Peak Oil

One of the issues I have been following for a while is Peak Oil. In 2005 I watched a documentary called The End of Suburbia and it changed the way I look at our modern world. From then on I started reading about and following the trends in the energy sector (oil, natural gas, electricity, coal). I started following Peak oil websites (ie The Oil Drum, Post Carbon Institute, and following Google news items on the topic. I became aware of how unprepared we are in North American cities for the hardship coming down the pipe.

Peak Oil is

the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related oil wells. - wikipedia

The history of Peak Oil goes back to an interesting story about M. King Hubbert. Hubbert tracked the rise and fall of oil field discovery and found that it formed a bell curve. Oil production (extraction) formed a similar curve only spaced several years after the discovery curve. He massed all of this data for all oil fields in the US and predicted US peak oil in 1970. He did this in 1956 and was ridiculed by others in the field. Sure enough 1970 came around and it was discovered that he was right.

World peak oil is more difficult to predict, since more variables are at play. Oil producing nations exaggerate their remaining reserves. One thing is for certain: remaining oil will become more and more expensive to extract. The EROI (energy return on investment) worsens in these hard to reach, politically unstable, offshore or arctic areas. It also seems that the remaining oil extraction will come at greater environmental costs as well.

What will happen after peak oil? Many people think we've passed peak oil already, having seen crude pass $147 per barrel. I wonder if the economic collapse helped sway the price in the opposite direction. When world demand picks up again, you can bet prices will go back up and set record prices again.

Price volatility is one symptom of peak oil. Whenever supply can't meet demand we will have problems on the world market and prices will increase. The gap between supply and demand has been very tight for the last couple of decades.

So what to do? we all depend on oil and natural gas (which will follow close behind oil's peak). Some of the options will be explored in future posts. Let's just say we need to reduce our dependence on fossil fuels in all aspects of our lives: food, transportation, home heating, entertainment, employment, etc.

Thanks for reading, more to come.