The Collapse of Civilization — Part 3
Is "Peak Oil" Here?
Deffeyes, Kenneth S. Beyond Oil: The View from
Hubbert’s Peak. New York: Hill and Wang, 2005.
Simmons, Matthew R. Twilight in the Desert: The
Coming Saudi Oil Shock and the World Economy. Hoboken: John Wiley and
"Peak oil" does not refer to the time when we
run out of oil, but when we are halfway through our oil supplies.
The halfway point is important because the total world production of oil
will likely fit a standard bell-shaped curve: it will slowly rise year by
year, reach a peak, and then decline. This is basically what has happened
with U. S. oil production, with oil production in other countries, and in
many individual oil fields. Two new books, both by experts in petroleum
geology, suggest that for all intents and purposes "peak oil"
for the entire world is here — perhaps in a few years, perhaps as early
as this fall. Beyond Oil and Twilight in the Desert are both
about the fact of oil depletion, not about the economics of the aftermath
of oil depletion (despite the subtitle to Simmons’ book, there is little
discussion of the world economy).
The ramifications of a decline in oil supplies is
enormous. Cheap energy underlies much of our economy, including the whole
structure of our car culture based on suburbs, distant shopping centers,
and an agriculture which is heavily oil-dependent. If oil supplies go
down, the supply of everything which depends on oil will become
problematic — very problematic. The only recent historical
analogy is the oil shocks of 1973 and 1979; but unlike the 1970's, this
time the decrease in oil supplies would be permanent. A global
depression, or worse, is entirely possible. Unlike other environmental
problems, this has barely appeared on the political radar screen and the
world is almost completely unprepared.
But wait! Not everyone thinks "peak oil" is
here. The U. S. Geological Survey has estimated that we will discover 674
billion barrels of oil between 1995 and 2025. Most people
using these figures thinks that oil will peak in about 2036
— three decades hence — during which time world oil production will
continue to increase (though the USGS itself has made no estimate as to
when oil will peak). "I can see no peak for the next 20 or 30 years," says energy consultant Michael
Lynch, who criticizes early-peak advocates such as Deffeyes.
If these critics are right, we have plenty of time to
drive SUVs, fly around the globe, and so forth, and still have plenty of
time to ramp up alternative energy sources at a leisurely pace for the
eventual decline of oil some generations hence. Daniel Yergin, a Pulitzer
prize winner who has written about oil, says that oil will peak after 2020. Well,
how do we know that the USGS, Lynch, or Yergin, aren’t right after all? Is it
time to panic yet?
Beyond Oil is very helpful in addressing these
questions. Kenneth Deffeyes approaches the question from an analytical
point of view, explaining the methods of H. King Hubbert, the "patron
saint" of all the peak oil theorists. According to the "Hubbertians,"
a peak in world oil supplies is very close. It was Hubbert who, in the
1950's, successfully predicted that U. S. oil production would peak around
the year 1970. Hubbert’s prediction was greeted with complete disbelief
when it was first made, but events proved him right. Hubbert then
predicted that world oil production would peak in the mid-1990's or in the
year 2000 — something which did not happen, though Deffeyes argues that
Hubbert wasn’t wrong by that much, and further that Hubbert’s
underlying methodology was valid.
So what is the basis of Hubbert’s method? Was it just
luck, an educated guess, or what? The genius of Beyond Oil is that
Deffeyes is able to explain very elegantly both the mathematics and the
underlying assumptions behind Hubbert’s ideas. Moreover, he does it in a
single chapter — chapter 3 — which alone makes the book worth buying.
Hubbert’s original work involved some serious and
complex mathematics — "impenetrable to many observers" is how
one writer put it. But Deffeyes found an alternative way of explaining it
which requires no more than a few simple algebraic equations. Let’s put
it this way: what I got in eighth-grade algebra was sufficient, and I
could actually understand the mathematics myself, and I am not exactly
"Mr. Mathematical Genius." If it’s been a few years since you’ve
done algebra, you may need to sharpen your pencil and try to work the
equations out for yourself, but you can do it and it’s worth the effort
and you will know more about the subject than the leaders of the free
world. (I had forgotten what the "slope" of a line is, but I
found the answer in a dictionary: change in "x" value divided by
change in "y" value.)
The underlying assumption of Hubbert’s mathematics is
simply this: the ability to produce oil is primarily based on the fraction
of the oil that remains unproduced. Likewise, the ability to discover
oil is primarily based on the fraction of the oil that remains
undiscovered. As Deffeyes puts it: "The ease of catching fish depends
mostly on how many fish remain in the pond." This of course is a hypothesis.
Others might argue that the ability to produce oil depends chiefly on the
price of oil, or the kind of fancy high-tech equipment you’ve got. But
the Hubbert hypothesis seems to explain the rise and decline of U. S. oil
production, the rise and decline of oil production in other countries, and
even the rise and decline of oil production in individual oil fields. This
is not to say that the price of oil and equipment doesn’t matter, just
that it doesn’t seem to matter that much.
Deffeyes does not stop with oil, but goes on to explain
the advantages and drawbacks of natural gas, tar sands, coal, uranium, gas
hydrates, and hydrogen, surveying the entire energy "scene." All
of these have problems and they cannot be easily and quickly be used to
substitute for missing oil supplies. We actually do not face an
"energy crisis" per se — we’ve got plenty of coal and
uranium, for example, at least for the time being — but a "liquid
fuels crisis." Electricity won’t work in cars (electric cars have too many
problems with batteries and such), and fuel cells (which could use hydrogen that has been created
by electricity) are years away from being practical. We need something
liquid to put in our gas tanks that will make our cars and trucks run. Thus, the problem
of going "beyond oil."
Twilight in the Desert
Twilight in the Desert addresses a small but important
question of detail in the "peak oil" theory — the small detail
of oil in Saudi Arabia, which has more oil than any other country in the
world. A key objection to Hubbert’s methodology is that Saudi oil
reserves are much greater than the "Hubbertians" have assumed.
Saudi Arabia has enough announced oil reserves to postpone the peak of oil
production for many years. But therein lies a tale, which Matthew Simmons
tells in loving detail.
After 1979, when Saudi nationals took over management of
Saudi oil, Saudi oil reserves shot up dramatically — from 100 billion
barrels of oil to 260 billion barrels in a little more than a decade. Yet
there’s a quite a bit of secretiveness over the Saudi reserve estimates,
which have not been independently confirmed — and there were no dramatic
announcements of earth-shaking new discoveries during this time. Most
"Hubbertians" have dismissed the Saudi oil reserve estimates as
politically motivated — perhaps having more to do with the fact that the
allowed OPEC production was pegged to oil reserves.
So how much oil do the Saudis really have? We’d
like just a little more detail here, and this is where Simmons steps in.
He tells a pretty convincing story that Saudi oil production is pretty
close to its peak, if it didn’t pass it in the early 1980's when the
Saudis stretched their production to the maximum during the Iranian oil
crisis. Simmons starts at the very beginning, explaining the fascinating
story of the origins of the modern Saudi state, the discovery of oil in
the 1930's, the involvement of foreign oil corporations, the OPEC oil
embargo of 1973, the takeover of the Saudi oil industry by Saudi nationals
in 1979, and goes into some detail about the "veil of secrecy"
around the Saudi oil reserves.
But then, towards the middle of the book, he launches into
a detailed, pretty technical examination of each individual Saudi oil
field. Simmons will probably lose a lot of general readers when they get
to this section. On the other hand, all the experts out there — all the
petroleum geologists and their graduate students out at the Colorado
School of Mines, for example — were probably yawning during the first
half of the book, and will probably find this detailed technical section
to be the most interesting. It’s good that Simmons has dished out
something for everyone here, and it also means that even the non-experts
can judge the book based on how the petroleum geologists out there react
to this second part.
But even his more technical discussions raised several
interesting points that I was not aware of which are germane to the
discussion of peak oil, and I will mention them here.
1. Overproduction. Before I read Simmons’ book I
was not aware that such a thing was even possible. An oil field can be
"overproduced"; if you draw oil out of it too rapidly, you will
damage the field, with the result that for a temporary gain in output, you
will actually recover less total oil in the long run; some oil will
be left in the ground. Simmons thinks that this may very well have
happened when the Saudis greatly increased their output from 1978-1981
during the Iranian crisis, so we may actually recover less Middle East oil
as a consequence.
2. Mature oil fields. An oil field does not just
one day stop producing. At first the oil will come out of the ground under
its own pressure, then later you have to pump water into the oil field to
increase the pressure, then the "water cut" increases, and so
forth. Simmons makes a strong case that the Saudi fields are
"mature" fields in this sense, they are well along in their
3. New discovery of Saudi oil. Well, maybe there’s
more oil in Saudi Arabia that our new, fancier, high-tech equipment might
discover? Simmons considers this but concludes: "The real history of
Saudi Arabian oil exploration has been rather different than conventional
wisdom has assumed. The lack of additional great finds since the late
1960's was not due to a lack of effort. The effort was there. The oil was
The upshot of Simmons’ book is carefully stated. He
readily countenances the fact that it is possible, possible that
there is more oil in Saudi Arabia than we think. But he has read and
understands all the Saudi technical papers that have been published. The
evidence that the official Saudi oil reserves are anywhere close to
accurate is just not there, and the evidence further suggests that the oil
fields which are there are getting old. When the giant Saudi oil fields
begin their inevitable decline, there will be a major oil shock.
Here is the one point on which I would wish that Simmons
had provided a bit more information — not of the technical, but of the
political, variety. Granted that the Saudi technical reports of all the
problems they’ve been having belie their official line that there’s
plenty of oil left, the question still remains — why? Wouldn’t it be
in their best interest to admit that they can’t sustain their production
much longer? Wouldn’t that admission send oil prices skyrocketing,
resulting in even greater profits?
Simmons’ book suggests some possible answers. The Saudis
did wield their "oil sword" once before, in 1973, and the
results were not good. Demand for oil fell, and so did their income.
Unlike the Kuwaitis, the Saudis have a large and increasing population,
more dependent on their oil wealth than ever before. They may not want to
admit, even to themselves, that the source of their wealth is about to
enter an irreversible decline. They may find it easy to be misled by all
their sophisticated computer models, overlooking that these models can
only be as good as the assumptions underlying them.
So what do we do now?
After reading these books, there is little doubt that we
have a serious problem. The burden of proof is now on those maintaining
that there’s a lot more oil in the ground (e. g., Daniel Yergin) to give
us some evidence as to why the Hubbert model — which seem to have quite
a bit of empirical backing — should not be accepted. If "peak
oil" is not here yet, it would be reasonable to assume that it is not
more than a decade away.
There is so little visibility of the problem of "peak
oil" among either political or intellectual leaders that we literally
have no idea of what "peak oil" means in economic terms for a
world in which everyone’s plans have confidently assumed the existence
of plentiful and increasing oil supplies. Recession, depression, massive
unemployment, a stock market crash, war, famine, and disease, may all be
more likely than not. Obviously to fully answer the question "what
now?" would be another book, or several books. I would suggest that
this question requires answering two further questions: (1) How did this
happen, that "peak oil" is here with so little warning? (2) What
kind of a society will we live in, and should we work for, in light of
We need to answer both questions together. Coming up with
an ideal society requires, at least, fixing the social "warning
lights" which failed to go off and tell us about this problem in the
first place. If "peak oil" does arrive later this year, as
Deffeyes thinks probable, it will be an almost complete surprise. It will
be a surprise not only to the political leaders and the public, but even
to the dissident factions in society whom we’d ordinarily look to for
warning about such things. Because it is so totally unanticipated, this
question is still not on the radar screen of the vast preponderance even
of the informed public. If we’re lucky, we may yet have a few years to
get our act together. The day is coming — and it could be soon — when
this question will be at the top of everyone’s queue, and no one
will really be prepared, even we ourselves who sit down typing out
missives sounding the alarm.
"The scientists were warning us, but we didn’t
listen." This is part of the explanation, but it isn’t the whole
answer. Most scientists (e. g. psychologists and biochemists) don’t have
anything to say about "peak oil" at all. Indeed, economists are
still mostly in denial about "peak oil" — they’re the ones
(like Yergin) who are claiming it will be a couple of decades hence. We’ll
need their help to sort out this mess, so let’s not everyone rush out
and burn them at the stake. What happens when the price of oil goes up to
two, three, or ten times its current cost, with no substitutes around? An
economist probably holds the answer, if we can just get his or her
"The environmentalists were warning us, but we didn’t
listen." This, too, is part of the explanation, but it also isn’t
the whole answer. Environmentalists aren’t talking about "peak
oil" that much. The July / August 2005 issue of WorldWatch,
about as enlightened a source as we’re likely to get, has discussions on
diesels versus hybrids, solar energy on Lakota reservations, clean water,
and Antarctic melting. WorldWatch’s Vital Signs 2005 states that
fossil fuel use surged in 2005, and notes briefly, "a growing number
of geologists question whether oil reserves are sufficient to keep
production rising." The Summer 2005 Peak and Prairie (local
Sierra Club newsletter) features wind power and recycling. Certainly much
of this will be relevant in a post-peak oil world, but there’s no
discussion of "peak oil" as such. It’s interesting, too, that
the petroleum geologists who are now raising this issue are not part of
any "social movements" as we understand them — they’re just
scientists and engineers doing their job.
A key part of the answer has to do with economics. Many
economists view the problem as a technical one: as the price of energy
goes up, the incentive to find a solution will increase, and if demand
exceeds supply the condition will continue until finally there will be
enough money on the table so that huge resources can be brought to bear on
the problem and find a solution. The economists should be raising the
alarm, because the way we’re going to feel this crisis — at least at
first — will be economic; but they’re not. One Hubbertian (I can’t
locate the quote now) derisively said, "They think that if you show
up at the cashier’s window with enough money, that God is going to put
more oil in the ground."
Nor are politicians — those creatures exquisitely
attuned to the public eye — entirely to blame, either. I would urge
people who just want to say "Bush did it! Impeach the bastard!"
to take a closer look at the reality of the scientific community itself
and the dissident elements within our society. The scientific community,
the informed public, and the dissident groups within it, are not really
talking with each other. Example: the current issue of VegNews, an
excellent vegetarian / vegan publication, advertises itself as the
"Vegetarian Travel Issue." Even at this late date and rising oil
prices, the idea that there is a problem with "travel" is pretty
new, even among groups that are very much against the status quo. It’s
like the blind men and the elephant; they all have part of the solution.
Just as we don’t fully understand the problem, we also
don’t fully understand the solution. We need to remake science and
society in a different mold, and while tremendous changes are in store for
the next generation, it may take more than one generation to do the job.
We can’t completely ditch economics — there’s something to be said
about free enterprise versus standing in lines under the weight of a state
bureaucracy which apportions things badly, as in the late Soviet Union. On
the other hand, the "economic" way of viewing things covers up
areas of the common good which should be regulated and aren’t, in the
name of glorious free enterprise. Key among these public goods are the
soil, energy, water, and air. It’s going to be more than just tweaking a
few taxes here and there.
It is not even the large corporations which are to blame,
but the economic ideology which permeates them and our own minds as well.
This ideology controls many more "cultural" factors than we are
aware of: it does not simply sit back and set prices in response to supply
and demand. Who decreed that we should have a car culture? Who decreed
that we should work ever longer hours for an ever greater accumulation of
stuff? Who decreed that we have to kill creatures, lots of creatures in a
very bloody and cruel fashion, in order to eat? That has been the paradigm
of industrial civilization and the paradigm of most of the dissidents as
well as the leaders. At best some people see part of the problem (e. g.
vegetarians) and try to cope with that.
I can’t fully outline and defend a solution in this
short essay, but I can summarize the beginning here. Two things which have
to change are our car culture and the desire for endless increasing
consumption. When we spell out what this means, it will probably mean that
government is the employer of last resort, that national service is a
higher ideal than private enterprise, that protection and regulation of
the environment trumps just about everything else in the economy, that
agriculture and science will command considerably more respect than they
do now, and that vegetarianism and riding bicycles will become the norm.
Kenneth Deffeyes summarizes the task for all of the smart
people in the world (that’s YOU if you’re reading this article and
have gotten this far):
"Business as usual is not in the cards. Muddling
through is not strong enough medicine. Whether we like it or not, there
will be major re-arrangements in the world economy. It would be more
orderly if we were to generate a blueprint for a society constrained by
the availability of resources. Then we need a noncatastrophic pathway that
takes us from here to that blueprint. Welcome to the post-Hubbert world,
the world beyond oil."
So sharpen your pencils and put on your thinking caps.
Peak oil may not be here this month or next month, but the planet will
need all the help it can get when it does, and we’d better get ready.
(updated Dec. 1, 2005)
Related articles on "The Collapse of
Part 1: Collapse -- Coming Soon to
a Civilization Near You!
A review of books by Jared Diamond, J. R. McNeill, and Joseph Tainter,
on the collapse of civilizations and the current state of our own.
Part 2: Reviews of Better
Off and The Long Emergency
Reviews of two books by James Kunstler and Eric Brende which offer
alternative visions of possible futures.
Part 3: Is
Peak Oil Here?, reviews of books by Ken Deffeys and Matt Simmons on
Part 4: Five
More Good Books on the Collapse of Civilization! Reviews of
books by Jeremy Legget, Lindsey Grant, Ronald Wright, John Howe, and
Part 5: Decline
and Fall, a review of Are We Rome?
Part 6: Peak
Oil at the Movies, a review of A Crude Awakening, Crude Impact,
and What a Way to Go.