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).

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…

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)…

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.

Our absurdly unrepresentative government (elected by 22% of registered voters) led by the most distant and disconnected Prime Minister since the mad bloke who talked to trees (yes, I know he was a king not PM, but there’s every chance he thought he was prime minister from time to time just as Blair, I feel sure, has a habit of thinking he’s a king) is now openly allowing the demands of drug-dealers to shape health policy.

What the hell is going on?

I am – of course – talking about the proposed ban on smoking in enclosed public spaces and the fact that the government seems far more interested in placating the sellers of alcohol (the second most destructive addictive drug consumed by the nation) than safeguarding public health.

Here’s my thing…

I will defend the right of anyone to consume any drug they choose. Indeed to do whatever the hell they want to their body. I believe that somebody who wants to inject ketamine into their eyeball should be told just how bloody stupid that is, but shouldn’t be prevented – by law, though perhaps their friends have a moral obligation – from doing it. Certainly not criminalised because of it. The idiot; not the government; owns their own body.

On the other hand I don’t defend the right of someone to run up to me in a pub and forcibly inject K into my eye. And I do believe – anarcho-syndicalist that I am – that there should be laws to protect individuals from acts of aggression by others. Society as a whole should have a system in place to isolate violent people and to help prevent acts of violence, rather than leave it up to individuals to protect themselves.

And smoking tobacco falls into that category.

Inhaling tobacco smoke, whether from your own or someone else’s cigarette, is dangerous. This law wouldn’t be proposed unless that was acknowledged as a fact by those proposing it. It’s unreasonable therefore, for smokers to deny public spaces to those who decide not to engage in that – dangerous – activity. The smoker is the one choosing to take the risk, and just like the ketamine wielding psychopath, the smoker should be prevented (yes, even by law) from imposing that risk upon others.

I was once a tobacco addict. At times a heavy smoker. I haven’t touched the stuff in years now, but I went through a particularly self-destructive phase for a while and that – ultimately – was my right. What I didn’t have the right to do was insist that every stranger who shared my company join me in my little self-harm sessions. My right to smoke doesn’t trump my neighbour’s right not to. Ever.

Well. Not unless some alcohol sellers might lose some money. Then maybe it does.

The way this law pans out will provide a fascinating window on the underlying ideology of this government. The choice is simple; between the health of the general population (the vast majority of us involuntarily encounter passive smoking in public spaces at some point during our lives) and the economic interests of a small minority.

I’m well aware that there are plenty of people reading this who would unashamedly argue the free-market case here. I, on the other hand, am something of a sceptic when it comes to free-market solutions. I believe that, except in very specific instances where controlled competitive marketplaces make perfect sense, free-markets tend to act against my view of social justice.

That economic concerns should ever over-ride basic biological ones is a perfect example of this. Whether it’s people starving because they can’t afford food or people being allowed to endanger the health of others because the alcohol sellers might lose out financially; it shouldn’t happen

When Ireland decided to introduce the smoking ban I recall arguments that the long-term economic benefits of a total ban (a generally healthier population) will ultimately outweigh whatever drop in alcohol sales occurs. But to me that’s falling into the economic trap and allowing the debate to be framed in an entirely inappropriate way. If someone tries to inject ketamine into my eye, is it really at all relevant that attempts to restrain the maniac might damage the economic well-being of alcohol sellers?

Which is why it confuses the hell out of me that the government appears to be taking advice from paid representatives of the alcohol industry on this matter. I could completely understand – and would even expect – the government to be giving advice and support to alcohol sellers on how best to minimise the impact of this health policy on their business. After all, there’s no point in making the economic impact any worse than it needs to be.

But it’s madness to allow the economic impact to actually define policy in this area.

I do understand that this can be seen as a little bit nannyish. Charlie the Safety Elephant run amok. After all, why can’t pubs just post a sign on the door that reads “Smoking On These Premises. Enter at Own Risk”? Doesn’t it then return to being a personal liberty issue? You can then choose whether or not to passive smoke. Nobody is forcing you to drink in those pubs.

If a bunch of idiots want to set up a club where they sit around, get drunk and periodically stab one another in the eye with a syringeful of horse tranquiliser, shouldn’t they be allowed to? And leaving aside the question of whether society has an obligation to protect total morons from themselves (an entirely separate principle to whether or not society should protect the rest of us from them), I’d have to say that “yes, such a club would seem to be fair enough”.

So long, of course, as it didn’t actually employ anyone. Bar staff, waiting staff, cleaners, maintenance people, delivery people… none of those should have to run the risk of an eyeballful of K. And this is where my peculiar sense of social justice will infuriate the free-marketeers out there; because I don’t believe that employees should run that risk even if they sign a waiver or a contract or are a big special-k-upside-the-eye aficionado.

It’s certainly true that there are jobs which routinely put the worker in danger. Firemen, incredibly, risk their lives on a regular basis. I once had a hair-raising conversation with a deep-sea diver who worked maintenance on oil-rigs… people are more than willing to take risks if they’re compensated with job satisfaction or enough money.

But a substantial majority of those most affected by passive smoking are low-paid service workers; cleaners on minimum wage, part-time waiting staff getting by on tips, bar staff pulling 14 hour shifts to keep on the good side of the boss. Because the whole employer-employee thing is a power relationship and it would be supremely naive to imagine that any law which allowed exemptions would not be exploited by employers pressuring staff to sign waivers.

On a wider sociocultural level, if it were true that alcohol-sellers who sought exemption from the law derived economic benefit from doing so, then we would have a law which essentially rewards those employers most willing to endanger the health of their staff. So NuLabor are not merely allowing drug-dealers to shape policy; they are allowing the most unscrupulous dealers of the lot tailor the policy specifically to their best interests.

Madness.

Incidentally, there was some criticism of our Jeremy during the run up to the election. But I fear the undeniably insightful Justin may have missed the point a little with Mr. Paxman. You see, our political culture has reached a kind of saturation point with regards to evasiveness. It is technically no longer possible to extract any interesting information from an elected representative. Even the most skillful of interviewer is powerless against an adult stubbornly pretending to be a 4-year-old in a sulk.

Paxman understands this. And he realises that when politicians refuse to answer simple questions, they look like total morons to the rest of us. So he has shifted role. His interviews are no longer about extracting information from politicians. And to judge them on those grounds is to misunderstand the great political theatre being played out. Paxman’s role is now that of The Everyman (and woman). It is he, and not those he interviews, who truly represents us. He sits there and openly sneers at those who most need and merit it. He, as do we, sees through the charade, and he embodies our derision as we watch these bumbling buffoons who refuse to talk straight with those they are supposed to represent.

Paxman is not there to interview. He is there to convey our contempt.

And he’s the only reason I stayed up as late as I did. Watching him sigh and roll his eyes every time a Labour MP used the phrase “an historic third term” was hilarious. And the unconcealed glee that glinted in his eye each time a tory claimed the government is the most unpopular in recent history (“Yes, but if this result tells us anything, it’s that your party is even less popular than the most unpopular government in recent history! You really are a complete shambles, aren’t you?”)

Anyways, in amongst the tedium made just bearable by Paxman, I realised – with shock – that my estimation of Michael Howard may have to increase slightly. I don’t think it’s too far-fetched, after all, to assume that his resignation this morning was simply the realisation that somebody had to step forward, and give the public just one high-profile scalp.

Seeing as how they were too fricking stupid to take one themselves!

• Most controversial election in a long time;
• deeply unpopular government;
• old thatcherite opposition filled with individuals everyone loves to hate;
• third party with An Issue to capture the public imagination;
• all manner of other mad stuff

And yet, absolutely sod-all happened. I mean, people talk of a “slashing of the Labour majority”. But let’s be honest about this… a third-term majority of 66 after everything that’s happened in the last few years is damn close to a vindication for Blair.

What in the name of god were you thinking Britain?!

And to make that plea even more specific… to the 4,124 Labour voters in Dorset West… What?!

If 60% of you lot had voted LibDem, we would have seen the back of Oliver “puppy-torturer” Letwin. It would almost have been a Portillo moment. Don’t get me wrong, I’m not a big fan of tactical voting in general. But dear god people… this is Dog-kicker Letwin we’re talking about! If there’s one person in all England who deserves to have the smug smile wiped from their face…

Ah well. You blew it Dorset West. Every four years or so, a small number of people in one or two constituencies get the chance to send out a tiny message of hope to the rest of us. “See! We really can give these people a proper slap when they get too insufferable.” To ignore that opportunity is frankly shameful.

And so onwards we go into a future that’s suspiciously past-shaped. Bugger.