Peak Oil is the name given to the point in time when the rate of global petroleum extraction reaches it’s maximum. From that point onwards the rate of extraction will start slowing down as resources of petroleum are depleted. The estimated date of Peak Oil is varies amongst experts. Some say we have already reached peak oil whilst others are predicting it will be 2060 or beyond. However the majority of predictions seem to be in the range between 2010 and 2030.
The estimated date for Peak Oil has changed with the extraction of unconventional sources of fossil fuels such as tar sands and super-heavy oil. In addition the introduction of unconventional production methods such as horizontal drilling and fracking also mean that more oil can be extracted from oil fields than before. However, the enormous amount of conjecture over the date of Peak Oil does not undermine the fact that it will eventually happen, if it hasn’t already.
The consequences of Peak Oil
The price of oil has steadily increased this century, with relatively minor fluctuations. As more supply comes from unconventional resources and methods of extraction the price will increase further. As total supply declines in the coming decades demand will push the price of oil steadily up. Our modern economic machine is fuelled by cheap oil but energy will never be cheap again.
The alternatives to fossil fuels are all much more expensive. The cost of renewable energy is currently ’subsidised’ by the availability of cheap energy to produce and maintain its systems. In other words it takes energy to make energy. The difference between the energy output and the energy input is called net energy. The net energy of wind power, solar power and biomass is very low compared to fossil fuels. This is because fossil fuels are a very concentrated form of energy whilst wind, solar and biomass are very diffuse. Wind, solar and biomass are perfectly suited to small-scale ‘diffuse’ applications in households such as space heating, water heating and solar ovens.
Since the cost of energy will go up in the future, everything will cost more. This will tend to have a dampening effect on the economy and overall there will be less goods and services produced and consumed. Whilst this fact looks bad on the face of it, it will actually have many benefits:
- There will be less stuff i.e. smaller ecological footprint
- More stuff will be handmade
- With less automation there will be more work and less unemployment
- Local economies will be revitalised
- Slower pace of life