I'm glad to see the surge of interest in the coming peak of world oil production, even though the prospect is grim. Once again, people are willing to think about non-renewable resources and the consequences of an economy based on them. After strong and effective conservation measures during the Carter years, America lapsed into a don't-worry-be-happy attitude toward energy. Now we seem to be waking up again.
Most of the new information stems from the work of two little-known scientists, both deceased: petroleum geologist M. King Hubbert and systems ecologist Howard Odum.
Hubbert's famous "peak" inspired several new books and a dozen websites about the coming production peak, including the excellent "Hubbert's Peak" and "The Party's Over." And here and there in these sources you see Odum's pioneering work on energy and economic value.
Hubbert was a petroleum geologist who worked for several major oil companies. At an industry symposium in the 50's, he analyzed US oil production, predicting it would peak in the 1970's and go into irreversable decline. His prediction was ridiculed by geologists and oil executives. But in fact the peak arrived about 1970, with the trend of production closely following his theoretical curve.
Hubbert also predicted, in 1974, that the peak of world production would come in the mid-1990s. Petroleum geologist Kenneth Defreyes recomputed Hubbert's model using the latest figures on oil reserves, and predicts a peak within a few years of 2010.
Once past the peak of world production, there will never again be enough oil in the pipeline to satisfy today's level of demand. There will be rising prices, periodic shortages, inflation and recession - stagflation, as we used to hear in the 1970s. But unlike the oil shocks of the 1970's, these trends will go on for decades until oil and natural gas are no longer significant as energy resources.
Economists say that higher energy prices will make alternative energy sources economical. The next logical step would be "shale oil" or tar sands. But funny things have happened on the way to the tar sands. As Deffreyes recalls, every time it seems that energy prices have risen high enough to make oil shale extraction economical, the costs of extraction have climbed in proportion! Describing this in "Hubbert's Peak", he seemed a little puzzled.
Howard Odum watched the same events unfold, and was not puzzled. His work on energy costs and net yield convinced him that shale oil would never be economical, because it would never yield more energy than was used in extracting it. He testified against proposals for shale oil development in Congress in the early 70's, but his warnings were discounted.
I joined one of Odum's seminars at the University of Florida in 1970. You almost had to be in class with him to get the flavor of his thinking; his writing had the bland, opaque quality of a polished PhD dissertation. Later he worked with his wife to produce a series of textbooks, but never became a popular author. His defining work was "Environmental Accounting", published in 1996.
The title gives a clue to his basic insights. Throughout his career, Odum struggled with concepts of the "quality" of a given fuel, "embedded energy", net energy.. Plain "calories" do not tell the real value of a substance. But he was criticized by colleagues for trying to contrast one form of energy with another, when a calorie was a calorie was a calorie.
Odum's final answer on energy and value was a concept called "emergy": the total cost of producing a given substance, measured in calories of sunlight. It's an accounting concept, not a physical measure. Sunlight energy is taken as the baseline, since it's only source of energy "income" to our planet.
Emergy (spelled with an "m") cost includes both the work done by nature and the work done by man. When you start to audit nature's books this way, you see clearly that some fuels are net losses and that some "free" goods are created at great cost. You see how heavily every activity in our economy is subsidized by cheap energy, even when it involves no fuel or electric power.
Emergy analysis, or its 1970's precursor, told Howard Odum that oil shale would never work out. It told him that solar energy would not be useful except in special situations- space heating or water heating in warm climates- where it was worth spending excessive emergy in labor and materials to collect some heat at the right place and time.
I believe that in a few years every college graduate will have heard of emergy and the Hubbert peak, and everyone will have a better sense of the value of nature's gifts. Hubbert and Odum left priceless legacies, and all our names are in their wills.