Peak Oil Has Arrived: Report Warns of Social Meltdown

Peak Oil is here and was reached in 2006, announced the Energy Watch Group
in London on October 22, 2007. This simple statement will progressively
affect our whole society, particularly our food production, energy and
transportation systems. Our politicians, John Howard and Kevin Rudd,
have both offered major taxcuts to buy our vote and extensive funding
for road projects. But before you take up the offer by either of these
politicians reflect on that peak oil news. Demand for oil is already
outstripping supply with the industrialization of India and China. Oil
production is at capacity and will soon start to decline at an
increasing rate. Crude oil hit $92 a barrel this week and is set to
rise even further once the decline in production becomes apparent.

"The most alarming finding is the steep decline of the oil
supply after peak", warns Jörg Schindler from the Energy Watch Group.
This result, together with the timing of the peak, is obviously in
sharp contrast to the projections by the International Energy Agency
(IEA). "Since crude oil is the most important energy carrier at a
global scale and since all kinds of transport rely heavily on oil, the
future oil availability is of paramount importance as it entails
completely different actions by politics, business
and individuals.", says Schindler.

Until recently the International Energy Agency has denied that
a fundamental change of energy supply is likely to happen in the near
or medium term future. Hans-Josef Fell MP, a prominent Green Party
member of the German Parliament said "The message by the IEA, namely
that business as usual will also be possible in future, sends a
diffusing signal to the markets and blocks investments in already
available renewable
energy technologies."

The
Energy Watch Group was initiated by Hans-Josef Fell, Member of the
German Parliament (deutscher Bundestag) since 1998, Speaker for the
Energy and Technology Policy of the Parliamentary Party Alliance 90/The
Green Party and Chairman of the Environment Committee, Nature
Conservation and Nuclear Safety. Parliamentarians from other countries
have since become involved in the organisation which is supported by
the Ludwig-Bölkow-Foundation. Funding by the foundation allows project
scientists to work on studies independently of Government and company
interests concerning the shortage of fossil and atomic energy
resources, development scenarios for regenerative energy sources as
well as strategies deriving from these for a long-term secure energy
supply at affordable prices.

The report says that remaining world oil reserves are estimated
to be 1,255 Gb (Giga barrel) according to the industry database HIS
(2006). But the Energy Watch Group (EWG) contradict this figure and say
that there are sound reasons to modify these figures for some regions
and key countries, leading to an estimate of 854 Gb. The EWG analysis
is based primarily on production data which is more transparent and
thus more reliable than reserves data which in the past have been
frequently "adjusted".

Peak Oil is now, the report says, and it signals that
human society is at the beginning of a structural change of its
economic system. A sharp decline of fossil fuel supplies will influence
almost all aspects of daily life according to the report. Climate
change will also force mankind to change energy consumption patterns by
significantly reducing the burning of fossil fuels.

The report warns that supply shortages could easily lead to
disturbing scenes of mass unrest and a meltdown of society. "My
experience of debating the peak oil issue with the oil industry, and
trying to alert Whitehall to it, is that there is a culture of
institutionalised denial in government and the energy industry. As the
evidence of an early peak in production unfolds, this becomes
increasingly impossible to
understand", says Jeremy Leggett, the Solarcentury CEO and former
member of the British Government’s Renewables Advisory Board.

Here in Australia there have been calls for research and
development of renewable technologies going back at least 30 years (the
1970s). Justice Fox in his wide-ranging First Report of the Ranger
Uranium Enquiry made a number of recommendations that as far as I can
see have never been carried out by the Fraser, Hawke, Keating or Howard
Governments. Justice Fox was very perceptive and he recommended that
the Australian Government should: develop a national energy policy and
review it regularly; take immediate steps for instituting programs of
research and development into liquid fuels to replace petroleum, and
energy sources other than fossil fuels and nuclear energy; institute a
national program of energy conservation; and take into account the
energy needs and resources of developing countries.

If any Federal Government had taken all of Justice Fox's
recommendations seriously we would be well along with dealing with peak
oil and with responding to climate change with minimal effort. We would
probably be world leaders in energy conservation programs, solar
thermal power systems, geothermal power, solar photo-voltaic power and
wind energy systems and exporting all these technologies to the rest of
the world, as well as having reduced carbon emissions.

Instead, succeeding Governments, both Labor and Liberal, have
continued to fund the Australia Nuclear Science and Technology
Organisation while a pittance in comparison has been devoted to the
development of alternative energy systems. In fact, according to
Greenpeace in a report produced in early September, Hung out to Dry: Federal Government guts renewable energy research,
the Howard Government have been actively sabotaging research and
development into alternative energy systems and investing large amounts
with their buddies in the coal industry in developing "clean coal"
technologies that are probably 15 -20 years away from large scale
commercial use. Now the crunch is upon us with both peak oil and
climate change. Time is fast running out for making structural changes
in our energy and transport systems to cushion the impact of peak oil.

But both major parties this federal election are committing
funding to expensive road expansion projects when the prospects for
road transport are looking particularly bleak with the projected
increase in fuel prices as oil demand and prices skyrockets. Neither
major party are pledging large scale expansion of the public transport
system which may soften the social impact of peak oil and reduce
greenhouse emissions. Most food production is now highly capital
intensive and relies on oil as a fuel. When oil is too expensive to
use, our farming techniques will need to adjust to smaller scale
agriculture more dependent on human labour. Areyou ready to become a
farmer?

Neither major party has set firm greenhouse gas emission targets to
combat climate change. Both major parties continue with a business as
usual scenario that can only hurt many people down the track.

If you want to see an example of a society forced to experience
peak oil, the Soviet withdrawal of support to Cuba after 1989
precipitated an oil crisis which forced food rationing, a major shakeup
of public transport and agricultural systems. "The Power of Community: How Cuba Survived Peak Oil"
is a documentary about how Cuba faced this crisis. Soon it will be our
turn for the crisis. How ready are you? How ready are our governments?
Do we really need expanded roads and taxcuts with a peak oil crisis
looming?

The executive summary conclusions of the report say that:

• Production will start to decline at a rate of several percent per
  year. By 2020, and even more by 2030, global oil supply will be
  dramatically lower. This will create a supply gap which can hardly be
  closed by growing contributions from other fossil, nuclear or
  alternative energy sources in this time frame.
• The world is at the beginning of a structural change of its
  economic system. This change will be triggered by declining fossil fuel
  supplies and will influence almost all aspects of our daily life.
• Climate change will also force humankind to change energy
  consumption patterns by reducing significantly the burning of fossil
  fuels.
• The now beginning transition period probably has its own
  rules which are valid only during this phase. Things might happen which
  we never experienced before and which we may never experience again
  once this transition period has ended. Our way of dealing with energy
  issues probably will have to change fundamentally.
• The International Energy Agency denies that a fundamental
  change of our energy supply is likely to happen in the near or medium
  term future. This sends a false signal to politicians, industry and
  consumers.

Oil Producing Countries Past Peak production

Sources:

• Energy Watch Group, London, 22 October 2007 - Peak Oil could trigger meltdown of society
• Energy Watch Group, London, 22 October 2007 - Crude Oil – The Supply Outlook Full Report and Executive Summary
• Greenpeace Australia Pacific, September 6, 2007 - Hung out to Dry: Federal Government guts renewable energy research
• Fox Report, 1976 - Recommendations