National Commentary

The Peak Oil Crisis: An Announcement

With little fanfare, a press release appeared last week on the website of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES). The release said that during a meeting between Chris Huhne, the UK’s Secretary of State for Energy and Climate Change, and representatives of ITPOES, an agreement had been reached that Her Majesty’s Department for Energy and Climate will collaborate with ITPOES on a joint examination of concerns that global oil supply will begin to fall behind demand within as little as five years. This collaboration is seen by the British government as the first step in the development of a national peak oil contingency plan.

There are many implications buried in this seemingly innocuous announcement. First, American readers should note that the British government recognizes that energy policy and climate change are inextricably linked so that you cannot formulate policies for one without the other. The major step forward, however, is the official and semi-public recognition by a major government that global oil supplies will fall behind demand in as little as five years. After years of official denial this is indeed a breakthrough worthy of note.

Gone is the rhetoric about the billions of barrels of oil remaining that will last for so many decades that nobody alive today needs to worry. Official recognition has been given to the concept that the remaining oil will be so expensive to extract or will be locked into the earth by intractable political disputes, so that it simply will not be available in the unlimited quantities or at the prices we have known for the last 100 years. Also implicit in the announcement is that ever-rising real energy costs will destabilize nearly all of the world’s economies and that economic growth in the form we have come to know it will no longer be possible.

What will be the role of government in holding society together during transition to the post carbon age?

Now, announcing that you are going to study something is a long ways from having a plan to deal in a realistic manner with a problem of this magnitude, but it is clearly a step forward and positions the British months or more likely years ahead of their American cousins in thinking about the problem. It will be interesting to follow whatever is made public about the discussions and just what a British plan to deal with peak oil and climate change will look like. It is also interesting that the announcement that the world-as-we-know-it will come to an end shortly was announced on an obscure website with minimal attention.

Without prejudging what the British will come up with as a plan to deal with peak oil, it might be useful to set out the problems that a plan to govern the transition to the post carbon age will have to deal with.

First of all, there are far too many people in nearly every country of the world that are dependent on a very complex supply chain to bring them the necessities of modern life – food, shelter, clothing, medicine, education, and some form of entertainment and recreation – to make a return to 19th century practicable. There are simply too many people and not enough arable land left in the world. This implies that for the coming decades, the best solution for the world’s peoples is to shelter-in-place. While there may be limited opportunities to migrate, these will become increasingly difficult to find. Oil-fueled transportation will become expensive and governments will be taking whatever measures are necessary to stem unauthorized cross-border migrations. Some intra-country movement will have to take place as regions become uninhabitable for most due to climate change.

This raises the key issue of the next few decades – What will be the role of government in holding society together during the transition to the post carbon age? A corollary issue will be how well current systems of finance, industrial organization and capital formation will function during what is likely to be a prolonged period of economic decline as fossil fuels and then many other resources become scarcer and much more expensive. As people naturally prefer to stay with accustomed life styles and ways of doing things as long as possible, there will inevitably be a period of political controversy between those who have come to recognize that major changes in our civilization must take place if society is to survive in a recognizable fashion and those who will cling to the familiar until overcome by events. Indeed, the opening rounds of this debate have likely started already in the controversies over global warming, jobs, taxes, deficits, and sovereign debts.

In the United States a great political debate is taking place on 20th century terms with discussion focused on reviving economic growth, cutting federal deficits, and stimulating spending. In the 21st century, an era of depleting resources, much of this debate is no longer relevant. Efforts to create jobs in traditional ways in what will soon be a steadily contracting economy will need to be rethought and new ways of creating new kinds of jobs will be necessary to keep complex societies functioning. Whether the lead will be taken by free enterprise or will fall to governments by default is yet to be seen.

There will be many other issues besides the creation of jobs, and supplying goods and services in the coming transition. Some of these issues are not yet apparent and some will not be recognized for years. What is obvious, however, is the faster people and their governments recognize the real nature of the problem and start working on real solutions the better off we and succeeding generations will be.

For now we can only thank Her Majesty’s government for taking some sort of a lead and hope that others will follow soon.


Tom Whipple is a retired government analyst and has been following the peak oil issue for several years.