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                          The Reality and Ramifications of Peak Oil

                                                        An Earth Manifesto publication by Dr. Tiffany B. Twain

Human beings, ever since ancient times, have always been on the horns of a dilemma with regard to energy use.  The means to make fire was discovered many millennia ago, and when human populations got large enough, they began to excessively chop down nearby forests.  They found that this depletion had deleterious effects on their ability to sustain their settlements.  Much later, when oxen and horses supplied the power to pull buggies and plows, it was always an inconvenient bother to feed the animals and clean up after the crapulent messes that they made, as one can well imagine.

Southern plantation owners in the United States relied on slave labor.  This dependence had even more serious drawbacks:  slaves were expensive to buy, feed and house, and sometimes it was downright hard to keep them in line.  When the slaves eventually cottoned on to the fact that they were human beings who deserved some rights, it became a logistical and political and moral nightmare for the landed gentry.  A terrible Civil War was fought over this slave-based economic system, and more than 600,000 Americans died in the conflict.

In the first two-thirds of the nineteenth century, millions of whales were slaughtered to produce whale oil that was commonly used to light homes and cities.  These creatures are among the most wondrous of marine mammals, and some of the largest living things ever to exist on Earth.  The use of whale oil use was an exceedingly messy way to provide illumination in both physical and ethical senses.

An even greater cosmic irony relates to the use of fossil fuels.  Their discovery was a stroke of miraculous good fortune that has provided the human race with enormous horsepower to drive our industrial revolution and booming economic production activities and our bottomless desires to buy and consume.  Cheap fossil fuels have facilitated big changes in technological innovations and an agricultural “Green Revolution”, and they have helped enable rapid human population growth.  Ironically, the very act of using this fossilized energy from the Sun involves a process of combustion that gives off toxic wastes like carbon monoxide, nitrogen oxides, ozone and microscopic particles of grit, in addition to many billions of tons of carbon dioxide every year.  This heat-trapping gas is now upsetting the normal climate conditions to which all forms of life on the planet are so marvelously well adapted.

Furthermore, the rapid depletion of these resources is leading to an economic and existential crisis.  If we do not find adequate alternatives to replace fossil fuels in the coming decades, our economies and societies could collapse.  Our Achilles heel reliance on fossil fuels for transportation, agriculture, construction, home building, heating, communication, electricity generation, and almost every facet of our lives is serious and laden with risks.  We are truly “addicted to oil”.

Crude oil first began to replace whale oil in the 1860s.  This new resource proved to be relatively inexpensive and plentiful.  Discovery after discovery of new oil fields has taken place, until we have now scoured the planet and found a total of just over 2 trillion barrels of oil.  We have burned up about 50% of these reserves of oil so far, and an estimated 1.2 trillion barrels of known recoverable reserves of oil remain.

We are currently burning more than 30 billion barrels per year worldwide.  Do the math!  Less than 50 years supply of oil remains, allowing for some new discoveries and taking into account the rapidly increasing demand worldwide.  Some fuzzy math on reserves could make this time frame even shorter, while hydraulic fracturing processes -- fracking! -- may extend it, but between now and the time oil is fully used up, the price will reach prohibitively expensive levels.

Most people are familiar with a standard bell curve.  Imagine in your mind’s eye a bell curve of the use of petroleum from the point-of-view of 100 years from now, when this finite resource will have basically been completely used up.  We are near the top of this curve, and at the beginning of the downward slope.  By the time only 500 billion barrels remain – in likely less than 30 years -- supply shortages will become startlingly severe and the price of oil and gasoline and related products will really be skyrocketing.  Economic activity will be crippled unless good alternatives are developed.

No one has any idea how we will operate commercial airlines under such conditions, or our military jets, which we have been using so aggressively in the past 15 years to achieve our stated ‘geostrategic imperative’ of guaranteeing uninterrupted access to Middle Eastern oil.

Domestic resources of oil in the United States have been so thoroughly exploited that production peaked in 1970 or so, and they have declined ever since.  In 1956, geophysicist Marion King Hubbert predicted that we would reach Peak Oil production from domestic reserves around 1970.  Many people scoffed at Hubbert’s prediction, but their criticism and ridicule was nonetheless eventually rebuffed when his projections proved to be remarkably accurate.  Similar techniques to those that Hubbert used have been applied to estimate the date that production of crude oil would peak in the entire world.  Global Peak Oil is projected to be somewhere around NOW, give or take a few years.  Those who doubt this fact should be cautioned by the reality of our experience with domestic reserves.

Crude oil production in the world increased from less than 60 million barrels per day in 1980 to over 70 million barrels per day in 2004, and then hit a plateau in the 70 to 72 million barrels per day vicinity for the next 6 years.  Hydraulic fracturing has increased this output in 2012 through 2015, so this new technology is postponing the date of Peak Oil production somewhat, but we must understand that conservation and the efficient use of energy represent the safest and smartest initiatives that could be undertaken.  When the International Energy Agency published its “World Energy Outlook 2012”, this insight was made clear.

Factoring in an increased use of natural gas and Canadian oil sands and other unconventional sources of fossil fuel energy, Peak Oil may be delayed a bit longer, but demand for oil will continue to increase for the foreseeable future.  This increase in the rate of resource depletion will be achieved by exploiting reserves more aggressively and by developing even more risky and polluting activities, like extracting oil from tar sands and oil shales, and by drilling in fragile polar ecosystems and deep-sea locations, and by using the risky process of fracking in more places. 

When the Paris Climate Accords were signed by nearly every nation on Earth in December 2015, humanity became more aware that a good proportion of fossil fuels should be left in the ground.  The International Energy Agency made this stunning declaration in the executive summary of its latest World Energy Outlook:  No more than one-third of proven reserves of fossil fuels can be consumed prior to 2050, if the world is to achieve the 2 °C goal”.  This goal, equivalent to 3.6 degrees Fahrenheit, is considered to be the upper limit threshold at which the onslaught of "dangerous climate change" will begin to be felt.  Rephrased, the International Energy Agency is stating that over two-thirds of today’s proven reserves of fossil fuels need to be left in the ground through the year 2050 in order to prevent catastrophic climate change.  Aggressive burning of coal, oil and natural gas may seem like a great idea from the standpoint of investor profit-making on fossil fuels, but from the standpoint of long-term consequences for life on Earth, it is a ridiculously more costly proposition.

Energy efficiency, says the International Energy Agency, “is just as important as unconstrained energy supply, and increased action on efficiency can serve as a unifying energy policy that brings multiple benefits.”

The World Energy Outlook 2012 clearly stated that our global energy regime is not sustainable.  The sudden extreme turmoil in Arab oil producing nations starting in 2011 has accelerated this crisis.  Netflix offers instant viewing of many films on the Internet, including a documentary titled Collapse about the compelling, indeed frightening perspectives of Michael Ruppert.  He gives a particularly chilling account of what may happen as Peak Oil occurs.  He incisively elucidates the concept of a “bumpy plateau” in oil prices as we move through the top of the bell curve of oil production, before a “cliff” of decline begins.  Volatility of oil prices in the past decade is entirely consistent with this bumpy plateau.  Check out this film … but note that it is not for the faint of heart!

The U.S. for many years imported more than 50% of the oil it uses.  This percentage doubled in the 30 years from 1980 to 2010.  Aggressive use of fracking technologies in Texas, North Dakota and other states, however, has reversed this trend, and domestic production has been increasing.  “But still, much of the world’s largest reserves are in Middle Eastern countries.  Yes, right there where we are making enemies by supporting repressive authoritarian regimes like the one in Saudi Arabia, and pursuing imperialistic economic and military policies.”

Technical advances in the process of fracking -- the hydraulic and chemical fracturing of underground rock formations -- are allowing the oil and natural gas industries to fracture rocks that contain fossil fuels.  This development has sensationally increased the supplies of oil and natural gas in the U.S. in the past 5 years.  As a result, oil imports have declined from 60% of our annual needs to 40%, and the U.S. will probably become a net exporter of energy in the next decade or two. 

This surprising change in energy prospects is allowing apologists for the full-speed-ahead-in-dangerous-waters crowd to chortle that Peak Oil has been indefinitely delayed.  The delay is indisputable, but to consider it indefinite is absurd.  In any case, as one observer has stated, it now appears that there is enough oil “to fry us all.”

Enormous profits will be made in the next 50 years on fossil fuel extraction.  But it is instructive to evaluate the boom-and-bust nature, and unjust character, of all extractive industries that exploit non-renewable resources.  Consider silver and gold mining, for instance.  Huge amounts of money were made by mining companies in the area around Ouray and Silverton, Colorado, during the heyday of mining in the region, but then once the mineral veins were effectively exhausted, the mining operations closed their doors and left a damaged environment and toxins leaching into creeks in the vicinity.  The costs for the clean up of such problems caused by mining companies are being shouldered by entirely different people than the ones who profited so handsomely from the operations that created the problems.

Another serious developing consideration involves fresh water use.  Large quantities of water are necessary to the production of energy, so wasteful usages of fossil fuels contribute to increasingly serious water shortage challenges  The energy sector already accounts for 15% of the world’s total use of fresh water, and water scarcity already affects about one-fifth of all humans.  This threat is projected to get significantly worse as the population grows and climate change alters precipitation patterns and mountain snowpacks worldwide.   In fact, according to Scientific American, two-thirds of the world’s population is expected to be living under “severe water stress conditions” by the year 2025 unless there are major changes in the distribution of ever-scarcer water supplies.  By 2025!  That’s like tomorrow!

Since the needs are growing for water to be used in extracting increasing quantities of fossil fuels, water is becoming an increasingly important criterion for assessing the viability of energy projects.

It would be marvelous if the next ‘game changer’ was to be in energy conservation and energy efficiency, and this outcome would become much more likely with proactive energy policies that assess sensible green fees on carbon emissions.  This is Risky Business!

Many economists and politicians believe that technology will come to our rescue in this dilemma.  Once crude oil prices become high enough to hyper-stimulate innovation and the search for alternatives, they say that inventions and new processes will be developed to solve the problem.  These believers could possibly be right, though it is not currently seen as probable.  In the meantime, fossil fuel production has been so competitively overdone that oil is bizarrely cheap in 2016, and we are fiddling while Rome burns instead of taking smart actions to create powerful incentives to conserve.

It is shortsighted to continue to subsidize existing fossil fuel industries and delay the need to invest boldly in alternatives.  The smartest course of action would be to use the remaining reserves of fossil fuels and some of the gargantuan profits being made from their depletion to help make the transition to renewable alternatives.  It takes a lot of energy to build solar panels, wind farms, fuel cells, and geothermal and nuclear power plants, so we should be using our diminishing reserves of oil for the best of these purposes rather than squandering them as fast as we can in our businesses, vehicles, homes, airplanes and power plants.

Our lives and business activities are structured around artificially cheap oil and natural gas.  The actual cost of fossil fuels is far higher than the price we pay at the pump or in utility bills.  That price comes in the form of generous subsidies as well as in the externalized costs of oil spills, environmental damages, mountaintop removal coal mining, mercury pollution, health costs associated with smog, and the effects of climate change that are being exacerbated by spewing billions of tons of carbon dioxide into the atmosphere each year.

Oil will not be easy to replace because it is a unique high-energy resource.  It is a form of fossilized hydrocarbon energy that was generated by plants using light energy from the Sun and the process of photosynthesis.  The extent to which fossil fuels have facilitated our industrial and agricultural revolutions is beyond our ability to fully comprehend.  They have allowed us to increase the production of food so that our human population has increased from 1 billion in the year 1800 to 2 billion in 1930 to over 7 billion today.  It may prove to be impossible to sustain our population once fossil fuels are practically gone in the next 50 years.  The implications of this may prove to be unimaginably severe.

One thing is certain:  it is foolhardy not to be taking advantage of the last 50% of the world’s oil reserves to help develop and implement the transition to cleaner and safer renewable energy alternatives.  In 1973, E. F. Schumacher made a compelling observation in his book Small Is Beautiful:  we should be treating fossil fuels as capital resources rather than as income.  The logical conclusion of such an intelligent and intuitively reasonable treatment would be that we would conserve these convenient high-energy fuels and put some of the profits obtained from burning these irreplaceable assets “into a special fund to be devoted exclusively to the evolution of production methods and patterns of living which do not depend on fossil fuels …”.

Some of these profits should also be utilized to mitigate pollution problems, and to pay for the damages associated with climate changes that are being driven by accumulating greenhouse gases in the atmosphere.  See Chapter #28 – On Climate Change, in Comprehensive Global Perspective, for further illumination on this topic.

At the time E.F. Schumacher wrote the words above, the U.S. had more than 200 billion barrels of oil reserves, and our nation had just passed Peak Oil production from domestic reserves.  Today we have used up most of our domestic oil, and we have less than 30 billion barrels of oil left.  And we are wantonly intent on using up these reserves and all of the others found around the rest of the planet.  While our population represents less than 5% of the people in the world, we are burning up almost 25% of the fossil fuels used each year.

Instead of wisely setting aside a portion of the profits derived from the profligate depletion of these difficult-to-replace assets, we allow corporate executives, public investors and other self-interested constituencies to reap all the profits.  We even give generous incentives to Big Oil corporations to add to their already gargantuan profits every year.  I am not an expert, but one analyst noted that tax subsidies and loopholes, such as oil depletion allowances, drilling cost deductions and enhanced oil recovery credits, sometimes exceed 100% of the value of the energy produced by that oil.  “In other words, it would be cheaper in some cases for the government to just buy gasoline from the companies and give it to taxpayers free of charge.”  Wow!  If that is only half true, it would be obscene for us to continue to give Big Oil such subsidies.

We are acting in a manner similar to the ancient Rapanui inhabitants of Easter Island, who devotedly carved out their monumental iconic stone statues to honor the past while blithely destroying the forest resources upon which their civilization was completely dependent.  At a time when only a fraction of the original palm tree forests remained, they should have been planning ahead to use those trees in a way that would have allowed them to create sustainable lives and make a transition to a new resource base, or to build boats that would have insured them some flexibility for finding new sources of food in the sea.  But, no! -- The Rapanui were unable, or unwilling, to change course and adapt.  They either did not recognize the writing on the wall, or they did not listen to cautionary voices that may have told them that the exhaustion of these vital resources would completely devastate the source of their livelihoods and prosperity, and maybe even threaten the very continuity of their survival.  As a consequence, their population crashed from more than 10,000 people in the year 1600 to less than 200 people a century later.

Humanity now faces a starkly similar dilemma -- and we face it on a global scale.  We are at a risky tipping point, and yet we are complacently allowing politics-as-usual obstructionism whenever energy proposals come before Congress.  Some of the ‘smartest guys in the room’ have ironically joined ‘a conspiracy of fools’ in opposing such understandings.  So instead of supporting far-sighted energy initiatives and investing in conservation and alternatives, we continue to allow oil conglomerates like Exxon Mobil to make the biggest corporate profits in world history.  Meanwhile, we continue to neglect intelligent initiatives and forward-thinking ideas.

Since the more than 321 million people living in the United States represent less than 5% of the total world population, and we have only 2% of the world’s proven oil reserves, and we burn almost 25% of the total amount of oil used worldwide each year, WE AMERICANS ARE THE ONES who should seize the initiative to make smart changes in our rules, policies, incentives and behaviors.  We live in a time of unprecedented uncertainties, and yet we seem to be in denial of the fact that fossil-fuel consumption subsidies are seriously distorting the equations of resource usages and the necessity of a shift to fossil fuel alternatives.

Green technologies represent one of the greatest investment opportunities ever, so our government should strongly encourage them, rather than letting entities vested in the status quo oppose sensible and productive changes.

Despite the fact that fossil fuel industries are among the most profitable industries in all of history, they are the second most heavily subsidized industry in the world, after agriculture.  The International Energy Agency estimates that fossil-fuel subsidies amounted to $312 billion in nations worldwide in the year 2009.  Fossil fuel subsidies worldwide jumped by 30% in 2011 from the prior year total to almost $525 billion, and opposition to incentives to develop renewable energy sources has unfortunately increased. 

In the U.S., subsidies total many billions of dollars per year.  The only way that such an absurd status quo could have become established in the U.S. is to have allowed giant energy conglomerates to gain overweening power and influence in national and state politics and policies. 

Cash-flush lobbyists have powerful influence in Washington D.C.  They gain this power in league with corrupt politicians and operatives in ‘conservative’ think tanks who cook up a wide variety of ingenious and ingenuous ideological rationalizations.  They use their undue influence to obtain big tax breaks and other subsidies, and they irresponsibly use this influence to obtain concessions that allow them to externalize pollution costs, healthcare costs, and environmental damages onto society.  In addition, the costs of wars and heavy military presence in the Middle East are in some ways merely methods of protecting our access to oil reserves found there.

Corporations further manipulate us by stoking our desires and using seductive advertising to promote consumerism and wasteful depletion to satisfy their goal of making bigger profits.  These strategies run contrary to the common good, and are harmful of the prospects of people in future generations who will need natural resources to thrive and survive.

Americans burn about 7 billion barrels of oil per year.  Because our domestic reserves are estimated at maybe 30 billion barrels, they are diminishing to the point of exhaustion.  Because we spend so much money on imported oil, it would be wise for us to boldly embrace an Apollo-Program-like initiative to achieve a cleaner and renewable energy independence from this dependency. 

As we move past Peak Oil, a restructuring will take place in agricultural practices and policies of efficiency and conservation, and in building and transportation alternatives.  The economies of the world’s nations will shift, of necessity, toward smart and sustainable activities, and away from shrewdly profitable but shortsighted and unsustainable ones.  The “endgame” of cheap oil may well be a return to more local and smaller-scale activities.

Some say that nuclear power is the best hope for the future.  But nuclear power has required heavy subsidies ever since it was first developed.  Many of the costs related to nuclear reactor disasters in places like Three Mile Island, Chernobyl and Fukushima, Japan have been foisted upon taxpayers in the affected countries.  Today, we still have not figured out how to keep extremely long-lasting radioactive nuclear wastes safe indefinitely from contaminating the environment.  The risks of accidents at nuclear power plants and in transporting and storing dangerous radioactive wastes make power derived from nuclear energy much more risky than other alternatives.  There are also significant dangers involved in the possibilities of terrorist attacks or military bombings of nuclear plants.  These facts should be taken into account in all decisions about the situation and construction of nuclear power plants and the commitment of public funds to give direct and indirect subsidies to this industry.

In any case, we face a new age of terrible austerity if we do not find ways to replace fossil fuels, to conserve them, and to live our lives more in harmony with resource limitations and with the natural balance of ecological systems.  Our current energy policies are putting us in increasing jeopardy of extreme economic instability, social upheaval, environmental calamity, and intensified resource wars.

Post-Peak-Oil societies must adapt, according to the wise Marion King Hubbert.  He stated:

“Our principal constraints are cultural.  During the last two centuries we have known nothing but exponential growth, and in parallel we have evolved what amounts to an exponential-growth culture, a culture so heavily dependent upon the continuance of exponential growth for its stability that it is incapable of reckoning with problems of non-growth.”  

That is a thought-provoking idea!  Our collective activities are like some grand distorted Ponzi scheme on a scale so risky that much more serious considerations need to be given to them.  During this moment of time, we need to do everything we can to avoid having this new age turn out to be one of wanton depletion of resources and heedless devastation of Earth’s providential ecosystems.  To succeed at this, let’s support bold action.  Let’s demand fundamental changes in our economic policies, energy policies and environmental practices.

I believe we can achieve this!  But we must be more assertive in courageously beginning this process NOW!

A ray of hope has developed with some of President Obama’s recent stances, and with the forward-thinking proposals set forth a few years ago in the Senate by Bernie Sanders of Vermont and Barbara Boxer of California.  These two senators have made commendable proposals to boldly address the problem of our fossil fuel addiction and the risks of climate change by introducing two bills, a Climate Protection Act and a Sustainable Energy Act, which constitute a comprehensive climate bill.  Congress should approve these bills!

According to my observations in the Introduction to Common Sense Revival:

“Under this legislation, a fee would be assessed on carbon pollution emissions, and the proceeds would fund investments in energy efficiency and sustainable energy technologies such as wind, solar, geothermal and biomass. The proposal would also provide rebates to consumers to offset higher costs of oil, coal, natural gas and electricity generated from fossil fuels.

By putting a price on carbon, polluters would pay for the damage they inflict on all of us, and the necessary transition to cleaner renewable fuels would be encouraged.  A proposed fee of $20 for each ton of carbon dioxide pollution would reduce emissions an estimated 20 percent below 2005 levels by the year 2025.

These new laws would bring in more than $1 trillion in new revenue over the next decade, and this revenue would be spent in smart ways.  Broadly speaking, the money would serve three important functions:  to protect consumers, invest in clean energy infrastructure, and reduce national budget deficits.

Since carbon fees would be regressive like other consumption taxes, in that they inordinately impact poor people and middle-income families, the Climate Protection Act and Sustainable Energy Act would create a rebate program to make sure these families are not unduly burdened.  This idea is modeled on the dividend paid to all residents of Alaska for profits made on the extraction of oil from state lands, so it would ensure that pollution reduction costs are offset so that they are not regressive.

It would be an auspicious move to reduce dirty energy use and replace it with cleaner energy to power our economy.  These bills would help provide funding for the energy-efficient Weatherization Assistance Program and investment tax credits, clean energy technologies, worker training, and other programs that are crucial for making the transition to a cleaner energy future.

Also, since our nation’s budget deficit is a real problem, the Climate Protection Act and Sustainable Energy Act would reduce this debt by $300 billion over the next ten years.

These bills would create a sufficiently robust tax that would lead to meaningful reductions in greenhouse gas pollution and put us on a path that helps us avoid the most catastrophic effects of climate change. 

These bills would stimulate the economy, create jobs in the burgeoning clean-tech and green-jobs sectors, and encourage businesses to make new investments in energy efficiency and renewable energy.  They would also end taxpayer subsidies to oil and gas companies to ensure a more full cost accounting for their activities.  And the bills include provisions to reduce risks from a shift to fracking in oil and natural gas production that causes local air and water pollution.”

Good ideas and sensible policy initiative could significantly improve our collective prospects, so I heartily encourage all decision-makers to give serious consideration to these ideas!

Let’s do what is in our nation’s best interest, in honor of commemorating our country’s 240th anniversary of our declaration of independence from foreign tyranny!

Thanks for reading!                  


   Dr. Tiffany B. Twain 

      c/o  SaveTruffulaTrees@hotmail.com 

      August 16, 2016 (Revised from initial publication in August 2008, with periodic updates since then.)