With crude oil having record gains, I find it deeply unsettling that America, a powerful and technologically advanced country, depends so much on oil, a nonrenewable resource. Certainly, oil is our Achilles’ heel, so why haven’t we started making an aggressive transition from nonrenewable resources to renewable resources?

One factor is the Bush Administration, which has had the opportunity to do so. Furthermore, the Bush Administration cannot claim ignorance, because the evidence and factors for switching to renewable resources are well known.

We much radically change our policies. We need to go from manufacturing, selling, and buying goods that are made to deteriorate quickly to providing longer lasting more sustainable materials; from driving Hummers to driving electric cars and plug-in hybrid electric vehicle (PHEV); from depending on an out of date electric grid to using information technology to modernize the electric grid; from providing a $700 billion dollar bailout to corporations to replacing a wasteful broken privatized healthcare system with a nationalized healthcare system; from demonizing international environmental treaties such as Kyoto to embracing them and making them work; and from depending on oil to depending on environmentally friendly bio-diesel, geothermal, solar, wave, wind, and other clean or renewable energies.

I believe the renewable energy infrastructure must be developed immediately, because now may already be too late. Certainly, $500 oil would be disastrous to America’s economy, but $500 oil would result in a devastating rush to consume and commodify Nature and her natural resources at an unprecedented rate.

I find it appalling that we have constructed such a complex civilization (albeit with a fragile infrastructure) and have based it on something that seemingly magically comes out of the ground. We can’t continue to depend on foreign countries for our energy needs, especially when suppliers such as the Saudis may already be seeing their oil production peaking or even declining. From Fortune Magazine:

That the spike in oil prices earlier this year wasn’t a temporary market anomaly and the recent retreat in prices is just a misleading calm before a calamitous storm? That we’re headed toward $500-a-barrel oil?

.       .       .

Of course, if demand goes up but supply doesn’t, prices are apt to go through the roof. And unlike global oil production, global oil demand doesn’t appear to be anywhere near a peak. Both the U.S. government’s Energy Information Association and the independent International Energy Agency, based in Paris, estimate that worldwide demand will be more than 115 million barrels a day by 2030.

While demand growth in the United States has slowed recently due to higher prices, the EIA projects that China and India will more than pick up the slack. And the IEA recently warned that high prices won’t slow demand growth in emerging economies. If demand wants to go north of 100 million barrels a day and supply can’t break 90 million (or drops below 80 million, as Simmons believes will happen within five years), it will be a price squeeze felt around the world. The peak-oil crowd will be able to declare victory – but nobody will be celebrating.

.       .       .

The concept of peak oil was introduced to the world in the 1950s by a curmudgeonly Shell geophysicist named M. King Hubbert, who observed that the production of oilfields tended to follow a bell-shaped curve, peaking and then turning down sharply. He came up with a formula to quantify his theory. And in 1956 he was ridiculed within the industry for predicting that U.S. crude oil production would max out in the early 1970s. Sure enough, though, in 1970 the United States reached its apex at just under ten million barrels per day, or roughly what the Saudis produce now, and began a long slide down. (Hubbert later predicted that world oil production would peak in 1995. He was a bit early on that call.)

No one disputes that oil production will top out some day. It is, after all, a finite resource. The argument is about how far off the peak is. As Simmons and others point out, many of the world’s largest oilfields – Prudhoe Bay, the North Sea – have already gone into decline. The most optimistic estimate for the average depletion rate of the world’s currently producing oilfields is between 4% and 5% annually, or about four million barrels per day at our current rate of production. That means that each year we must find enough new oil to first replace those four million barrels of lost daily production before we even add enough to meet new demand. This is all the more worrisome because world oil discovery of new reserves has been slowing since the mid-20th century.

—
Photo source for attribution. The author or licensor of this image does not endorse my work or me and their image is protected under an attribution license.