During the past decade a growing chorus of energy analysts has warned of the approach of "Peak Oil," the time when the global rate of extraction of petroleum will reach a maximum and begin its inevitable decline.
I do not propose here to provide more than a bare-bones explanation of Peak Oil (detailed information can be accessed by way of the footnotes). Suffice it to say that while there is some dispute among experts as to when it will occur, there is none as to whether. The global peak is merely the cumulative result of production peaks in individual oilfields and in whole oil-producing nations, and these mini-peaks are occurring at an increasing rate.
...Clearly the timing of the global peak is crucial. If it were to happen soon, the consequences would be devastating. Oil has become the world's foremost energy resource. There is no ready substitute, and decades will be required to wean societies from it. Peak Oil could therefore constitute the greatest economic challenge since the dawn of the industrial revolution.
This is the essential message that a small but growing ad hoc band of analysts has been spreading for the past decade. That message is gradually sinking in: the term "Peak Oil" appears in the press with increasing frequency. For policy makers initially encountering it, four questions seem paramount:
... 3. How is the world responding?
In 1998, policy makers had virtually no awareness of Peak Oil as an issue. Now there are Peak Oil groups within the US Congress and the British Parliament, and individual members of government in many other countries are keenly aware of the situation. Government reports have been issued in several nations.19 Sweden has made a national commitment to drastically reduce its petroleum dependence by 2020.20 Cities such as Portland, Oregon, and Oakland, California have undertaken assessments of petroleum supply vulnerabilities and begun efforts to reduce their exposure.21 A few Non-Governmental Organizations (NGOs) have been formed for the purpose of alerting government at all levels to the problem and helping develop sensible policy responsesâ€”notably, the Association for the Study of Peak Oil and Gas (ASPO), and Post Carbon Institute.22 On a smaller scale, grass-roots efforts in several countries (especially the US, Canada, Australia, and Great Britain) have resulted in the creation of "Relocalization Networks" and "Transition Towns" wherein ordinary citizens participate in the development of local strategies to deal with the likely consequences of Peak Oil.23
Unfortunately, this response is woefully insufficient given the scale of the challenge. There are two reasons for the slow and meager response: first, Governments are understandably loath to undertake proactive steps to reduce petroleum dependency if doing so would result in short-term economic sacrifice; and second, as noted earlier, in recent years some major oil companies and governmental agencies have issued assurances that the global oil production peak is decades away.24
Now that those assurances are wearing thin and the IEA has begun issuing warnings about the adequacy of future supplies, what are the prospects for substantial change in policy among the major Western governments? The four-year period extending from 2005 to 2009 has already seenâ€”or will soon seeâ€”changes in leadership in several key nations. Might this be an opportunity for a new energy paradigm to take root on both sides of the Atlantic?
... 4. What would be a sufficient response?
One way to avert or ameliorate the impacts of Peak Oil would be to implement a global agreement to proactively, cooperatively reduce the use of oil (effectively, a reduction in demand) ahead of actual production declines. Setting a bold but realistic mandatory target for demand restraint would reduce price volatility, aid with preparation and planning, and reduce international competition for remaining supplies. A proposal along these lines was put forward by physicist Albert Bartlett in 1986, and a similar one by petroleum geologist Colin Campbell in 1998; Campbell's proposal was the subject of a book by the present author (The Oil Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse).28
...In order to enlist public support for such efforts, governments would need to devote significant resources to public education campaigns.
In addition, planning and substantial public investment would be needed in three critical areas: transportation, agriculture, and chemicals industries. ...
This issue is a joint publication with the journal Public Policy Research, www.ippr.org.uk/publicationsandreports/?id=2385