What is "peak oil" and why should we worry?


Peak Oil is entering the mainstream. A phrase once considered synonymous with “The End of Oil” – the point at which global oil production reaches its peak – is now a subject for serious debate. Even if it still prompts some enthusiasts into peculiar flights of fancy. John Roberts examines the arguments from a recent conference.

What is really important about “peak oil”, as was demonstrated by a conference on the topic in Lisbon in May, is that some serious people in some very serious quarters indeed are starting to think about what happens as and when the world’s oil production reaches a peak and thus, by definition, starts to decline. There are, of course, innumerable differences of definition that still need to be resolved. Some advocates carefully confine their comments to “conventional oil”, some use the term “regular oil”, others consider that arguments about when oil production might be about to decline should also take into account the impact of non-conventional oil resources, such as heavy oil, oil sands and shale oil. Still others consider that what really needs to be addressed is the ability to produce liquid fuels to serve global transportation requirements, and that the key figure we should study each year is the total volume of liquid fuels – whether produced from oil, gas, coal or biomass.


Taking it seriously


"The concept of peak oil is very realistic. Most people would agree. What we disagree over is the timing..." - Dr Herman Franssen, former chief economist with both the US Department of Energy & IEA
But the bottom line is that whereas in the past the concept of peak oil was all too often taken to be either the preserve of geologists or a rallying cry for energy Luddites, it is now a concept to which institutions such as the US Department of Energy and a number of oil companies are paying serious attention. Thus when the Association of Peak Oil held its latest workshop in Lisbon, there were speakers from a few oil companies as well as representatives from some key industrial groups – notably AB Volvo, speaking on alterative fuels for cars and trucks. However both the oil majors and governments were conspicuous by their absence (with the obvious exception of the Industry Ministry of the host nation, Portugal). Also absent, and reflecting the fact that the meeting was a gathering of aficionados of the concept, were the critics of the Peak Oil movement. So while speaker after speaker considered when various types of peak might occur, there was little debate on the core premise that at some stage – and most speakers thought this would be in the next few years, if it had not happened already – global oil production of whatever kind would peak.

Despite such limitations, the argument that the world needs not only to consider whether oil production might soon be entering an era in which production would either plateau out or start to decline, but also the steps that it might have to take to mitigate the impacts of such a development, were addressed by some very shrewd and respectable participants.

That the ASPO meetings have come a long way in just four years was highlighted by the presence of Dr Herman Franssen, the former chief economist with both the US Department of Energy and the International Energy Agency (IEA). Franssen, summing up the conference, told Energy Economist: “The concept of peak oil is very realistic. Most people would agree. What we disagree over is the timing. Peak oil people tend to believe it [the turning point] will be in five-to-ten years; critics tend to say 15- to-20 years. For something that takes hundreds of millions of years to form, whether it be 5-10 or 15-20 years is scarcely the point.

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Created: June 1, 2005

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