the end of oil

The last scenario, entitled “A Darker Middle East,” was the grimmest. Here, the U.S. defeat of Saddam Hussein has backfired, alienating many in the Arab world and leading to the overthrow of Saudi Arabia, Kuwait, and other “relatively friendly Arab governments by nationalist Islamic regimes.” With U.S. forces tied up in Iraq and Afghanistan, the United States is reluctant to intervene militarily. Meanwhile, new nationalist governments in Saudi Arabia and Kuwait cut oil production by 20 percent for three years, and 10 percent thereafter. The crimp in supply, coupled with terrorist attacks on international oil shipments, pushes prices for crude to fifty dollars a barrel over five years — thereby setting the stage for the end to a modern energy economy based on cheap oil.

That’s from The End of Oil (Paul Roberts 2004) and describes one of the scenarios studied in 2002 at the National Intelligence Council a group setup by the US intelligence community to involve experts outside of government in the examination of the energy systems of the future. Notice how dated it seems already with “pushes prices for crude to fifty dollars a barrel” when today’s prices with “relatively friendly Arab governments” still in place look like this:

In late trading in New York, crude oil was quoted at $73.87 a barrel, up $1.37 for the day.

Earlier, North Sea Brent crude oil hit an 11-month high of $77.60, reflecting in part a closed pipeline. North Sea pipelines often are shut for maintenance in the summer months, but this year, the work has coincided with turmoil in Nigeria (See ” Nigerian Abduction Drives Oil Prices”) and tensions between the West and Iran. link

It’s been 3 years since we’ve seen oil at $40 and more than 2 years since $50.

The NY Review of Books called The End of Oil “A stunning piece of work — perhaps the best single book ever produced about our energy economy and its environmental implications.” I don’t have a lot to compare it to, but it’s hard to imagine a better book on the topic. Most significantly, Roberts takes a refreshingly objective, nonpartisan, approach. The first 300 pages are compelling, showing off the result of his three years of research, and only when you get to the final chapter does he reveal his own conclusions are about likely outcomes and best strategies going forward.

Towards the end he says,

The more we learn about the history and character of our energy system, the harder it becomes to see how the world can escape some kind of wrenching disruption, given current trends. We know, for example, that our energy demand will eventually exceed our capability to supply it safely, especially in the developing world. Competition for energy resources will increasingly drive international relations, and produce conflict. Energy markets will continue to ignore the external costs of fossil fuels, thus confining new technologies to the margins and gradually poisoning the thin layer of soil, water, and air that supports all life.

And yet the alternative scenarios — in which the world shifts gears and revolutionizes the way we make and use energy — are often more depressing, in part because we are increasingly aware of just how difficult change will be. In the simplest terms, the energy challenge of the twenty-first century will be to satisfy a dramatically larger demand for energy, while producing dramatically less carbon. Yet the availability of carbon-free energy on a mass scale — whether produced from renewable sources, like solar and wind, or from decarbonized fossil fuels — will not happen without significant technological developments. And such breakthroughs aren’t likely until the market regards carbon as a cost to be avoided — not just in “progressive” enclaves like Germany or England, but in the big economies of Russia, China, and, above all, the United States.

Then Roberts presents a positive, optimistic scenario in which the US government, pushed by industry and individual states like California, is moved to aggressively address energy policy by emphasizing a “bridge” economy to stop the worst of current energy trends while providing “more flexibility in eventually creating a new energy system.”

The bridge economy would emphasize

• natural gas as a cleaner substitute for coal and a source for development of a hydrogen-based fuel system
• carbon caps on industry sectors and a carbon trading system paired with a “well-funded R&D program to develop technologies for coal gasification and carbon capture and sequestration — the essence of clean coal.”
• a “no-holds-barred, multifront campaign to cut Americans’ high consumption of oil and other energy” across the economy “… above all in the transportation sector.”

One final quote:

It is important to note that the impact of an American bridging strategy [adopted unilaterally] would go well beyond the U.S. energy economy. Because the United States is so large a market for world energy products, a U.S. energy revolution would function as a catalyst in the transformation of the global energy economy, initiating a “domino effect” in energy that could ultimately change everything form emissions and energy use in the developing world to our oil-dominated geopolitical order.

The last time the United States got really serious about energy efficiency — after the 1974 oil price shocks — U.S. oil use fell so low that OPEC was nearly wiped out. A more permanent reduction — even if partly offset by rising demand in the fast-growing Asian economies — would completely change the global oil order.

…

Even as U.S. policies were undermining the existing energy order, they would be encouraging the development of a more sustainable one. A U.S. initiative to develop clean-coal technology, for example, would dramatically change the significance of an Asian economy powered by coal.

..

…because China and India have little choice but to burn coal, if the United States hopes to avoid climate change, it has little choice but to help the Chinese and Indians adopt clean-coal technology.

More Paul Roberts:

• a 2004 Mother Jones interview
• a 2005 piece he wrote for WaPo, Our Post-Oil Future Needs a Push

note

The phrase “the end of oil” doesn’t mean we will run out of oil. We won’t. It means the price of oil will eventually rise so high we will turn to other ways to satisfy our enormous appetite for energy.

credits

Data for the chart at the top of the post comes from here and here.