Introduction & History of Peak Oil

Hi there! 

I want to take a moment to introduce this blog. This blog is going to consist of a comprehensive overview of the peak oil theory and all the social, economic, and environmental implications it will have on the future of a petro world economy. For those of you reading this who do not know what peak oil is, that is ok, by the time you are done reading my series of blog entries you should be confident in knowing what it is.


Introduction

Peak oil is a theory that states that after a certain amount of time and at a certain rate of consumption, the world's fossil fuel supplies will eventually reach the highest point of production naturally possible and then will only begin to decrease after that. Peak oil is used to describe the global maximum in conventional crude oil production and is scheduled to happen in the very near future if it hasn't already. Peak oil is one of the most highly debated and deliberated issues in academic circles but outside of colleges and universities it is not mentioned nearly as much as it should be. Capitalist society and our suburban sprawled out landscapes of unnecessarily wasteful lifestyles will be a thing of the past. With increasing population and decreasing resources we are in store for a turbulent future. 


...Wait Im already sounding like one of those peak oil alarmist that come off more ridiculous than convincing and even less educated so instead Im going to present two videos that I think are good at giving a quick visual introduction to peak oil. The second one even represents some history of oil production which I will also get into in this blog entry. 

 Source: Scott McLean 

 Youtube

Source: Username; Oilyboyd

Youtube

Scholars who write or speak about peak oil generally take their arguments in one of two routes, either environmental impacts or economic impacts. What is important to realize is that the environmental actually represents what is causing peak oil and the economy is what is primarily going to be effected initially. Before the peak production was controlled by people, we supplied was much or as little as we wanted. After the peak geological forces out of our control are going to supply us as much oil as the earth can give and inevitably production will decline, just when the world is demanding more and more of it. In economics this is called a shortage and leads to the increase in price. Similar to what happened in 1973, which was of course an artificial or man-made shortage but definitely gave us a preview of what is to come when oil really runs out.

History of Peak Oil

The basis of the peak oil argument originates from Thomas Malthus in his 1798 publication where he outlines the fact that human beings will forever continue to reproduce and consume food regardless of environmental factors, and that causes there to be a conflict between how much the earth can physically produce and sustain and how much we as humans need to survive (Deffeyes, pg. 46). The peak oil argument is essentially a Malthusian one. Now that oil production is so inextricably linked to every aspect of our lives, including food production and distribution, when it runs out, it is going to be that much more difficult to provide food to the seven billion people on this planet. It is remarkable to think how ahead of his time Malthus was and if he thought he was having problems with population surges and food shortages, it would be interesting to see what he thinks about our world today now that population is about seven times higher than it was in the 1800s (Thompson, pg. 355). 


The next person to run with the scarcity issue you could say, actually invented the peak oil theory. Marion King Hubbert developed a theory that US oil production would peak in 1970 and later, that the world's oil supplies will also peak (Naghavi, pg. 6). Hubbert and his research team developed a model, later named after him that was essentially a bell curve representing the supply of oil production. 

His predictions with time, as seen below, have proven true. US oil supply did peak in 1970 and has only decreased since then.

 The reason it is so important that everyone be aware of peak oil and its potential consequences is because, as shown in Video 1, oil is such a fundamental part of our lives. But people only seem to care for the peak oil argument when the oil prices are high. In fact, people's concern about oil supply and production levels only seems to be positively correlated to oil price, as one goes up so does the other. "The more awareness of the problem has probably been reached at the beginning of 2008, when the price of oil has reached, and then passed the value of $100" (Naghavi, pg. 2). This correlation has never been more apparent than in the 1973 oil embargo when OPEC stopped consulting with foreign oil companies and decided to raise oil prices primarily by restricting supply. Their decision to restrict oil supplies to the West began with many developed countries like the United States supporting Israel during the Arab-Israeli War of 1973 (Horton, pg. 1).