Energy is best defined as the “capacity to do work”; there cannot be life without it. That is simply what is meant by saying that life on planet earth will come to an end when the sun becomes so hot in a billion years or so that water on earth would evaporate and life on its surface will become impossible. Meanwhile the energy flows from the sun to the plants that sustain herbivores that in turn are eaten by carnivores and then at the top of this food pyramid the omnivores. This was the case for 100’s of millions of years. A most significant change started with the industrial revolution and it is still going on unabated, the use of machines powered by various forms of terrestrial energy. All machines are in essence dependent on coal, oil or electricity which is produced in most cases from fossil fuels.
The global economy consumes about 500 Quadrillion BTU’s each year and this level of consumption is projected to rise at about 1.4% every year for the next 20 years. Over 86% of all this energy comes from the three major fossil fuels of oil, coal and natural gas. All other forms combined (nuclear, hydro, biomass and all other renewable) account for less than 14% of energy consumption.
Oil supplies the largest proportion of energy in our industrial society and its role is looked upon as being the most crucial for civilization, so much so that a few are already predicting collapse of society as we know it when oil becomes scarce. Peak oil is the term used to describe what some of the best known geologists argue is inevitable. Peak is the point in time when the world would have used half of all the available oil reserves in the world. Whether we have passed the peak as of 2008 or whether we are to pass it in the next couple of years or even decade is not materially important. What is significant is that many, but not all, geologists, energy traders, oil company executives, academicians, environmentalists and common citizens have adopted the new paradigm of peak oil.
Even if we are to leave the issue of climate change aside for the purposes of this post yet it is clear that peak oil is a game changer. The world oil production is about 86-87 million barrels a day and the prestigious and mainstream IEA, International Energy Agency, projects the need for over 110 million barrels each day by 2030. If the world is already at peak then where is the additional oil going to come from? A quick survey of plans by the major oil companies of the world shows clearly that we are digging deeper and in more difficult terrain than we ever did simply because the low hanging fruits have already been picked, so to speak.
There are at least two important implications associated with peak oil. (1) The less the availability of conventional oil then the greater is the incentive to exploit the non conventional oil reserves like Venezuela’s heavy oil, Canada’s tar sands and eventually Colorado’s shale. Each of the above produces oil but at a much greater cost. (2) As conventional oil becomes less abundant; we have already lifted half of all the oil reserves; then again the energy return on investment ; EROI; will decrease and continue decreasing to the point whereby it would require more energy to lift a barrel than the energy embodied in that barrel.
The implications of the above two facts that result from peak oil are very clear. As the world demand for energy increases and the supplies cannot keep pace the resulting imbalances will play havoc with the price of oil. We have already witnessed what a slight shortage could do in 2008 when the price per barrel rose parabolic ally to over $140. Under the scenario of peak oil towards the end of this decade that previous price will be appreciably overshot. There are some who project a price of over $300 per barrel given the tight market conditions predicted by peak oilers.
Arab countries can very easily be producing about 30 million barrels of oil each day by 2020 if Iraq is to achieve its planned goal of 8 million barrels per day. Furthermore it would be easy to project exports of about 22 million barrels each day. If the above scenario is to play out and if the resulting economic crisis does not lead to the use of military force then the Arab oil exporters can expect an annual cash flow of over $1 Trillion. Could peak oil, a major challenge for most of the world be exceptionally beneficial to the Arab countries? And if so are they ready to absorb such flows of funds in order not to clog the international flow of funds.
Discussion
If you look at the history of energy consumption, particularly oil, you will find most developed nations (DN) nowadays consume or use half of energy used in past 20-30 years. This is due to efficiency, new and replacement technology, alternative energy ( wind/ solar, ocean waves, Nuclear, and others). Though most of the accelerated energy consumption ( coals/ oil, NG) are much from newly industrialized country (NIC0) and by 2050 the largest economies in the world will be as follows: China, USA, India, Brazil, and Mexico. The risks are there as you stated, and NICP will face the same if not worse experiences then DN. The MENA region continues to be place to harvest old and new energy not by choice but by default and other outside influences.
Cheers
Jamil
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Jamil,
Allow me to set the record straight , so to speak regarding efficiency.
Efficiency has alowed the industrial countries to decrease the energy input per $ of GDP produced but this does not mean that the overall use of energy has declined. Actually in most of the developed world the increased efficiency has meant a higher standard of living, larger GDP but more or less the same energy input. Countries vary but a good illustration might be the US , still the largest energy consumer in the world.in 1965 the US consumed about 6500 KFOE per capita per year and about 7800 kgoe per capita per year during 1990 and again 7800 kgoe per capita per year during 2004.
As you can see a greater level of consumption was attained but at the same level of energy use per capita which is totally explained by efficiency gains.
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The Capitalist economy depends on cheap oil.
Originally Capitalism took off in the industrial Revolution by using coal.
Without Coal there might not have been industrial capitalism. And Coal burning was the beginning of the greenhouse effect.
One major source of the boom after World War 2 was turning widespread use of cheap oil.
In short, our entire way of life, our whole society, our food, clothing, shelter, has been built on cheap oil. If petroleum became expensive and or scarce then all industry, the economy, and society have to be reorganized. This is what we are now facing.
The Problems of being dependent on Cheap oil.
There are difficulties in being so completely dependent on petroleum oil. The first is that it is limited. Oil is “nonrenewable resource”. Sooner or later we will run out of it. More significantly, sooner or later we pass this point of “peak oil”. This is the point were half the amount of oil in the ground has been used up. This point has been passed in continental US and may be around it on a world scale. Meanwhile there has been an increase in the demend for oil as the demand for oil as the world’s population increases and as oppressed nations (the “Third World”) attempt to industrialize.
That does not mean that there is no oil. There is plently still left. But it becomes harder to get at that oil. Once all that was necessary was to stick a pipe into the ground at the right place and oil would gush out. Now we have to set up huge floating rigs way out in the ocean and drill a mile down below the sea surface and then a mile or more below the sea floor. This was what was done at BP’S site in the Gulf of Mexico.
The second set of problems with dependence on oil is that it is polluting. Humans, other animals, and plants did not evolve to function in a world with oil and plastics in the environment. Burning it puts particles in the air. It poisons us, creates asthma and cancers. Plastics are “nonbiodegradable” once “thrown away” plastic material last forever. Pesticide residue is poisonous to people and other animals. And right now we are just beginning to see the disasterous consequences.
Disaster are rationalized as accidents such as BP or the Exxon Valdez events.
Finally, there is the effect of global warming, climate change. More than just pollution, this throws the whole worldwide climate out of balance. It is melting polar ice and ice caps on mountains. It is raising the level of the sea and will drown islands and coasts and the peoples who live there. It will spread deserts and cause famines. In short, it will be a civilization-wide disaster.
Another difficulty is that oil, like many other natural resouces, is not evenly distributed around the world. A few places have a lot and most places have non. This has played into imperialism, wars, and corrupt dictatorships. For example, the US is fighting in Iraq(which has the world’s second largest oil deposits) and Afganistan which has piplines for natural gas go through it.
The use of oil and other fossil fuels has been essential to the last period of capitalist prosperity and now threatens disaster both ecologically and economically.
Mr. Karam, before addressing the oil flows that will benefit the Arab world let us sit back for a second and ask ourselves how will the Mother earth look like in 2030.
The unintended consequences will be the follwing if the current status quo prevails.
We will be using gas masks at all times since weather will be extremely polluted and if the current economic system survives then I’m afraid wealth inequality will reach new dangerous hights. One word the world as we know will not be uninhabitable…..
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Sebouh,
zThere is no doubt that the ecological implications are huge but as you might recall I specifically said that some Peak Oilers think that the world will encounter collapse if it fails to resolve the energy issue. But as well as you know one cannot deal with all of these issues in under 1000 words . That was the reason for asking the reader to put aside for the time being the environmental impact of cheap oil.