Blog post

peakOilTruck.jpgA new report by a United Kingdom industry taskforce predicts steep oil price rises and gasoline supply shortages by 2014-2015, which will put the global economy at similar risk to the 2007-2008 rapid rise in oil prices that helped trigger the Great Recession.

"The time period would be 2014-2015 when the oil market would be starting to experience rapidly rising prices and tightening oil supplies...It is notable that the CEO of Total, Christophe de Margerie, is already warning of such an outcome in the 2014/15 period," says the report, "Industry Taskforce on Peak Oil & Energy Security," funded by Virgin Group, Arup Engineering, Foster and Partners, and Scottish and Southern Engineering.

What can cities, businesses and individuals do to prepare for such energy price volatility, buy hybrids? Actually, the report asserts, "there is real danger that the focus on technological advances in cars is making consumers and government complacent."

More urgent steps need to be taken by policymakers in particular to avert this impending crisis:

  • Support greater planning and funding for public transit, including taxation to benefit public transit taxation and allocating road space based on most fuel efficient modes (i.e., congestion pricing).
  • Support planning for less energy-intensive forms of development (less sprawl, more transit-oriented housing, retail and businesses).
  • Transition to more energy-efficient transportation fleets or vehicles.
  • Coordinate policy mechanisms and organizational practices to create a behavioral shift from private car use to other more sustainable forms of mobility, including public transit, car sharing, cycling and walking.
  • Encourage, enable and practice smart green city tactics: telecommuting, video conferencing and public work centers, such as those being piloted in Amsterdam with Cisco.

At the state and national government level, preparations for another "oil crunch" similar or worse than 2008 and 1980 should include: 

  • Ending subsidies for oil in order to reduce economic dependence on oil-based industries.
  • Transition agriculture and food production from operations highly dependent on the use of oil-based products such as diesel fuel, fertilizers and crop treatments, while encouraging bio-regional food production from urban foodsheds for nearby population centers. 
  • Planning and support for high-speed rail networks (though this would be a longer-term preparation for post-carbon transportation era beyond 2020)

Daniel Lerch of the Post Carbon Institute authored a guidebook for cities and local government on how to prepare for an oil crisis. I have also written a study looking at US oil crisis readiness in the largest 50 US cities, "Major US City Post-Oil Preparedness Ranking" (second publication from top).

Whether, it is called "peaking oil" or an "oil crunch," many experts see total global oil production reaching a plateau of around 91-92 million barrels a day by 2012-2014 unless, as the report says, "some unforeseen giant, and easily accessible, finds are reported very soon."

 With fast-growing demand for oil in developing economies such as China (which overtook the US in 2009 for total automobile sales), India and the Middle East, developed nations in North America and Europe need to consider wholescale industrial and societal shifts.

The United State and Canada in particular should start reducing oil dependency now in preparation for oil price volatility and possible supply disruptions that would force such shifts without warning, with dire consequences for the economy, nationally and locally. Many cities (New York, Toronto, Vancouver, Washington, D.C.) are already somewhat prepared to make this shift because of infrastructure for public transit and other oil-free mobility options.

The world is heavily dependent on 120 oil fields that account for 50 percent of world production, and contain two-thirds of remaining reserves of fields in production. New discoveries of oil fields off Brazil's coast, under the Arctic and elsewhere, will not be enough to replenish the "drawdown" that is occurring. Besides, many of these fields take investments that require oil to be priced over $100 or $120 a barrel, so they will not be producing for a number of years after such investments are made: in other words, far beyond 2015.

"The challenge is that if oil prices reach the levels necessary to justify these high-cost investments, economic growth may be imperiled," says the Industry Taskforce on Peak Oil and Energy Security.

Another so-called energy "ace in the hole," oil sands deposits in Canada, are not a viable option. Oil sands produce at least three times the amount of atmospheric carbon over conventional oil when they are processed and used, which would exacerbate global climate change significantly, while also fouling the region's water supply.

What is being raised by this report is that the era of cheap oil is over, and that the consequences will be ugly, unless we start preparing for this profound change.

"Don't let the oil crunch catch us out in the way that the credit crunch did," said Virgin CEO Richard Branson and other corporate executives in the introduction to the report

Warren Karlenzig is president of Common Current, an internationally active urban sustainability strategy consultancy. He is author of How Green is Your City? The SustainLane US City Rankings and a Fellow at the Post Carbon Institute.

Originally published February 22, 2010 at the Green Flow blog of Common Currents. Republished February 23, 2010 at Worldchanging

Like this post?

Keep the information flowing: Donate to Post Carbon Institute
Stay connected: Receive our monthly e-newsletter
Reposting: See our reposting policy

blog comments powered by Disqus

Reader Comments


Please take Thorium power seriously

From: Dr Tim Norris, Feb 26, 2010 01:03 PM

Dear Reader

I work as a patent attorney and have been assisting many inventors in respect of renewable energy systems. I am not allowed to let my own views affect the service I prvide to my customers. However, I write here to express my own personal private views in a non-work context.

As human civilization has progressed, it has evolved from combusting wood to coal to oil/gas, namely fuel sources with progressively higher "energy flux density". Unfortunately, the rate at which we are now using oil and gas is both unsustainable and may risk damaging the environment. Coal in particular is especially problematic in that it contains pollutants such as trace heavy metals, radioactive metals for example. At present rates of energy use, Uranium fuel is in insufficient supply such that, based upon existing Uranium non-breeder fission nuclear reactor technology, would only provide humanity with sufficient energy for a few decades. Fusion energy always seems to be about "50 years" into the future, and the complexity of the technologies involved may simply render fusion systems too expensive per kWh generated. We do not have 50 years, especially in view of present population growth rates towards 9 billion people.

Thorium seed blanket reactors were proposed in the 1990's. Moreover, Thorium Fluoride salt reactors were researched in a period between 1950's to 1970's and found to work well; however, these were small research facilities. Some highly praiseworthy pioneering technical work was undertaken in the USA.

There is estimated to be circa 6 million tonnes of Thorium in various deposits around the World. For example, the Telemark region of Norway has deposits amounting to about a million tonnes of Thorium.

Thorium blanket-seed breeder reactors produce about 1% of the waste of present contemporary uranium nuclear fission reactors. Moreover, Thorium reactors have desirable characteristics such as being able to be "throttle" controlled to cope with varying dynamic electrical load demand.

These deposits of Thorium "burnt" in fourth-generation Thorium breeder reactors would be sufficient to power the World at present energy consumption levels for a period in a range of 10000 years to 100000, possibly longer, namely giving humanity plenty of time to perfect fusion power.

What it comes down to is that the World does not need to have an energy crisis. The crisis is an unwillingness to adopt new technology. The low "energy flux density" associated with wind turbines and solar schemes means that the material costs when employing such more "conventional" renewable energy systems is too high to maintain an existing level of World human activity. As energy supply falls based on fossil fuels in combination with more "conventional" renewable energy systems, there will be a tendency to a negative downward spiral as predicted by Olduvai Theory resulting in starvation and general economic and social breakdown/chaos in many societies. This is all clearly predicted by Olduvai Theory (kindly see Wikipdeia for explanation) which is worthy of study.

Philosophically, the issue is that, if we adopt fourth generation Thorium technology for power generation and transform our agriculture, transport and manufacture to be based on electricity, the future can be extremely positive for humanity, in other words, human civilization based upon combustible energy sources is just the beginning of a long trek of human development and creativity in sciences, philosophy culture and art. There is potentially an immensely positive future for humanity if we make the right decisions now ... but time is running out.

My plea to Government leaders, the elite, the Oligarchy, the Bilderberg Group, etc. is please please set in train as quickly as possible an emergency rescue mission, cutting away waste in phony wars, Wall Street, corrupt and wasteful financial markets, etc. and focus all efforts and resouces in moving humanity from being based on oil and gas, to a World system based on Thorium breeder nuclear technology, with aim to develop fusion power in the longer term. Please do this, otherwise humanity has a very sombre and difficult future.

Switching to Thorium fission technology will also address the anthropogenic carbon dioxide climate issue if this turns out to be a significant factor. I submit that the climate issue is actually of secondary importance in comparison to the immediate and urgent task to develop fourth generation breeder (blanket seed) Thorium reactor technology for power generation and get these reactors deployed around the World as quickly as possible. Rather than pumping underground geological formations (anticlines) formerly filled with oil and gas full with carbon dioxide, it would be far better to use these geological volumes for storing (emulsified) nuclear waste; after all, the stars above our head (including the sun) are big fusion reactions, and the core of the Earth is heated by natural Uranium/Thorium fission reactions which keeps the magnum there glowing red hot beneath our feet. Nuclear reactions are one of the most natural types of activity in the Universe; however, for use on the surface of the Earth, nuclear waste products need, of course, to be handled responsibly.

There is thus great hope for humanity. I am enrmously positive and enthusiastic. There is potential room for future economic growth. There is potential hope of improving the standard of living of people upon the Earth. There is potential hope of cleaning up polution and creating a clean and unpoluted environment ... but it all requires energy. There is a solution ... Thorium.

We just need the political will to engage the technical challenge before us, and stop all this fighting of phony wars and such like which waste resources and effort and also, at best, only win access to fossil fuel resouces which enable the presently orgy of fossil fuel consumption to continue for a few more years.

We must have a clear vision to the future and we need to act decisively and intelligently, ... whilst we still perhaps have time.

Thank you for kindly reading this e-mail. Please do all you can to raise awareness of this Thorium issue, not only for the United Kingdom, but the World as a whole.

Thank you.

Dr Tim Norris


From: Katy, Feb 26, 2010 11:33 AM

We do live on a finite planet with finite resources, but the overpopulation 'debate' is a smokescreen for the over-consumption by a few at the expense of the many. There is a limit to how many humans can live sustainably on this planet- but our current way of life distorts this issue. There are not too many people currently, there are too many profligate consumers.

More urgent steps need to be taken by policymakers in particular to avert this impending crisis:

From: todd cory, Feb 25, 2010 03:54 PM

Um... one elephant in the room not mentioned is population. We live on a finite planet with finite resources. The more people there are, the smaller the pie is for everyone.

Oil sands GHG intensity - incorrect number

From: Julien, Feb 25, 2010 02:59 PM

"Oil sands produce at least three times the amount of atmospheric carbon over conventional oil when they are processed and used": that is not correct. Over its total lifecycle, a barrel extracted from the oil sands results in about 20% more emissions - the bulk of which (70+%) take place at the tailpipe. So the oil sands ARE a horrible thing but mostly because of water/land impacts. Also, they will never represent more than a tiny fraction of the expected decrease in production.