Peak Oil
When EAFL held England's first major conference on peak oil in October 2005 (in partnership with CRED and Powerswitch), the term Peak Oil meant nothing to most people. Since then the issue has risen up the political agenda and many people are engaging with this urgent issue.
The world has finite resources of oil (as well as gas, coal and other fossil fuels). World oil production has risen rapidly over the last 100 years, in line with population growth and economic growth. However, production from individual countries, such as the USA, UK or Norway, has peaked - that is to say, it has levelled off and then declined. For example, the UK's North Sea production peaked in 1999 and is currently reducing at the rate of about 8% per year.
Production from other countries is bound to peak in the same way, and therefore total world oil production must also peak and then decline. There is a degree of disagreement as to when this will happen, but even the most optimistic forecasts put it no more than 20 years into the future. Careful analysis of reserves and actual production, country-by-country, by organisations like ASPO suggests that it is much more likely that the peak is imminent.
Oil and Food
At the time of writing - spring 2008 - the broadsheet press (and particularly the Financial Times) is full of stories of food shortages and food riots spreading across the world. The price of wheat, rice and other staple foods has doubled in a year - with huge impacts for those families who now spend over half their income on food.
There are a number of reasons for this food shortage, and the UN's Food and Agriculture Organisation sees no respite for at least 10 years. But chief among them is the rising price of oil. The best-publicised effect of this has been the diversion of food crops (or the arable land used to grow them) to producing biofuels. This type of biofuel production is deeply harmful (in terms of climate change as well as poverty) and NGOs like EAFL have been arguing against it for a number of years. Thankfully there are now signs of a political will to act against biofuels.
However, biofuels are only one aspect of the problem. Oil and gas are needed for every stage of the modern food system. Gas is used to make nitrate fertiliser - the price of which rose 80% between 2006 and 2007, and anecdotally is up another 100% for 2008. Oil is used to manufacture pesticides, drive tractors, and drive produce to market. Fossil fuels of all kinds are used to generate electricity for food processing (canning, freezing, manufacturing etc), and to refrigerate food in storage, in retail outlets and in the home.
As oil prices rise, the cost of all these activities increases. Already small subsistence rise farmers in Asia are reducing their use of fertilisers. Poorer people in many developing countries are reducing their consumption from three meals a day to two, or from two to one.
The problem will be compounded - even in wealthier northern countries - by the economic impacts of peak oil. Consumers will be faced with the twin pressures of having less money coming in (particularly if they have lost their job as a result of recession) while at the same time having to pay much more for food.
It is essential that the world begins to put in place a Resilient Food System - one that will withstand the shocks and risks that are likely to face us over the next few years.
Topical Issues regarding Peak Oil
Some of the current topical issues relating to peak oil include:
- Conventional crude may have peaked. Data for total world conventional crude oil production from the US Government's Energy Information Administration shows that production has been almost constant from 2005 through 2007. The peak reached in May 2005 was only briefly surpassed in January 2008 - but Matt Simmons points out that this only happened because the EIA's figures include oil from tar sands in the "conventional crude" figure, whereas tar sands are NOT conventional crude. It is possible that conventional crude will turn up again, but equally possible that it is now on the final plateau before beginning its irreversible decline. The "total liquids" available to the world have risen slightly, but only by increased use of biofuels, tar sands and other "unconventional" oil sources. It is not credible that these "unconventional" sources could ever replace more than a small fraction of the conventional oil we have been using.
- Net energy may be reducing faster than total oil production. Getting oil out of the ground takes energy, and as the easiest fields are depleted, oil companies have to invest increasing amounts of energy to extract more oil. Tar sands and some biofuels are extreme examples, with suggestions that it may take more energy to produce some of these than the resulting production. The difference bewteen the oil produced and the energy it took to produce it is called net energy. There are no world-wide figures for net energy, but it seems entirely likely that net energy production is already falling.
- Net exports are falling. The UK, like other oil importing nations, is not affected by the total oil produced in the world, but rather by the amount that oil producers make available for export. Because oil producers are increasingly wealthy, their own economies are consuming more oil (as citizens acquire cars and generally increase their standard of living). Many oil producing countries subsidise oil to a very low price, encouraging profligate use of oil within the country. As a result, the amount of oil available for export is already falling. See Net Exports Blog for more details.
Further reading about peak oil
If you Google Peak Oil you will find hundreds of websites discussing the topic. For an initial primer we recommend Energy Bulletin's Primer or Wikipedia.