What is Peak Oil?

View this quick video summary of the challenge we face. 

You may not have encountered the principles of Peak Oil in the media. Don’t let that lull you into a false sense of security. There was a time when Climate Change suffered the same lack of exposure. (extracted from the Transition Initiatives Primer. download the full document here)

Peak Oil is not about “running out of oil” – we'll never run out of oil. There will always be oil left in the ground because either it's too hard to reach or it takes too much energy to extract. Ponder on a fact that the economists conveniently gloss over – regardless of how much money you can make selling oil, once it takes an oil barrel's worth of energy to extract a barrel of oil, the exploration, the drilling and the pumping will grind to a halt.

Peak Oil is about the end of cheap and plentiful oil, the recognition that the ever increasing volumes of oil being pumped into our economies will peak and then inexorably decline. It’s about understanding how our industrial way of life is absolutely dependent on this ever-increasing supply of cheap oil.

From the start of the 1900s, plentiful oil allowed a coal-based industrialised society to massively accelerate its “development”. From that time, each year there has been more oil (apart from the two oil shocks in the 1970s when Middle East crises caused worldwide recessions). And each year, society increased its complexity, its mechanisation, its globalised connectedness and its energy consumption levels.

The problems start when we’ve extracted around half of the recoverable oil. At this point, the oil gets more expensive (in cash and energy terms) to extract, is slower flowing and of a lower quality. At this point, for the first time in history, we aren’t able to increase the amount of oil that’s coming out of the ground, being refined and reaching the market.
At this point, oil supply plateaus and then declines, with massive ramifications for industrialised societies. Very few people are paying attention to this phenomenon, and it’s easy to understand why.

Peak Oil recognises that we are not close to running out of oil. However, we are close to running out of easy-to-get, cheap oil. Very close. That means we’re about to go into energy decline – that extended period when, year on year, we have decreasing amounts of oil to fuel our industrialised way of life.

The key concepts and implications of this are as follows:
  • of all the fossil fuels, oil is uniquely energy dense and easy to transport.
  • ever-increasing amounts of oil have fuelled the growth of industrial economies.
  • all the key elements of industrial societies - transportation, manufacturing, food production, home heating, construction - are totally reliant on oil.
  • understanding the depletion pattern of oil fields is crucial. There is a consistent pattern to the rate of extraction of oil - and this applies to individual fields, to an oil region, to a country and indeed to the entire planet - namely, the first half of the oil is easy to extract and high quality. However, once about half the recoverable oil has been pumped out, further extraction starts getting more expensive, slower, more energy intensive and the oil is of a lower quality.
  • this pattern means that the flow of oil to the market, which has been steadily increasing over the past 150 years, will peak. After that, every successive year will see an ever-diminishing flow of oil, as well as an increasing risk of interruptions to supply.
  • a growing body of independent oil experts and oil geologists have calculated that the peak will occur between 2006 and 2012 (a few years of hindsight is required in order to confirm the peaking point).
  • technological advances in oil extraction and prospecting will have only a minor effect on depletion rates. As an example, when the US (lower 48) hit their oil production peak in 1972, the rate of depletion over the next decades was high, despite a significant wave of technological innovations.
  • It’s difficult to overstate what this means to our lives in the developed countries.