Aztext Press

Life Off-the-Grid

Something’s Up in the World of Energy

by Cam Mather

Something’s up. At least something’s up in the energy world. Many people have now heard about peak oil. This is the time when the world has pumped half of all the oil it will pump. It’s the top of the supply curve, and once you hit peak and start going down the backside it gets expensive and it gets harder and harder to get out of the ground. Since 2005 the world has produced about 85 million barrels of oil a day. It’s a mind boggling number. It’s 5,550 Olympic sized swimming pools everyday. How can we possibly suck this much oil out of the ground? But what’s been truly amazing is that many people say in the future we’ll be pumping more than this. Some figures show that we’ll need to be pumping 100 million barrels a day or more. Holy cow! Where’s it all going to come from?

Up until last year the IEA said not to worry. Everything is fine. They said we might ramp up to 120 million barrels a day in the future. It’s important to understand what the IEA is. It’s the International Energy Agency and it’s the organization that advises the OECD (Organization for Economic Cooperation & Development) nations on what’s happening with oil. For years they’ve been saying don’t worry, be happy, everything is fine.

Then last year in their 2008 Outlook report they changed their tune. After suggesting in 2007 that the depletion of conventional oil supplies was only dropping by 3%, they suddenly identified the drop at 6.7%! That’s a really scary jump. That means that the world has to discover not only an additional 7% more oil each year, just to keep up with the current pace, it has to find even more because the demand for oil worldwide is increasing.

This is really important stuff. Our society runs on oil and we use a lot of it and if it’s in short supply it’s going to get really expensive and have a major impact on our lives. George Monbiot, a journalist who writes for the UK Guardian, interviewed Fatih Birol, the head of the IEA when they released their report last year and asked him what’s up? (http://www.guardian.co.uk/environment/video/2008/dec/15/fatih-birol-george-monbiot) Why did their depletion number suddenly double? Mr. Birol’s response was basically that it was the first time they took a really critical look at the data on all the oil wells. What? You mean the organization that advises the governments of the developed world on how they should be running their economies and investing in transportation infrastructure, wasn’t looking at the data in the past to make their predictions? This is really scary stuff!

Since the interview Mr. Birol has been on a world tour advising governments that it’s time to get serious about energy. He suggests that the world will hit a “plateau” in 2020. I believe the large number of oil geologists who say we’ve hit that already and we are on the downside of the curve. If it’s not something to be concerned about why is the head of the IEA touring to warn governments?

There have been many recent news articles examining these issues such as this one; www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency. Eric Reguly in The Globe and Mail examines the same issues: http://www.theglobeandmail.com/globe-investor/is-the-world-awash-in-oil/article1360337/

Matt Simmons, chief executive of Simmons & Company, a Houston energy consultancy and advisor to George Bush has been quoted as saying; “Global oil production peaked in 2005 and is set for a steep decline from present levels of about 85 million barrels per day By 2015, I think we would be lucky to be producing 60 million barrels and we should worry about producing only 40 million”

What appears to be happening is that the cat is out of the bag and the powers that be are starting to admit there may be a problem. A report prepared for the U.S. Government by Robert Hirsch in 2005 on peak oil warned that the developed worlds need to start making radical changes at least 20 years ahead of peak (www.netl.doe.gov). If we made a huge effort to reduce our reliance on oil for transportation and made a number of other changes, we might be able to limit the disruption to our lives to something manageable.

If we start 10 years before peak oil to prepare for it, we’ve got to take radical steps to prevent a major dislocation of our economies and lives. If we wait until peak oil hits to start dealing with it, it’s too late. We won’t have the time or resources to prevent a cataclysmic shock to our system. If the IEA is correct that it’s 10 years away, we gotta get crackin’. If you read between the lines of the what the IEA is saying, and assume that people in the industry like Mathew Simmons who says we’re past peak are correct, then “Houston, we’ve got a problem.”

There are simple steps you can take today to start preparing. My book Thriving During Challenging Times (www.aztext.com/thriving.cfm) provides a roadmap to start planning how to prepare for the shocks that peak oil will bring. It doesn’t have to be a bad thing if you have a plan and start preparing now. And best of all, there is no downside to anything you do. Using less energy is better on your pocketbook and better on the planet. What are you waiting for?

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