Below we’ve included a fairly lengthy introduction to Peak Oil, aimed at anyone who’s new to the issue. For further information, take a look at the page of links on peak oil, and also click here for some discussion on the connection between peak oil and climate change.
So, what is Peak Oil?
First of all, a note on what Peak Oil is not, as there is a common misconception that Peak Oil is about “running out of oil”. This isn’t what Peak Oil is about at all – oil will continue to be extracted to some degree for many decades to come. In fact, we’ll never run out of oil – there will always be some oil left in the ground because either it’s too hard to reach or it takes too much energy to extract.
What Peak Oil is about is the end of cheap and plentiful oil, the recognition that the total volume of oil being pumped into our economies will at some point peak and then inexorably decline. It’s also about recognising that our industrialised way of life, and the growth in global economic activity over the past century has been absolutely dependent on the ever-increasing supply of cheap oil.
The “Petroleum Interval”
As the graph above illustrates, we are currently living through a relatively short “blip” in history that you could call the “petroleum interval” – a period when large quantities of oil were extracted from the Earth to fuel human activities.
From the start of the 1900s, plentiful oil allowed a coal-based industrialised society to massively accelerate its “development”. From that time, each year there has been more oil brought to the global market (apart from during the two oil shocks in the 1970s, when Middle East crises caused worldwide recessions). Fuelled by increasing oil production, each year society has increased its complexity, its mechanisation, its globalised connectedness and its energy consumption levels.
The problems start when we’ve extracted around half of the world’s recoverable oil. As oil is extracted from each oil field, the oil flows quickly at first and is of a high quality, then generally gets increasingly expensive to extract (in cash and energy terms), is slower flowing and of a lower quality. Eventually a point is reached for each field where peak production occurs, and in the same way, this process happens for whole countries and the world (see graph below). Peak oil production occured in the USA in 1970, in the UK in 1999, and has already occured in 33 of the largest 48 oil producing countries.
At the point of global peak production, for the first time in history, we are not able to increase the amount of oil that’s coming out of the ground, being refined and reaching the market. Global oil supply plateaus and then declines, with massive ramifications for industrialised societies and the global economy.
For oil importing countries such as the UK, the situation is even worse – as global production declines, oil exporting countries are likely to begin to keep more oil to meet their own needs, reducing the amount of oil available for export markets. This is likely to lead to an earlier peak in energy avaiable to the UK economy from oil, followed by a sharper decline in oil availability.
When will Peak Oil happen?
Unfortunately, nobody is sure of the exact date, as reliable information on oil reserves and plans for new production are not available in the public domain. However, a consensus is forming amongst independent oil experts and oil geologists that the peak will occur between 2006 and 2012, and certainly within the next decade (a few years of hindsight is required in order to confirm the peaking point).
Despite this growing evidence, many governments (including the UK government) still deny that there is a problem. When asked for their estimate of the date of Peak Oil early in 2008, the UK government responded that they didn’t have one, and that they felt that supplies of gas and oil to the UK “are sufficient to sustain economic growth for the foreseeable future”. Based upon the evidence, we’d disagree.
What does this mean for Leicester?
The principal impact of Peak Oil will be sharply increasing prices for fossil fuels along with increased price volatility. This will seriously challenge the viability of motorised transportation within and serving the city, have a severe impact on the city’s energy-intensive businesses, and on the ability of householders to heat and power their homes. Conventional agriculture is also heavily reliant on energy from oil and other fossil fuels, so food prices are likely to increase significantly.
A further key impact is on the stability of our current financial system, which needs a growing economy to remain viable. Economic growth has been shown to be closely correlated with energy use. Oil shocks in the 1970s triggered recessions in the UK and around the world as the supply of available energy from oil declined. Economists have argued that an impact of Peak Oil could therefore be a profound and long-lasting economic depression.
What should we do?
Transition Leicester would like to encourage everyone in Leicester to take action to rapidly increase our city’s resilience to increasing fossil fuel prices and a potentially substantial economic downturn, so that as much as is feasible, Leicester can provide for its own essential needs.
Doing this would require a wide range of changes, such as:
- significantly increasing the quantity of food produced locally using sustainable agriculture (organic, or similar), including growing food within the city wherever possible.
- developing renewable energy sources within the city.
- improving infrastructure for cyclists so that the city can be safely navigated by cyclists of all ages.
- planting food-producing trees in the city, such as fruit and nut trees.
- undertaking a massive program of energy efficient refurbishment for the city’s dwellings and buildings.
- redesigning the economy in the city, so that Leicester businesses increasingly use local resources and local labour to provide services to local people