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Energy Insights: Energy News: Peak oil: preparing for the extinction of 'petroleum man'

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Peak oil: preparing for the extinction of 'petroleum man'



Oil rig
by James Morgan
Oil rig

...planning for [peak oil] should not pose a problem. Problems arise because there are so many stakeholders who are unwilling to change. They refuse to take the actions that are necessary because they don’t want to jeopardise their profits.

Professor Kjell Aleklett

Professor in Global Energy Systems Kjell Aleklett, President of the Association for the Study of Peak Oil and Gas (ASPO International), explains how we can prepare for the ‘second half of the age of oil’...

At the turn of the century, certain sections of the scientific community noticed a small but ominous speck on the horizon. Over the years, this speck has advanced, revealing itself as a hulking great obstacle that casts a shadow of uncertainty over our collective energy future. The speck has been replaced by something nearer and altogether more tangible. We now have an elephant in the room, and its name is peak oil.

 So, what is peak oil? In short, peak oil will occur when the extraction rate of this resource ceases to rise. Typically, this point is reached when half or less of a natural commodity has been removed. It is the peak of the bell curve; the point at which the tail is longer than the rise to the top.

 Last month, Time reported that peak oil had been certified dead by the International Energy Agency (IEA). It seems that unconventional energy sources in North America have delayed the onset of peak oil. To proclaim that peak oil is dead, however, is a little misleading. It would be more accurate to say that peak oil is dormant, or at least, that the rate at which oil is extracted is likely to continue on a bumpy plateau for longer than anticipated.

 Of course, it is possible to argue over the exact point at which global peak oil will arrive, but at some time in the not too distant future, we are going to have deal with this problem. Oil is a finite resource and as such, it cannot sustain indefinite extraction.

Oil well

 The term peak oil was coined by Dr Colin J Campbell and Professor Kjell Aleklett in 2000. Soon after, the pair – together with some of their peers – founded the Association for the Study of Peak Oil and Gas (ASPO International): a network of academics committed to the investigation of this event and its associated consequences.

 In an interview with, Professor Aleklett, ASPO President and Professor in Global Energy Systems at Uppsala University, explained more about when peak oil is likely to occur, and how we should prepare for the extinction of ‘petroleum man’…

Oil well
The term 'peak oil' refers to the end of increasing oil production, not the complete exhaustion of oil fields
Could you begin by explaining why it has proven so difficult for experts to agree upon a definition of peak oil?
 As we were the ones who invented the term, I think it’s only fair that we should be the ones who get to define what it means. Peak oil is the point at which maximum production of oil is reached. Of course, its exact definition depends on how the term is being used. For instance, the term peak oil could be used in a global sense, or it could refer to production within a particular region.

 It is important to note that peak oil is not the end of oil; it is the end of the increase in the production of oil. The extraction of oil in the North Sea offers a very clear example. Evidence shows that the rate of production within this region ceased to increase in 2000. This rate is now declining dramatically. Peak oil for the North Sea, therefore, occurred at the turn of the century.

To what extent is it difficult to predict when global peak oil is likely to occur?

We have a pretty good idea of when this is going to happen. You must remember that so far, we’ve been removing crude oil; a type of oil that is very easy to extract. When Dr Colin Campbell and I made our predictions, we hypothesised that in 2004, conventional crude oil would reach its peak in production. As it transpired, this peak occurred in 2008. In principle, we were right. Everybody agrees that conventional crude oil production has reached its maximum, and that it can never be restored to its former levels.

 However, we also have to account for other types of oil. Hydraulic fracking operations in the United States and the exploitation of Canadian tar sands, for example, are influenced by the oil price. If the oil price is low, production rates fall; if it is high, they rise.

So, is it possible to predict when the global peak – across all types of oil – will occur?

 Dr Colin Campbell and I had the first-ever peer-reviewed paper published on this subject just over 10 years ago. In this paper, we predicted that peak oil would occur between 2009 and 2013. We also estimated that production at the time of the peak would be around 85 million barrels per day.

 When our paper was first published, we were widely painted as the crazy guys who didn’t understand anything. The IEA and the US Energy Information Administration (EIA), for example, suggested that by 2010, oil production would reach 95 million barrels per day. It turns out that we were the ones who were right.

 I should point out that this is production as defined by statistical review. For some people, production is not production: it is consumption. When oil goes through a refinery, many things are added to it. Consequently, the volume of oil that comes out of a refinery is greater than that which goes in. However, I would argue that to count the end product rather than the material that is extracted from the ground is a form of double counting.

How have attitudes shifted since you first made your predictions?

Attitudes have changed considerably. Traditionally, economists have stated that if the price of a commodity is high, you should be able to produce more of it. However, this doesn’t necessarily hold true for a finite resource. Previous IEA and EIA estimates suggested that by 2030, oil production would have reached 120 million barrels per day. They have since revised their estimates to 95 million barrels per day: a reduction of 25 million barrels per day. All the while, the price of oil remains high. According to the traditional model, the rate of production should be increasing, but it is plateauing. This, I believe, is a strong indication that the way in which their estimates are being formulated is fundamentally flawed.

Assuming that your calculations are correct and that global peak oil is imminent, why should we be worried? What, in your opinion, are the major difficulties that this situation is likely to create?

Fracking drill
 The modern global economy has never undergone a period of significant expansion without an increase in the use of oil. My colleagues and I are currently working with researchers at the International Monetary Fund (IMF) to explore the implications of the relationship between these two factors. It is absolutely clear that a decline in oil production will damage the global economy. Of course, if the economy isn’t functioning as it should, it has knock-on effects for society as a whole.

 Look at the problems that have resulted from the economic crash of 2008. Many people in Europe are already struggling to pay their oil bills because the price is so high. This, in turn, creates further challenges. Because the input cost is high, it is more expensive to fuel your car. This means that it is difficult to drive to the shops and buy things. In this type of environment, you tend not to do as many things as you would if the oil price were lower.

Fracking drill

Unconventional energy sources in North America, such as hydraulic fracking in the US and tar sands in Canada, appear to have delayed the arrival of peak oil

You have spoken previously about humankind’s transition to ‘the second half of the age of oil’. How might our daily lives alter during this era?

 We’ll have to start thinking locally in terms of food production. We have already seen the establishment of companies that produce food for consumption within particular localities. Such ventures have proven very successful. Even though it means higher prices in the short term, lots of people like to buy sustainably sourced, local produce. I think that this mindset will become increasingly important in the future.

 What’s more, this type of locally oriented system is achievable. By my calculations, we should be able to feed the global population to a decent standard with only 30 per cent of the energy that we use at present. Such a transition would require no more than an annual two per cent reduction in usage; maybe less. If society is aware of what it needs to achieve, planning for this eventuality should not pose a problem. Problems arise because there are so many stakeholders who are unwilling to change. They refuse to take the actions that are necessary because they don’t want to jeopardise their profits.

How can individuals prepare themselves for this transition?

 We need to adjust our habits in order to adapt to lower energy consumption. People can insulate their houses, for example, or change their cars. These things don’t necessarily have to be done right now, but we need to make clear plans. We must accept the fact that in the future, we will be using significantly less energy than we do today.

Do you think that sufficient measures are being taken by policymakers to plan for our transition to the second half of the age of oil?

 No. It is clear that in this respect, we have a big problem. It is very difficult for any politician to admit that something is wrong, and that we might need to do something about it. If they were to do this, another politician would come along and say, ‘There’s no problem; vote for me and we can carry on as we are’.

This is the democratic dilemma. Drastic action is necessary, but it is very difficult to achieve. Education will be crucial if we are to succeed in implementing the required measures. Alternatively, it might take a crisis to precipitate change.

Are you optimistic about the future? Do you think that politicians will, at some point, address the problem of peak oil?
 I’ve been working in this field for many years now, and it’s sad to see how little has been done. The measures that have been taken have been implemented largely because of climate change. Energy challenges such as peak oil are closely linked with climate-related issues, so victories within the field of climate change tend to be victories for peak oil as well. The good news is that we have started to tread the right path. Ultimately, we have to act. Whichever way you look at it, we won’t be able to use as much energy in the future as we do today.

If you’re interested in learning more about peak oil and the consequences that are likely to result from its occurrence, check out…

Peeking at Peak Oil by Kjell Aleklett is published by Springer, and is available now from leading book retailers. World Oil called it "…required reading for anyone seriously interested in the future world energy market and economy, especially politicians and policymakers."

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