Is Peak Oil the Solution to Global Warming?
Posted by Kevin Carson on Jun 5, 2009 in Commentary • 11 commentsAlthough a lot of libertarians are Global Warming skeptics, the sheer scale of the consensus among climatologists is enough–at least tentatively–to command my respect. As for arguments that solar cycles are more important than CO2 levels in their effect on global temperature, I don’t know enough science to sort it all out. But given what’s at stake, and the consensus among climatologists, it seems to me that the sane thing to do is operate on the assumption that anthropogenic global warming is a fact.
What I don’t understand, though, is how infrequently the talking heads draw a connection between Peak Oil and climate policy. If you look at the range of estimates for reductions in oil supply over the next generation or so–one-half to two-thirds–it looks awfully similar in scale to the environmentalists’ targets for reducing CO2 emissions.
It seems pretty clear to me that we’re going to have an enormous reduction in total energy consumption, and in CO2 emissions, over the next generation–and the Kyoto Protocols will have very little to do with it.
The cute blonde actress in the American Petroleum Institute’s infomercials (a lot more mercial than info, in my opinion) can say all she wants that “Fact is a growing world will require more, 45 percent more by 2030…” But fact is, they’re not gonna get it.
Peak Oil is a fact. None of the proposed solutions, from shale and tar sands to “drill, baby, drill,” can survive much scrutiny.
It doesn’t matter how large those oil reserves are that the oil industry’s propaganda keeps telling us about. What matters is the rate at which the oil can be extracted, and the increasing energy cost of extracting it.
And the “fact is” that, in recent years, the amount and cost of drilling required to extract a given amount of oil has escalated enormously.
The biggest new oil reserves whose discovery is so breathlessly reported in the mainstream press amount to maybe a month’s production from the old fields about to go offline in the Persian Gulf. What about the enormous offshore oil reserves where those liberal tree-huggers won’t allow drilling? Well, their total capacity is about half that of the offshore reserves the oil companies are already sitting on, and haven’t bothered to develop. And if they were fully developed, and running at full capacity, they’d probably make about three cents difference on the gallon in the price of gasoline.
The same hard truth applies to all the other proposed solutions, like shale and tar sands. The low-hanging energy fruit has already been picked, and it costs more and more in energy terms to extract what’s left.
The drop in oil prices since last summer doesn’t affect the validity of the Peak Oil hypothesis. Peak Oil only says that the rate of oil extraction is peaking, not that the price will never go down. In fact, the peaking of oil supply will result in the same boom-and-bust cycle that characterizes real estate markets, as Henry George noted over a century ago. Real estate speculators will hold land off the market in anticipation of a future price rise, just as the oil companies sit on those untapped offshore oil reserves. The amount of drilling and exploration has actually dropped considerably in response to the lower prices, which means that when demand gets back to Summer 2008 levels the price rebound will be even more vicious.
And if a fluctuation of a few percentage points in demand can cause oil to fall from $140 to $40 a barrel, imagine what will happen when the supply falls by half or more over the next generation!
So we can count on the coming astronomical increases in energy prices, through the good old-fashioned laws of the market, to spur people to increased energy efficiency without any help from the government. We’ll see most of the long-haul truckers abandon their rigs, and most airline routes shut down. In manufacturing, we’ll see a radical shortening of supply and distribution chains and a relocalization of production. We’ll see trucked-in out-of-season produce become a luxury good, and vegetable production in backyard gardens and in local market gardens increase by an order of magnitude. We’ll see people gradually moving closer to where they work, and an explosion of production in the informal and household economies as suburbanites move production closer to where they live. We’ll see housing contractors discover the market value of passive solar heating and cooling technology. We’ll see the recycling of industrial waste heat become economical.
In short, we’ll see all those eighty percent reductions in energy inputs that Amory Lovins and the folks at the Rocky Mountain Institute like to enthuse about (I highly recommend Natural Capitalism), become good business sense.
And it will all be done by the free market, because people motivated by old-fashioned self-interest will follow an economic law older than the internal combustion engine: when something costs more, people use less of it.
C4SS (c4ss.org) Research Associate Kevin Carson is a contemporary mutualist author and individualist anarchist whose written work includes Studies in Mutualist Political Economy, Organization Theory: A Libertarian Perspective, and The Homebrew Industrial Revolution: A Low-Overhead Manifesto, all of which are freely available online. Carson has also written for such print publications as The Freeman: Ideas on Liberty and a variety of internet-based journals and blogs, including Just Things, The Art of the Possible, the P2P Foundation and his own Mutualist Blog.
For some informed insight on this area, readers could do worse than look at the R-Squared Energy Blog. I forget if it was there or elsewhere, but one good way to track this sort of decline is to graph not current production but current production divided by total production to date against time, usually for this or that individual coal or oil field rather than for the total resource (though that works too). That shows a very nearly linear trajectory towards zero and can be used to estimate the end date as well as future yields; apparently it was first used for British coal about a century ago.
I think the outcome will depend very much on the magnitudes and time scales (only slow, steady decline or abrupt shocks as well). It would be quite possible to phase in clean nuclear power of the sort Nuclear Green advocates to supplement coal power and keep power cheap, and phase in using coal or biomass feedstock with that cheap power to synthesise enough liquid fuels to replace petroleum products (the R-Squared Energy Blog covers synthesis approaches). With a shock coming on top of steady decline, though, it would be necessary to ramp up a wasteful and unsustainable bridging technology that doesn't require much expensive processing plant to be set up first, like biodiesel for some equipment and biobutanol for other equipment (made with current fermentation and sparging to refine it). They both sort of work but use far too many inputs at the expense of food crops to be sustainable, with current technology (that shows up in the fuel price) – but they could bridge shocks while buying time to do things right.
This article would make sense in a world without coal. But coal changes the equation. From Wikipedia:
Remaining reserves of conventional fossil fuels are estimated as:[8]
Fuel Energy reserves in ZJ
Coal 290.0
Oil 18.4
Gas 15.7
As you can see, total worldwide reserves of energy are mainly in the form of coal, not oil. Coal is dirtier and more expensive, but it puts a cap on the energy prices from peak oil. There is enough coal to sustain current production rate for 155 years, or to supply all the world’s energy for about 57. So don’t expect us to run out of fossil fuels anytime soon.
I totally agree w/ the market-based perspective on fossil fuels, but oil is not the whole picture.
The problem is that
1) the ability to sustain current production rate does no good at all, because it doesn’t offset the loss of oil, while
2) reserves equal to 57 years’ total energy needs is meaningless without additional information about the highest feasible rate of extraction and the energy cost of extracting it.
The second point is exactly the same kind of statistic those API ads use: “enough to fuel 60 million cars for 60 years,” or whatever. But the size of the reserves has nothing to do with how fast it’s feasible to extract them, or how much it will cost to do so.
I strongly suspect that when those factors are taken into account, we’re also close to Peak Coal.
And from a libertarian perspective, I don’t see how the coal companies could get away with mountaintop removal without some sort of preferential access to the land, and some sort of protection from ordinary common law tort liability for the negative externalities.
Climate change is an area of focus about which I must readily admit to not having all the facts. When I listen to the modern “liberals,” they say there’s a huge consensus on the issue in the scientific community. When I listen to conservatives, they say it’s a myth that there’s this “huge consensus,” and say that the actual evidence is spotty. I tend to conclude that the average conservatives and average modern “liberals” alike lack any substantial knowledge or expertise and are simply parroting what others within their respective movements have said.
Although conservatives have tended to see the “liberal” believe in global warming as amounting to religious faith (a perspective with which I cannot wholly disagree), I would have to say that the conservative rejection of global warming is just as religious, just as faith-based. I remain too much of an agnostic to simply accept either side.
I have read very little on the subject of global warming itself, with the exception of two articles (1, 2) by David Evans, wherein he argues that the evidence appears to indicate (1) that global warming is real and (2) that global warming is not man-caused. How accurate is Mr. Evans views? I don’t know.
With that said, your point about Peak Oil is an important one to make. Whether or not we’ve actually reached Peak Oil or not can be debated, but that CO2 emissions will decrease as a result of diminishing oil supplies seems pretty apparent.
Of course, I cannot agree with your statement about the business cycle, but that’s another topic for another time.
Cheers,
Alex Peak
Kevin Carson wrote “the ability to sustain current production rate does no good at all, because it doesn’t offset the loss of oil”.
Yes it does, because of what I brought out about substitutability – on those time scales.
“reserves equal to 57 years’ total energy needs is meaningless without additional information about the highest feasible rate of extraction and the energy cost of extracting it”.
The thing is, figures of that sort – if they are properly derived – have already done calculations of that sort, maybe implicitly by using methods like the graph I mentioned, and those issues are factored into the final result. It’s reasonable to challenge whether they were properly derived and ask for references and so on, but that information does not need to be adjusted for afterwards if they were.
We probably are close to Peak Coal, in terms of the life of the industry, but that still means it’s decades further off than Peak Oil and represents a realistic alternative until then (subject to there only being slow change, etc.). That means that Peak Oil probably does not provide much of a constraint to carbon dioxide emissions. Granted, higher prices might lead to lower liquid fuel end consumption – but the liquid fuel production will embed more coal burning to produce that smaller amount of end product, unless and until nuclear or other as yet unknown or undeveloped technologies are used to power the conversion processes. For Peak Oil to become the constraint, something else would have to constrain using coal for the substitute, probably both as fuel for the processes and as feedstock.
The market for oil will take care of the demand – for oil. However, just as the rest of the world proved Professor Malthus wrong about peak food, inventors will find some substitute for Peak Oil. Don’t look to energy shortages to rationalize distribution of either goods, profits or economic power. It is likely that the scale on which we trade will grow, not shrink, with time. Profits and power will change when everyone gets richer by doing it in a more egalitarian manner than is done now. There is no other reason, at least by Objectivist standards.
“…just as the rest of the world proved Professor Malthus wrong about peak food…”.
There are at least two things wrong with that: it’s “Reverend”, not “Professor”; and, he has not been proven wrong. That is, while he personally suspected a food bottleneck was looming in the near future of his time and place, his theories could not be that specific and only told the nature of the constraints to look out for. And in fact what occurred was not contrary to his reasoning but merely a shift in parameters – some one off increases in access to new lands and in land fertility from artificial measures. The situation still fits his pattern, so events have not disproven it any more than someone living through Russian Roulette shows that it will not, after all, kill you sooner or later.
Rev. Malthus is only right if we quick checking the gun before we fire to make sure the chamber is empty. So far advancing technology has kept up with the spinning gun. I suspect it will continue to keep up. There are a myriad of ways that we can dodge the Malthusian bullet, as well as the peak oil and warming bullets. I don’t expect the total collapse of Western Civiliation any time soon for any of these causes.
“So far advancing technology has kept up with the spinning gun. I suspect it will continue to keep up.”
Well, historically that simply isn’t true. Between Malthus’s time and about the 1880s when artificial fertilisers came in, advances in technology made absolutely no difference to Malthusian pressures. During that period of about three generations they receded for other reasons:-
- political changes that allowed food imports from further afield (mostly following from a period of peace and relative strength in Europe);
- opening up new lands from which to bring food and to which some emigrants could go (also largely a consequence of these political changes).
The technology needed to take advantage of these changes was already in place in the mid 18th century, even before Malthus. Advances made long distance freight even cheaper – but it was already practical, except for human interference like laws and wars.
“There are a myriad of ways that we can dodge the Malthusian bullet…”.
This doesn’t address the Malthusian argument, which acknowledges this but merely notes that the ability to dodge, so to speak, appears to grow more slowly than the need to dodge. Malthus agreed that there was no fixed barrier, that it could always be pushed back – he just noted the nature of the pressure growth and noted that it grew faster. So, historical successes in pushing back the barrier do not refute the argument unless they reveal a pushing back process that grows faster; if they don’t, they are just one offs and only change the parameters.
Some people have speculated that self reproducing machinery coupled with even slower than light interstellar travel would do it, as the means of support could grow exponentially faster than people and their needs. Alas, someone once looked into it and found that this was not so; cube square laws of expansion to new resource bases bring in the same pattern of limits, in the very long run but nevertheless in the end. So, what does “soon” have to do with “the total collapse of Western Civiliation [sic]“? And what does Malthus’s argument have to do with the latter anyway?
I think a Poor Richard’s quote is the most apt: Necessity is the mother of invention. As long as inventors can make money or gain personal advantage there will never be a need that does not spawn a solution. Malthus may not have anything to do with it, at least not directly. Regardless, the prospect of collapse for whatever reason is not something that I include in my calculations. War, yes. Disaster, of course. New Dark Ages, not as long as you can find and pressurize methane and run a generator off of it.
“imagine what will happen when the supply falls by half or more over the next generation!
So we can count on the coming astronomical increases in energy prices”
Are you investing in oil? Given the confidence exuded in this article, your mouth should be stuffed with money.