Who’s afraid of oil depletion?

By David Strahan. First published in the Ecologist, April 2007.

What is it about climate change campaigners and peak oil – the two words you almost never hear them utter? The idea that global oil production will soon go into terminal decline ought to be a godsend; it makes the kinds of things they have been lobbying for all the more urgent and compelling. Yet most of the big NGOs continue studiously to ignore the idea. True, the Soil Association has recently taken to peak oil like an organic duck to water, but searching the websites of Greenpeace and Friends of the Earth brings up only a couple of brief and non-committal references buried deep in reports that few have probably read. Most peak oilers accept global warming without question, but the feeling is evidently not mutual.

They ought to be such natural allies. For every climate argument there’s a strong peak one to reinforce it. The climate change campaigner wants to reduce food miles and encourage local agriculture in order to cut carbon emissions; the peak oiler wants the same to secure the food supply when fuel runs short. The climate change campaigner wants higher vehicle fuel economy to cut carbon emissions; the peak oiler to help defer the date of peak production and its attendant economic crisis. Broadly speaking both agendas call for an early and rapid transition away from the oil economy, but peak oil arguments have the advantage of even greater urgency; despite the horrors of the recent IPCC Fourth Assessment Report, the most devastating impacts of peak will come far sooner than the most catastrophic of climate change – within a decade or so rather than a century. So why are climate change campaigners so wary of enlisting peak arguments?

On both sides of this divide, I get a certain sense of competitive shroud waving: my crisis is bigger than yours. And perhaps peak oilers are as much to blame for this. Many climate change campaigners seem to have got the impression that those who worry predominantly about peak oil must somehow be suggesting that climate change is not such a monumental problem, or even that ‘running out’ of oil will solve global warming. There may be some naïve peak oilers who actually believe this, but as far as I am aware no serious writer on the subject has advanced such a view. And as the graph below makes clear, it is perfectly possible to run short of oil and pollute the planet to destruction simultaneously.

The International Energy Agency’s business-as-usual forecast shows total CO2 emissions from fossil fuels growing from 26 billion tonnes in 2004 to 40 billion in 2030. The IEA does not accept the case for an early oil peak, but as I show in The Last Oil Shock, their forecast relies in part on a demonstrably over-optimistic resource assessment. However, if we take their forecast and impose an oil peak in 2010, followed immediately by production decline at 3% per year, total emissions still rise by 25% over the next two decades, to 32 billion tonnes. The massive fall in oil-related emissions – the result of oil production slumping 40 million barrels per day – is simply overwhelmed by continuing growth from gas and coal, which are not so immediately resource-constrained. Neither side can now seriously believe oil depletion solves climate change, or that this spurious idea is any reason to resist the persuasive case for an early global oil production peak. 

Figure 1: The International Energy Agency’s business-as-usual forecast shows total annual emissions rising from 26 billion tonnes in 2004 to 40 billion tonnes in 2030. But if we assume (red line, my modification) that oil production peaks in 2010 and then falls at 3%/year, total emissions reach 32 billion tonnes in 2030, 8 billion less than they would otherwise have been, but still 6 billion – or 25% – higher than in 2004. [1]

Perhaps a more reasonable objection of climate change campaigners, until recently at least, is uncertainty about the reliability of the forecasts, and when exactly the peak will arrive. It is perfectly true that previous predictions of a global oil peak have come and gone without the sky falling in, and nobody likes to be accused of crying wolf. When I interviewed Greenpeace director Stephen Tindale for The Last Oil Shock, he was ready to accept that peak oil might provide additional ammunition for his organization, but was adamant they should not include it in their armoury. “This is a highly contested area”, he argued. “If it turned out that the oil peak thesis was wrong, and we’d been using it, then that would undermine and discredit other things we had been saying”. For any organization that has to spend much of its time fighting off climate sceptics, such caution is perhaps understandable, but it is no longer justified.

The remaining areas of doubt about the date of the oil peak are evaporating almost as quickly as those about the severity of climate change. Out of just under 100 oil producing countries worldwide, 60 are already in terminal decline.[2] New countries join the list almost yearly, and since the late 1990s have included significant producers such as Britain, Norway, Denmark, Mexico, Argentina, Columbia, Australia and Oman. In aggregate, OECD oil production has been in decline since 1997, and most forecasters – even including noted optimists such as the IEA and ExxonMobil – now predict that the entire world except for OPEC will peak by early in the next decade. From then on, by common consent, the only thing standing between us and the conventional oil peak is the cartel. There are severe doubts about the real scale of OPEC’s reserves, and most serious independent observers do not expect its production to stave off the global peak for long.

Despite government denials – the official position in both Britain and America is that there will be no peak before 2030 – this notion is now being taken seriously by officials at the highest levels. As I report in The Last Oil Shock, the consultancy PFC Energy has briefed Dick Cheney that on a conservative reserves estimate OPEC oil production – and thus global output – could peak by 2015. In a well-researched speech at Stanford University last year, Sir David Manning, Tony Blair’s chief foreign policy advisor between 9/11 and the invasion of Iraq, noted the consensus was narrowing to “some point between 2010 and 2020”. At an Energy Institute lunch in 2005, the government’s chief scientific advisor Sir David King told me emphatically “ten years or less”.  And yet still some climate change campaigners remain suspicious to the point of hostility. One well-known author even ludicrously suggested to me recently that peak oil was nothing but oil company propaganda. He was apparently unaware that ExxonMobil is just as contemptuous of peak oil as it has been of climate change.

This continuing denial of peak oil is myopic in the extreme, since not only does falling oil production not solve climate change, it also seems likely to make fighting global warming very much harder. When oil production goes into decline, the price of crude is likely to soar, with devastating economic effect. The kind of long term impacts attributed by Stern to climate change could arrive much sooner and in a single thunderclap. With the economy reeling from blows “similar to those associated with the great wars and the economic depression of the first half of the 20th century” [3], where will the money come from to make the massive investments necessary to create the new energy infrastructure? And faced with the likely re-emergence of mass unemployment, will the political priority be to impose a high carbon price, or simply to keep the lights burning at lowest cost?

Peak oil could also sabotage attempts to fight climate change by paradoxically increasing greenhouse gas emissions, if oil depletion forces us to exploit the wrong kinds of fuel. The alternatives to crude oil are all resource constrained and unlikely to fill the gap – at least not in time – but they still have the potential to do enormous climate damage. Burning rainforest and peatlands to create palm oil plantations for biofuels releases vast amounts of CO2, and has already turned Indonesia into the world’s third biggest emitter after America and China.[4] Synthetic transport fuels made from gas using the Fischer-Tropsch chemical process emit even more carbon on a well-to-wheels basis than conventional crude. When the feedstock is coal the emissions double. So in the unlikely scenario that we manage to replace more than half the yawning conventional deficit with coal-based fuel, but not all of it, we would still suffer fuel shortage while emitting even more CO2 than in the current business-as-usual forecast – the worst of all possible worlds.

Ignoring peak is even more short-sighted in light of climate change campaigners’ failure to make significant headway in changing most people’s behaviour – even when preaching to the choir. A recent survey of Guardian and Independent readers revealed the gulf between their green self-image and their actions; most hadn’t even insulated the loft. And despite the increasingly shrill warnings, large swathes of the population still apparently see no conflict in having children – whose lives could be blighted by global warming – and continuing to drive the 18mpg Range Rover Sport and taking several long and short haul holidays per year. Climate change campaigners evidently need some help.

Climate change arguments hold the moral high ground, but are weakened by the fact that their appeal is essentially altruistic: we are urged to change our ways for the sake of the polar bears now, and for other people mostly some time in the future and a long way away. Peak oil by contrast appeals more immediately to baser instincts such as fear and self-preservation: what will happen to me and mine when the oil runs short? I concede these distinctions are being eroded as the news on global warming gets ever worse, but since those who flout climate change imperatives to cut their consumption are apparently selfish, perhaps peak oil is the best way to reach them. The climate change campaigner has nothing to match the wallet-grabbing power of the peak oil argument against buying an SUV: how much do you think that beast will be worth with oil at $200 a barrel?

But if climate change campaigners were to take peak oil seriously, they would be forced to re-examine some of their most strongly held and comforting beliefs – and perhaps this is why some are so resistant. Once you accept a fairly imminent shortage of oil and liquid transport fuels – and thus a major hole in the entire energy supply – all sorts of unpleasant things follow. The idea that western levels of consumption can continue to grow broadly as before becomes untenable. The idea of a system of progressively tighter energy rationing – along the lines of personal carbon trading – looks increasingly inevitable. The idea of natural gas as a ‘bridge fuel’ to some hydrogen-powered utopia looks ludicrous; gas production has already peaked in North America, is widely expected to peak in Europe by 2010, and some forecasters predict a global peak as early as 2025. And this in turn demands a cool reassessment of energy sources that many climate change campaigners have already rejected: coal fired power stations with carbon capture and, I am sorry to say, nuclear power. Put this way, perhaps I have framed the question wrongly: who wouldn’t be afraid of oil depletion?
——————————————————————————–
[1] World Energy Outlook © OECD/IEA, 2006, Figure 2.8, p.81, as modified by David Strahan.  [2] Personal communication, Dr Michael Smith, www.energyfiles.com [3] Stern Report, executive summary.  [4] Peat CO2: Assessment of CO2 emissions from drained peatlands in SE Asia, Wetlands/Delft Hydraulics, 2006.