The Dead Simple Peak Oil Primer

Peak oil has been explained in great depth in many places with solid supporting information. I have referenced some of those books and websites at the end of this post. Here, I will do my best to explain what peak oil is and what it means for you and us, in a dead simple manner.

What is peak oil?

The concept of peak oil is very simple: The earth has a certain amount of oil (and other fossil fuels). No more is being made. Peak oil occurs when half of this oil has been used.

It is a peak because, from that point forward, there will be less oil available. We appear to have hit the peak.

What will be the effects of peak oil?

The effects of peak oil are quite deadly and easy to understand once you realise how dependent our society is upon oil:

1. Our entire society is built on readily available and inexpensive oil. Essentially every car, transport truck, train, ship, and aeroplane runs on oil. (Or gasoline, diesel, or some other derivative of oil.) Almost all farming requires oil for fuel and for agro-chemicals like pesticides and fertilizers. All plastic is made from oil. All mining requires oil-fueled machinery, including tar mining to get more oil.
2. Demand for oil is increasing as countries like China develop.
3. As the demand for oil collides with a decreasing supply, oil prices will spike. These spikes cause recessions.
4. In addition to oil price spikes, oil prices will trend upward, causing a permanent recession, or more likely, a depression.

There you have it; peak oil is simple and deadly.

What about substitutes?

There are no substitutes available for oil in the quantities our modern economies require. Period. Remember all those vehicles, from tractors to trucks to mining equipment? None run on electricity or hydrogen or anything except oil.

Further, nor will any substitutes become available in time to replace declining oil supplies. (There is some debate whether this would be correct if a crash program was undertaken to radically cut oil demand, such as by rebuilding the rail system, moving to local, organic farming, and so on. At the current time, we are moving very slowly indeed; there is no crash program in sight, so the point is moot.)

But, but…the market?

A special word here is needed about ‘the market.’ Many believe that the market will produce non-oil-fueled ways to mine ore, to create pesticides, to run a global economy where items commonly travel thousands of kilometres before reaching their final destination. Do not put too much faith in the market.

First, it is not magic, it is simply a rough aggregation of our desires, and those are influenced by everything from advertising to legislation. Second, there is no such thing as a free market. It has been warped by corporations seeking advantage for their business. This is why General Motors bought and ripped out streetcar tracks, why GM had an electric car twenty years ago and scrapped it, and why GM received a multi-billion-dollar bailout recently.

Even without this corruption of the market, simply living in a complex society is going to result in distortions, intentional or not. Building the interstate highway system in the United States put railroads, which are far more fuel-efficient at transporting goods and people, at an economic disadvantage from which they have never recovered. Building all those roads also enabled the rise of subdivisions, now being foreclosed upon.

As oil prices increase, this will certainly drive non-oil-fueled methods of getting things done. However, remember that oil price increases also cause recessions, resulting in less money available for research and new programs. In addition, those who benefit from high oil prices will continue to resist alternatives and demand higher subsidies for themselves. Worse, unemployed and hungry people are likely to be angry, leading governments to take the easy route and subsidise the old way as long as possible, rather than doing what must be done: abandon it and move quickly to a conserver, zero waste, renewable energy economy.

Suggested resources if you want to learn more

Lester R. Brown has proposed a detailed plan to survive peak oil and stop climate change. It is available for free download or can be purchased.

The following sites are excellent on the subject of peak oil:

• The Oil Drum: Discussions about energy and our future
• Future Scenarios: Mapping the cultural implications of peak oil and climate change
• The Archdruid Report: Druid perspectives on nature, culture, and the future of industrial society