We use oil throughout society. For example, it’s in the goods we use, and it supplies energy to make our cars move. No doubt, as a civilization, we’ve been lucky to have access to crude oil as a cheap and readily accessible energy source, because it has spurred economic growth and technological innovation. We even use oil to produce and deliver wind turbines and solar panels, and these things in turn capture renewable energy. However, reliance on this cheap energy source has its consequences, so perhaps oil has made things too easy.

As a result, there are several reasons why we can’t continue to burn fossil fuels: (1) it’s a nonrenewable energy source with a high energy content, so it should be strategically conserved and used as needed; (2) burning oil, or the products that are made from crude oil such as gasoline and diesel, release pollutants into the atmosphere, thus making the air we breathe dirty (Los Angeles is synonymous to congested traffic and the resulting smog); and (3) carbon dioxide is released when we burn fossil fuels such as oil, and increased concentrations of atmospheric carbon dioxide creates a warming effect. No doubt, in order to avoid economic and social crises, the smartest policy would be to quickly move away from our dependency on oil. Certainly, passing substantive climate change legislation, modernizing our electricity grid to a smarter grid, implementing meaningful renewable energy portfolios, and producing sustainable alternative fuels, in addition to promoting energy conservation, can be remedies to our dependency on oil and alleviate the pain of peak oil. From Roger Diamond:

Peak oil follows this scenario as there is a finite amount of oil in the earth and until now we have been producing more and more every day, which has allowed economic growth based on growth in available energy and oil being the primary energy source for our society. Between 2005 and 2015 we have or will probably experience peak oil. From then on, energy is not so easy to get.

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Peak oil is not about suddenly having no power and no goods — it’s about having less and working harder to get that smaller amount. Enter EROEI — energy return on energy invested. The original large oil reservoirs exploited in the first half of the 20th century had EROEI of over 100:1. That means for every joule of energy you spent digging, drilling, processing and transporting you got more than 100 joules in return. It’s a bit like working for one hour and being paid enough money to cover your expenses for 100 hours. The easy life!

EROEI on oil shales, tar sands, deep oil and other remaining oil-like resources is less than 10:1 and even down at levels like 3:1 or worse. The results of this are that high-energy activities or products are going to go up in price, substantially. Think of flying, cement, aluminium, cars, hi-tech gadgetry, imported goods and virtually everything we take for granted in the average suburban Westernised existence.

Your life is going to change and the sooner you can prepare yourself for it, the better. This is not a doomsday prediction of instant civil war and living off cans of dog food. Just be warned that the oil age will wane and our lives will change along with it. Maybe for the better?! It all depends on our capacity to work and change together.

More peak oil analysis comes from Lester Brown at TreeHugger:

One way the oil prospect can be analyzed is by separating the world’s principal oil-producing countries into two groups—those where production is falling and those where it is still rising—is illuminating. Of the 23 leading oil producers, output appears to have peaked in 15 and to still be rising in eight. The post-peak countries range from the United States (the only country other than Saudi Arabia to ever pump more than 9 million barrels of oil per day) and Venezuela (where oil production peaked in 1970) to the two North Sea oil producers, the United Kingdom and Norway, where production peaked in 1999 and 2000 respectively. U.S. oil output, which peaked at 9.6 million barrels a day in 1970, dropped to 5.4 million barrels a day in 2004—a fall of 44 percent. Venezuela’s output has dropped 31 percent since 1970.

The eight pre-peak countries are dominated by the world’s leading oil producers, Saudi Arabia and Russia. Other countries with substantial potential for increasing production are Canada, largely because of its tar sands, and Kazakhstan, which is still developing its oil resources. The other four pre-peak countries are Algeria, Angola, China, and Mexico.

The biggest question mark among these eight countries is Saudi Arabia. Its production technically peaked in 1980 at 9.9 million barrels a day and output is now nearly 1 million barrels a day below that. It is included as a country with rising production only on the basis of statements by Saudi officials that the country could produce far more. However, some analysts doubt whether the Saudis can raise output much beyond its current production. Some of its older oil fields are largely depleted, and it remains to be seen whether pumping from new fields will be sufficient to more than offset the loss from the old ones.

This analysis comes down to whether production will actually increase enough in the eight pre-peak countries to offset the declines under way in the 15 countries where production has already peaked. In volume of output, the two groups have essentially the same total production capacity. If production begins to fall in any one of the eight, however, world output could decline.

Another way to consider oil production prospects is to look at the actions of the major oil companies themselves. While some CEOs sound very bullish about the growth of future production, their actions suggest a less confident outlook.

One bit of evidence of this is the decision by leading oil companies to invest heavily in buying up their own stocks. ExxonMobil, for example, with the largest quarterly profit of any company on record—$10.7 billion in the fourth quarter of 2005—invested nearly $10 billion in buying back its own stock. ChevronTexaco used $2.5 billion of its profits to buy back stock. With little new oil to be discovered and world oil demand growing fast, companies appear to be realizing that their reserves will become even more valuable in the future.

Closely related to this behavior is the lack of any substantial increases in exploration and development in 2005 even with oil prices well above $50 a barrel. This suggests that the companies agree with petroleum geologists who say that 95 percent of all the oil in the world has already been discovered. “The whole world has now been seismically searched and picked over,” says independent geologist Colin Campbell. “Geological knowledge has improved enormously in the past 30 years and it is almost inconceivable now that major fields remain to be found.” This also implies that it may take a lot of costly exploration and drilling to find that remaining 5 percent.

Images found here and here

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