feed me for 3 weeks, but he’s been alive 30+ years. But on the other hand human meat is the most nutritious meat in the world for a human, and I understand Tim has a tasty bit of leg meat.

    this is why grain crops are more efficient than eating beef burgers. growing cow, walks, breathes, sweats, defecates etc = all “wasted” energy.

    since we humans can not live on sunlight (though that would be a cool GM experiment which would see us all looking like the Incredible Hulk), we have to grow crops – and yes it isn’t energy efficient (input->yield) but never mind.

  22. Rather more than 30+. And who told you about my finely turned calves, dancing the gavotte,suitable for?

  23. Andrew – thank you for pointing out where my arguments and facts were weak. Are there any left-wing nutjobs in the US who are unhappy with current US government policy on energy efficiency etc? If the policy is OK, are they happy with its implementation? The (admittedly limited) research I had done on this suggested that US environmentalists were frustrated with, for instance, the lax federal laws on fuel efficiency of cars (particularly compared to some states’ laws such as in California). I may be misinterpreting your post, but I read it as suggesting that US policy is pointing in the right direction and that I’d got things wrong.

  24. Andrew said:

    Bob: US policy is pointing in the right direction – i.e. to find technical solutions to the energy problem, and to diversify away from fossil fuels. Of course, this takes time, so the implementation of that policy is clearly called into question. That’s part of the argument that Jim and I will reprise once he gets parts 2 and 3 up here.

    Generally though, I’d say environmentalists would probably be unhappy at the soot from our campfires poisoning the environment if we returned back to the caves of the stone age, as many of them seem to agitate for… I’d take their criticisms of fuel efficiency laws with a suitably large pinch of salt. Economic growth provides the excess cash to funnel back into R&D. The more you constrain your economy, the longer it will take to develop that magical, nuclear-powered, hydrogen fuel-cell, wind-turbine gizmo-tron-o-matic.

  25. Bob: US policy is pointing in the right direction – i.e. to find technical solutions to the energy problem, and to diversify away from fossil fuels. Of course, this takes time, so the implementation of that policy is clearly called into question.
    This is not true, or at least enough of it is not true that it can’t be ignored. There is usually a response of “more research is needed” rather than agreeing with the majority of scientists worldwide. There is also pressure by the administration on its own scientists to water down reports that highlight environmental problems. These don’t seem to fit with a sound environmental policy.

    Generally though, I’d say environmentalists would probably be unhappy at the soot from our campfires poisoning the environment if we returned back to the caves of the stone age, as many of them seem to agitate for… I’d take their criticisms of fuel efficiency laws with a suitably large pinch of salt.
    The current and previous governors of California (representing both Democratic and Republican between them) seem to think California can maintain its economic supremacy while tightening fuel efficiency laws. I wouldn’t class Arnold Schwarzenegger as an environmentalist (but then I don’t know him very well – sorry, poor research).

  26. Andrew said:

    Bob: Indeed, but I don’t care about environmental policy, it being driven largely by politically motivated scientists. I’m talking about energy policy. The two are related, but different.

    As for ‘more research is needed’ – this is self-evidently true. Firstly, there is no solution to the problem of climate change. This clearly is a problem requiring more research. Secondly, there are questions about the extent to which it is caused by man. Again – more research required.

    Anyway, we’re now off topic – back to peak oil please.

  27. Energy policy and environmental policy are often the same: improving fuel efficiency does both, and searching for oil in environmentally-sensitive areas is one dictating the other.

    I don’t care about environmental policy, it being driven largely by politically motivated scientists
    True, but it’s also driven by politically motivated companies, and decided by politically motivated politicians.

    As for ‘more research is needed’ – this is self-evidently true. Firstly, there is no solution to the problem of climate change. This clearly is a problem requiring more research. Secondly, there are questions about the extent to which it is caused by man. Again – more research required.
    I’m not suggesting that university departments close because we know all we need to know – we need and will continue to need more research. But should we wait until we know everything before we act to stop and then reverse climate change? I’m not suggesting that you’re saying this, but I believe that there’s enough scientific basis now for action, and then further action when there’s more science.

  28. Andrew said:

    I believe that there’s enough scientific basis now for action, and then further action when there’s more science.

    Me too, but which action is appropriate? Even our own great House of Lords is now following the Bush administration’s line: http://www.timesonline.co.uk/newspaper/0,,172-1682271,00.html

    ‘“On the eve of Gleneagles we look to the UK to give a lead, especially within the G8, in overcoming what we think is an excessive preoccupation in setting emissions targets,” he said. “Technological development is much more likely to have an effect. It’s an area that is much more likely to get the US to co-operate.”

    Warnings by the Intergovernmental Panel on Climate Change on future temperature and greenhouse emissions were also said to be based on “some questionable assumptions”.’

  29. MattAG said:

    Great article looking forward to parts 2&3.

    I have found ‘peak oil’ to confound many aware people (myself included). How is it that such a serious problem has been missed? The arguments surrounding this subject have taken on almost religious fervor since the 70’s, even dividing folks who actually read the ‘Limits to Growth’. This is particularly interesting from a psychological point of view, in that, even smart educated folk can deny the reasoned arguments based on actual data…. I digress.

    The problem is fundamentally rooted in belief, and here we are ALL complicit (to some degree, ignorance is a poor excuse in the developed world) in our consent of this highly unsatisfactory situation. It would seem indisputable that oil supplies will become scarce in short order. It is also morally reprehensible to do nothing about it (at the very best here this is akin to spending our children’s inheritance, at worst its mass murder).

    Optimists in my experience tend to respond to the issue with the well meaning espousal of the best aspects of human nature, e.g. as presented in a recent letter to the Guardian Saturday 2nd June, ‘ why don’t we just build Solar Power stations in the desert (to produce hydrogen from water), leasing the land from African nations and solving the coming energy crisis, global warming and African poverty in one fell swoop’. With a cursory understanding of the technicalities this intuitively makes a lot of sense, and surely there must be smart people who can sort this out!? Surely….

    I have some scientific training and was studying sustainable technologies 20 years ago (ok I was 15, but still, I did the Math). Since then I have attempted to understand the challenges that face us. Those of you who think ‘Technology and Human ingenuity will save us’, are not seeing the sheer scale of this issue. Technologically things haven’t changed all that much in 20 years, in as much as there are STILL no candidates to replace oil, and the odds of discovering one are vanishingly small. After all oil is a rare and magical gift that was created in rare and extraordinary geological conditions.

    The problem has changed in one key respect however, we now have a lot less time to implement a solution. Hydrogen isn’t the alternative to transport fuel, for a variety of reasons (clearly lost on Mr. Bush). I am sure Jim B will explain why in his coming articles. I do think that it will have application in energy storage used in conjunction with intermittent power generation technologies, a problem common to almost all sustainable power generation technologies.

    Recently there was a significant project, proposal presented to the EU, for the construction of a series supper massive solar power stations in the deserts of North Africa for the production of Hydrogen. This would then be distributed via the existing gas network. This was rejected last year on the basis of cost. This is because it would have been the largest construction project in human history by a long way, which would have been nice…

    Which brings us to our current predicament, there is little or no consensus politically and publicly that a problem exists. It is not in the interests of the oil producing nations to come clean about the situation due to the perceived risks of alerting the public to the world wide deception that has been taking place under their/our noses.

    Left to the markets a hydrogen economy would take a long time to emerge (remember there is no infrastructure in place and the required changes are both technologically and economically challenging to say the least, oil had 50+ years to achieve this ). I also believe that this and other options are beyond the resources of all (Transnational Corporations included) but the collective effort of the rich nations of the world.

    On a more optimistic note ( there is a country that is making big strides in sustainability and has over the last 10 years pursued a policy of decoupling itself oil consumption. It has succeeded in cutting imports progressively while going through a period of economic growth. Additionally this period has seen the development of its own internal energy market, production capacity (from crops) and all this from a relative developing nation. I am of course speaking of Brazil.

    Bio-ethanol production from crops now accounts for over 50% of the liquid fuel consumed domestically. This in addition to being sustainable (carbon neutral) releases less toxins than petroleum when burnt and has other benefits for the engine. In fact the original combustion engine was actually designed to run on ethanol, oil hadn’t been discovered at the time.

    The political reasons for this where to escape the influence of Transnational Oil companies (and their pals) and to free this resource rich country from this yolk of cheap oil. It is however the sole example (to my knowledge) of a successful transition to a less dependant model for oil consumption.

    The solution to these problems is not a religious faith in technology or the apparently inexhaustible depths of human ingenuity. It is simply that we need to acknowledge that there IS a problem and actually choose to do something about it. I am still confounded as to why this hasn’t happened yet.

  30. EU Serf said:

    Rather than your rather scary global state idea, surely there are other ways to deal with peak oil.

    If large consumers of oil increased their taxes on energy consumption and if poor nations stopped subsidizing oil products, the world’s economy would become a little less dependent on oil. More expensive fuel for our cars increases the incentives for research into alternatives.

    To those who think we have made no progress in the last twenty years, you are wrong. We haven’t crossed the magic border of cheaper than oil with any alternative technology, but we creep towards it each year.

    With the current exorbitant oil prices look for a flurry of activity on the alternatives front. I am backing biodiesel to make a big splash in the next few years.

    Bioethanol is very energy inefficient. Biodiesel is better.

  31. Alternatives are never going to replace fossil fuels at the rate and scale at which the world currently uses them and humankind’s ingenuity will simply not overcome the facts of geology & physics. Physicist J. Huebner found that our current rate of innovation is about the same as it was in 1600 and by 2024 it will have slumped to the same level as it was in the Dark Ages. Good overview of the problem of peak oil and the fallacy of alternatives is http://www.oildecline.com

  32. The end of the oil age does not have to mean complete disaster for humanity. As we can see from the steadily increasing high oil prices, this is certainly going to mean a huge change in society. This change is likely to occur slower but will be widespread. We can already witness see the effect of high gas prices as more americans are already driving less to save gas. As demand for alternatives increases we will see these technologies become more mainstream. This may take another 20-30 years – we are certainly not going to witness an overnight energy revolution.

    More Peak Oil Resources

  33. Craig said:

    Whatever happened to parts two and three?