permaculture

[lbsaltzman@aol.com]

I think this essay by Lester Brown speaks to this debate.  And it will take 
one action to make this discussion moot. The day the U.S. attacks Iran kiss 
cheap oil goodbye and welcome the depression as they mine the Straights of 
Hormuz.

Earth Policy Institute
Plan B Update
Embargoed for November 15, 2007, 11:00 AM EST

IS WORLD OIL PRODUCTION PEAKING?

http://www.earthpolicy.org/Updates/2007/Update67.htm

Lester R. Brown

Is world oil production peaking? Quite possibly. Data from the International 
Energy Agency (IEA) show a pronounced loss of momentum in the growth of oil 
production during the last few years. After climbing from 82.90 million 
barrels 
per day (mb/d) in 2004 to 84.15 mb/d in 2005, output only increased to 84.80 
mb/d in 2006 and then declined to 84.62 mb/d during the first 10 months of 
2007.

The combination of world production slowing down or starting to decline while 
demand continues to rise rapidly is putting strong upward pressure on prices. 
Over the past two years, oil prices have climbed from $50 to nearly $100 a 
barrel. If production growth continues to lag behind the increase in demand, 
how 
high will prices go?

There are many ways of assessing the oil production prospect. One is to look 
at 
the relationship between oil discoveries and production, a technique 
pioneered 
by the legendary U.S. geologist M. King Hubbert. Given the nature of oil 
production, Hubbert theorized that the time lag between the peaking of new 
discoveries and that of production was predictable. Noting that the discovery 
of 
new reserves in the United States peaked around 1930, he predicted in 1956 
that 
U.S. oil output would peak in 1970. He hit it right on the head.

Globally, oil discoveries peaked in the 1960s. Each year since 1984, world 
oil 
production has exceeded new oil discoveries, and by a widening gap. In 2006, 
the 
31 billion barrels of oil extracted far exceeded the discovery of 9 billion 
barrels.

The aging of oil fields also tells us something about the oil prospect. The 
world’s 20 largest oil fields were all discovered between 1917 and 1979. (See 
data at http://www.earth-policy.org/Updates/2007/Update67_data.htm) Sadad 
al-Husseini, former senior Saudi oil official, reports that the annual output 
from the world’s aging fields is falling by 4 mb/d. Offsetting this decline 
with 
new discoveries or with more-advanced extraction technologies is becoming 
increasingly difficult.

Yet another way of assessing the oil prospect is to look separately at the 
leading oil-producing countries where production is falling, the ones where 
production is still rising, and those that appear to be on the verge of a 
downturn. Among the leading oil producers, output appears to have peaked and 
turned downward in a dozen or so and to still be rising in nine.

Among the post-peak countries are the United States, which peaked at 9.6 mb/d 
in 
1970, dropping to 5.1 mb/d in 2006; Venezuela, where output also peaked in 
1970; 
and the two North Sea oil producers, the United Kingdom and Norway, which 
peaked 
in 1999 and 2000.

The pre-peak countries are dominated by Russia, now the world’s leading oil 
producer, having eclipsed Saudi Arabia in 2006. Two other countries with 
substantial potential for increasing output are Canada, largely because of 
its 
tar sands, and Kazakhstan, which is developing the Kashagan oil field in the 
Caspian Sea, the only large find in recent decades. Other pre-peak countries 
include Algeria, Angola, Brazil, Nigeria, Qatar, and the United Arab Emirates.

Among the countries where production may be peaking are Saudi Arabia, Mexico, 
and China. The big question is Saudi Arabia. Saudi officials claim they can 
produce far more oil, but the giant Ghawar oil field—the world’s largest by 
far 
and the one that has supplied half of Saudi oil output for decades—is 56 
years 
old and in its declining years. Saudi oil production data for the first eight 
months of 2007 show output of 8.62 mb/d, a drop of 6 percent from the 9.15 
mb/d 
of 2006. If Saudi Arabia cannot restore growth in its oil production, then 
peak 
oil is on our doorstep.

In Mexico, the second-ranking supplier to the United States after Canada, 
output 
apparently peaked in 2004 at 3.4 mb/d. U.S. geologist Walter Youngquist notes 
that Cantarell, the country’s dominant oil field, is now in steep decline, 
and 
that Mexico could be an oil importer by 2015. Production in China, slightly 
higher than in Mexico, may also be about to peak.

A number of prominent geologists are convinced that global oil production has 
peaked or is about to do so. “The whole world has now been seismically 
searched 
and picked over,” says independent geologist Colin Campbell. “Geological 
knowledge has improved enormously in the past 30 years and it is almost 
inconceivable now that major fields remain to be found.”

Kenneth Deffeyes, a highly respected geologist, said in his 2005 book, Beyond 
Oil, “It is my opinion that the peak will occur in late 2005 or in the first 
few 
months of 2006.” Youngquist and A. M. Samsam Bakhtiari of the Iranian 
National 
Oil Company each projected that production would peak in 2007.

The Energy Watch Group in Germany, which recently analyzed oil production 
data 
country by country, also concluded that world oil production has peaked. They 
project it will decline by 7 percent a year, falling to 58 mb/d in 2020. 
Bakhtiari projects a decline in oil production to 55 mb/d in 2020, slightly 
lower than the German group. In stark contrast, the IEA and the U.S. 
Department 
of Energy are each projecting world oil output in 2020 at 104 mb/d.

The peaking of world oil production will be a seismic event, marking one of 
the 
great fault lines in world economic history. When oil output is no longer 
expanding, no country can get more oil unless another gets less.

Oil-intensive industries will be hit hard. Cheap airfares will become 
history, 
for instance. The airline industry’s projected growth of 5 percent a year 
over 
the next decade will evaporate. The food industry will be severely affected 
by 
rising oil prices, since both modern agriculture and food transport are 
oil-intensive. The automobile industry will suffer as well when demand for 
cars 
plummets. Pressures will intensify on the three or more major auto companies 
that are developing plug-in hybrid cars that run largely on electricity to 
bring 
them to market quickly.

Higher oil prices have long been needed both to more accurately reflect the 
indirect costs of burning oil, such as climate change, and to encourage 
more-efficient use of a resource that is fast being depleted. While higher 
prices are desirable, the rise should not be so abrupt that it leads to 
severe 
economic disruptions.
    
Some countries are much more vulnerable to an oil decline than others. For 
example, the United States—which has long neglected public transportation—is 
particularly vulnerable because 88 percent of the U.S. workforce travels to 
work 
by car.

Since options for expanding supply are limited, efforts to prevent oil prices 
from rising well beyond $100 per barrel in the years ahead depend on reducing 
demand, largely within the transportation sector. And since the United States 
consumes more gasoline than the next 20 countries combined, it must play a 
lead 
role in cutting oil use.
    
A campaign to reduce oil use rapidly might best be launched at an emergency 
meeting of the G-8, since its members dominate world oil consumption. If 
governments fail to act quickly and decisively to reduce oil use, oil prices 
could soar as demand outruns supply, leading to a global recession or -- in a 
worst-case scenario -- a 1930s-type global depression. 

#    #   #

Lester R. Brown is President of the Earth Policy Institute and author of Plan 
B 
3.0: Mobilizing to Save Civilization (forthcoming).

Data and additional resources at www.earthpolicy.org.

For information contact:

Media Contact:
Reah Janise Kauffman
Tel: (202) 496-9290 x 12
E-mail: rjk (at) earthpolicy.org

Research Contact:
Janet Larsen
Tel: (202) 496-9290 x 14
E-mail: jlarsen (at) earthpolicy.org

Earth Policy Institute
1350 Connecticut Ave. NW, Suite 403
Washington, DC  20036
Web: www.earthpolicy.org



-----Original Message-----
From: Toby Hemenway <toby@patternliteracy.com>
To: SArjuna@aol.com; permaculture <permaculture@lists.ibiblio.org>
Sent: Thu, 15 Nov 2007 12:10 pm
Subject: Re: [permaculture] Toby- Re. "Apocalypse Not" - How do you see it 
presently?



Dear Shivani,
Thanks for writing. At some point I'll have to do a follow up to 
Apocalypse, Not" since my thinking has evolved some, and there were 
ome points that were misunderstood in the article. I'm no optimist--I 
ave always thought that the next 30 years are going to be pretty rough, 
ut I can't get on the doom bandwagon, still. I have studied complex 
daptive systems (our civilization is one of those) since the 1970s, and 
t is naive to think that there is a linear relationship between energy 
nputs and complex system outputs. I am  actually more excited than I 
as about the opportunities of the next couple decades, although I'm 
ery aware of the inevitable large-scale suffering we'll see, too. But 
ot everyone gets to see their culture make an enormous shift.
I'll just revisit those 5 points briefly.
> *1. Our demand for oil is unchangeable and is not significantly 
 affected by price. * /[It hasn't been so far, even though the price 
 has climbed steeply.  The poorest countries, however, are already 
 suffering plenty, as they can no longer afford the energy needed to 
 support their infrastructures.]
 /
il prices are still, adjusted for inflation, below their 1980 record 
rice. So we've had 27 years to get complacent and to adjust to a 
oderate increase in price, as well as learning to live with the unheard 
f volatility of the last couple decades. The rise from $60 to $90/bbl 
s nearly entirely due to speculation and is viewed by most oil pros as 
imple volatility; real shortages are not here yet. Oil is still cheap, 
o I don't expect a lot of change in behavior until we have averaged 
110/barrel or maybe much more, for some months or more--we've been in 
he 90s for just a few days. And demand in the last few weeks has 
ropped by about 4%, says the Wall Street Journal.
We're still very, very early in the Peak cycle. We are still on the 
pward curve. The dynamics of rounding the top are going to be very 
ifferent. Check out HT Odum's "A Prosperous Way Down" for some very 
ophisticated thinking by a brilliant systems ecologist. He describes 
ow our culture is optimized for growth, and how it needs to, and 
an--if other complex systems are any guide--shift to optimize for the 
rounding the top" phase. That's something a lot of doomers miss: They 
hink we'll go right from an upward curve to a downward one. I think 
e're just now getting to the top-rounding phase, and we'll be in it for 
0 years or so. That seems to explain why some say the Peak has already 
appened and why others give dates from now through 2030. It's a broader 
eak than most people are aware of. The shift in the curve's shape from 
ear-straight to round will trigger dynamics that many Peak-Oilers 
ren't considering.
 /
 /*2. We are so badly addicted to oil that we will watch our 
 civilization collapse rather than change our behavior.*  /[Certainly 
 no good news yet.   If the U.S. Dept. of Enrgy report that said we'd 
 need a decade of flat-out nationwide effort before peak, "or the 
 problem will be pervasive and will not be temporary" is accurate, we 
 are in for it.]
 /
gain, we're not at a point where we're getting much direct feedback 
rom shortages. But the energy situation is one of the biggest topics in 
very major publication. I see an enormous shift in consciousness around 
nergy awareness. Read the business press and count how many articles 
re on energy compared to, say, 3 years ago. Even conservative 
ublications are reporting energy news, along with global warming. 
wareness is the first step toward action. No promises, there, but I see 
t as a very good sign.
 /
 /*3. Significant oil conservation is not possible in the time frame 
 needed**/. /*/ [We haven't even begun to conserve.]
 /
See point 1. We began conserving in 1974 with the doubling of gas 
ileage that occurred over the next 8 years. Energy star products. 
igh-efficiency furnaces. I could list thousands of ways we conserve 
nergy compared to 1970. Per capita energy usage is way down; WSJ says 
orporations worldwide are using 71% less energy to manufacture the same 
mount of goods as in 1980. SUV sales have plummeted in the last 18 
onths. High mileage car sales are up hugely. Do some homework around 
hat point--to say we haven't begun to conserve is simply wrong. That's 
hy demand has, in effect, so outpaced the change in supply: 
onservation has freed up much more oil available for new markets to 
emand. And again, there's been little real push from prices to conserve 
or 25 years.
 /
 /*4. Even with conservation, demand will be more than oil plus 
 alternatives can possibly meet*/.  ["Dampening" of demand occuring in 
 poor nations  is the only factor lowering demand so far.   
 Alternatives have not added anything significant yet, but have 
 threatened world food supplies.  Production has been flat since about 
 the time you wrote the article.  Conservation is still just a gleam in 
 the eye of idealists.  Only demand has increased significantly.
 /
Really, your time frame is too short (we're all so impatient for this 
ollapse to get on with itself, aren't we? Myself included!). Oil prices 
eed to get to unseen levels and stay there for demand to change. The 
hinese, for example, are subsidizing oil to build their economy, so of 
ourse demand there is going to go up. At some point the subsidies will 
nd and reality will set in. For the Chinese, that may not be pretty, 
nless they can quickly restore their agrarian base. This is probably 
he point I'm least confident about. The rush of the BRIC nations to 
uild oil-dependent infrastructure in the last 2 years has been a truly 
oronic course of action. But I still have a good deal of faith in the 
elationship between supply, demand, and price--or else most of 
conomics is wrong. Demand destruction will of course occur first in 
oor nations; they have the least flexibility. I think we're next. Be 
atient.
 /
 /*5. Society is so fragile that it cannot withstand large shocks.*
 /[Previous complex societies have collapsed under multiple stresses, 
 as outlined in  Tainter's book, //The Collapse of Complex 
 Societies.    With peak oil, global climate change, an economy running 
 on fumes.... our society is facing more large stresses than others 
 that succumbed to fewer. No complex society has lasted long, due to 
 the fragility caused by complexity.  And no society has been as 
 complex as ours.]
 /
Are our stresses larger than others? Rome faced multiple invasions, 
otal collapse of agricultural soils, enormous costs of colonies, 
enerations of incompetent rulers, a tax system that bankrupted the 
ountryside, and more, and it still took 300 years to collapse. I think 
hose are larger stresses than the ones we face.  Civilizations can take 
uge shocks in stride: remember than the Black Death was followed in 40 
ears by the Renaissance; that Rome went to the brink of collapse at 
east twice and recovered--and that the Eastern Roman Empire really 
ever collapsed; much of that culture still exists.
The idea that complex systems are fragile is dead wrong. They are 
emarkably robust and far more resilient than simple ones. Tainter does 
ot say that complexity is fragile, and neither does anyone who studies 
omplexity. What Tainter says is that increases in complexity eventually 
ring diminishing returns, and that leads to collapse unless a new 
ource of energy to support the complexity is found (e.g., the discovery 
f the New World, oil, conquest). Tainter, however, ignores the free 
ide given by self-organization, and our culture is hugely 
elf-organizing. That will shift the diminishing returns curve and offer 
uite a bit more resilience. That's something I plan to write about at 
ome point. Tainter also points out that collapse usually takes the same 
mount of time as the upward trajectory. Sure, this civilization will 
nd, and I hope it does  (that's probably been the biggest shift in my 
hinking since the article: a better grasp of why civilization is both 
nsustainable and ruinous to the human spirit). But collapse will 
robably take another couple centuries if the past is any guide.
Don't take this as optimism. There's a lot to worry about. Oil is a 
igh-quality energy source that is roughly 50,000 times more easily 
onverted to work than solar (see Odum's work on transformity), so we've 
ot a big downshift to do. But I still only give the "death of billions" 
cenarios about a 15% chance in my lifetime.
Toby
ttp://patternliteracy.com
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