STRATEGIC CHOICES FOR MANAGING THE TRANSITION FROM PEAK OIL TO A REDUCED PETROLEUM ECONOMY
Written June 06 by a geologist.
http://www.ldeo.columbia.edu/~odland/Od ... tation.pdf
I haven't read all 130 pages. Here's the conclusion:
Tess, what's your thesis on?It is by now obvious that world oil production faces serious constraints to expanding.
Exploration and refining infrastructure is operating at capacity, yet it may not be profitable to
invest in capital expansion. New oil discoveries have not offset the yearly depletion of existing
fields since the 1980?s. Whether or not world oil production will peak in 2005 or 2025 is not the
critical question; we have already rolled over to a sellers? market because demand exceeds the
rate at which oil can be supplied. With little sign of demand abatement from the US or Europe
and skyrocketing demand from China and India, we are drawing down the capital of our oil
endowment at an alarming rate. From this point onwards, we can expect supply disruptions,
price spikes, and oil shocks.
The petroleum-based world economy has therefore reached a tipping point. Fierce
competition for the remaining oil resources will increasingly drive the markets, as well as
national and foreign policies. The strategic choices we make now about how the 2nd half of the
world?s oil should be used will determine how violently and abruptly we descend Hubbert?s
Peak.
Since a finite resource problem cannot ultimately be solved from the supply side, we
must use every tool at our disposal to reduce demand and develop substitute energy sources.
Market pricing and oil shocks will undoubtedly play a significant role in demand destruction in
the long run. But market solutions will exacerbate distribution inequity and political unrest by
excluding all but the wealthy from oil. Cogent government energy policies to allocate oil and
reduce demand will be required. The most effective are likely to include combinations of nonprice
rationing, fuel consumption taxes, and incentives for conservation and alternative energy
use.
However, the biggest hurdle to overcome in reducing oil consumption is human nature.
Denial is the first recourse, followed by a fighting instinct to preserve the status quo.
Cataclysmic perceptual and behavioral shifts will be required before individuals voluntarily
reduce their oil consumption. Education and discussion of the issues surrounding peak oil are
crucial if we are to manage our inevitable transition away from fossil fuels with any hope of
preserving a civilized society.
As for the post-carbon economy, there is currently no viable plan B. A full-scale
transition effort is urgently needed. The top priority should be to buy as much time as possible
to develop sustainable alternative energy sources. Individuals, villages, states, and governments
need to begin investing in mass transit, energy efficiencies and renewable energy. Before they
will agree to that, they need to believe that the future value of those investments is worth
forgoing other investments or consumption today. Once people grasp the realities of peak oil, a
longer investment horizon becomes possible. We must value the world?s remaining oil resources
as our primary, ever dwindling asset to build the bridge to the future.
