National Commentary

The Peak Oil Crisis: After The Peak?

I am frequently asked “What is going to happen to us?” and the honest answer of course is we really don’t know in any detail. The world has never been to peak oil before and there are so many factors that will affect a world in oil depletion, it is difficult, or better yet nigh impossible, to paint a picture of what life will be like 10 or 20 years from now.

However, as we get closer to the times when the real troubles stemming from the decline in oil availability begin, a broad outline of what could happen is starting to emerge. Throw in some logical deductions and a fragmentary insight or two starts to emerge.

First the overall magnitude of a swift transition from oil and natural gas to other, less plentiful, forms of energy is almost certain to be a very big problem. Most commentators on life with diminishing supplies of oil conclude it will take decades to transition our lifestyles to those of a more sustainable civilization and that there are some very hard times ahead.

Many commentators now have noted that the speed at which our oil supplies diminish will have much to do with how tough the situation becomes. Slow depletion would give us a one-time opportunity to “make other arrangements” while rapid depletion screams “Gotterdammerung.”

Among the recent insights into what is about to happen is the likelihood that the major oil-importing counties, especially the United States, will have to contend with “peak exports” as well as oil depletion. This means that no matter what the rate world oil production declines — 4, 5, 6 or more percent a year — the importing countries will have to contend with a rate of decline far worse due to the inability to find oil available for import.

The implication here is that we are going to have rapidly falling oil and gas imports no matter what happens to world oil production. Indeed there is evidence that world oil exports are already falling and that the importers are starting to live off of their stockpiles — a situation that will not last for long.

If exports do start to drop, the U.S. will quickly become highly vulnerable. It is time to start thinking that five years from now we will be importing significantly less oil and gasoline than the 12 million barrels a day we currently import. For the sake of argument let’s say that by 2012 we can only find 9 million barrels a day to import — a not unreasonable proposition. Domestic production 5 years from now looks like it will be roughly the same or down a bit so we are going to have to do with less.

From here we could explore many possible outcomes, but the private automobile is obviously where the biggest blow will fall first. I have no idea where gasoline prices will be five years from now but they will obviously be higher. We probably should be thinking dollars higher rather than cents.

Somewhere between now and the day when we only import 9 million barrels of crude and products, we are going to have to confront the issue of who gets how much.

This will rapidly become a political question that will quickly surpass every other political issue of the day by many orders of magnitude. If you think the American people are upset about Iraq, abortion, immigration, taxes and pistols, just wait until the politicians start talking about who gets how much gasoline and diesel fuel. It is going to be something to watch.

Now, as a nation, we could simply do nothing and let many-dollars-per-gallon sort out the allocation, but I suspect this is not going to work. Too many vital functions of our civilization such as food production and distribution or health and sanitation will be disrupted and a clamor will arise for government at all levels to do something. Although the intensity of the debate will be unprecedented, I suspect that the pains of disruption will soon reach a threshold where a compromise is reached and some scheme for the “allocation” of liquid fuels is established.

It will soon become apparent that bottom priority for distributing liquid fuels will be filling the tanks at your local gasoline station and marina.

This line of reasoning suggests that while the availability of petroleum products in the U.S. may be down by three million barrels per day (b/d) from 21 million to 18 million, there will be a disproportional impact on the 9+ million barrels of gasoline we consume each day.

As we currently have no idea how a liquid fuel allocation scheme would work, it is difficult to calculate or guess at what is going to happen to the gasoline available for sale to the general public. I would suspect, however, that we should be thinking of a cut on the order of 50 percent from the current rate of consumption.

If a cut in gasoline availability of this size does not occur in the next five years, just be patient, it won’t take much longer once oil depletion and export limitation sets in.

All this is by way of saying that when you throw in “peak exports,” the oil depletion situation takes a rapid and sudden turn for the worse. With world oil prices now in the $90s and the prospect of higher gasoline prices this winter, we are clearly feeling the opening tremors of much worse to come.

A cut of 50 percent in the availability of gasoline does not bring civilization to halt for there are many acceptable alternatives such as public transit that can result in major savings. I suspect we all have some sort of carpools in our future, not just for getting to work, but for inter-city travel and the errands of daily life. Just as empty seats on airplanes are now few and far between, so too will be empty seats in cars.