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What is "Peak Oil"?

People often think that when we eventually run out of oil, it will be like running out of petrol on a motorway - one minute you are cruising at 70mph, and the next you are stopped on the hard shoulder.

It won't be like that. Instead the price of oil will rise steeply, taking allied costs such as plastics, heating fuel, and food with them.

The high cost of oil will switch demand to other fossil fuels such as gas and coal, pushing them up too. Collectively we will all search for ways to minimise these costs in our lives, and reduce our energy consumption.

Ironically, there is a plus side to this; the high cost of energy could motivate us to change our lifestyles in ways that reduce Climate Change - provided we don't resort to burning dirty fuels.

The reason for price increase is known as "Peak Oil".

The daily rate of production from a typical oil well follows a bell curve like this:-

From a slow start the production rate grows until it reaches a peak after which the oil becomes more difficult and slower to extract, until it becomes un-economic and production stops.

If you add together all the oil wells in the world, you get a cumulative bell curve, where the daily rate of production peaks (Peak Oil) after which we are never able to produce at a higher daily rate.

See a pictoral explanation of Peak Oil

Unfortunately we are very close to Peak Oil now, and demand seems set to increase in line with global economic growth, particularly in the emerging economies of India and China.
So although you may feel reassured that we have used up only half the world's oil reserves, you should also be worried about oil prices.

So far in our history, the world has always had enough oil to meet the demand. Oil producing countries have artificially slowed output to maintain a steady growth in the price of oil.

Now we are at a point where it is clear that demand will vastly exceed supply and the price will rise dramatically. Experts talk of diesel at £1.50 a litre in 2015, and £10 a litre in 2020.

Perhaps more than climate change, "Peak Oil" will have a dramatic effect on our behaviour. When we act to mitigate climate change we have our children's lives in mind.
With Peak oil we will act to save money here and now.

See a pictoral explanation of Peak Oil

What will be the impact of Peak Oil?

Provided that we anticipate the rise in prices and adjust our way of life to maintain economic growth through this period, all may be well. However, there is a concern that oil price rises could choke off economic recovery, or if the price adjustment isn't enough to reduce the demand for oil, then there could be trouble.

We do have some precedents to help us; Cuba went through this process in 1989.
With the collapse of the Soviet Union, Cuba abruptly lost its main source of petroleum.
The country found itself without fuel for agricultural tractors or trucks to transport food to the cities. They responded by turning land within the cities to food growing, and using more manual labour.
The food is harvested and sold a few yards from where it was grown.

In 1989 Cuba lost its sole supply of oil when the Soviet Union collapsed
See how Cuba dealt with this problem 20 years ago

Today, the UK imports 40% of its food and 95% of all fruit. To learn more about the impact of Peak Oil on food visit www.Food4Macc.org


A Chatham House research paper. (see P13)

Wikipedia: "Peak Oil"

Guardian article Feb 2011

Climate change and the complexity of the energy global security supply solutions:
The global energy [r]evolution.

Download the paper (52pages, 13Mb, pdf)


What can we do about it?

Take a look at the Transition Town Movement