Peak oil FAQ

The goal here is not to provide all of the answers regarding peak oil, but to touch upon many of the questions asked most often. By all means, read up on the issues as much as you can. We provide lists of book, magazines, films, web sites, blogs, articles, and more sources of information in the resources section.

Q. What does "peak oil" mean?

Short Answer: It is the point at which easily (and cheaply) extractable oil is no longer available.

More Complete Answer: "Peak Oil" is the most common term for the end of cheap and easily available oil resources. The "peak" refers to a model created by M King Hubbert. A discussion of Hubbert's Peak can be found at Wikipedia - Hubbert's Peak. Briefly, the "peak" is the point at which any given oil well, field, or global oil supply, reaches the production peak. After that point, the remaining oil becomes increasingly costly to extract and refine. Peak oil as a term generally refers to the global availability of oil.

Energy Bulletin's Peak Oil Primer has a nice discussion of the basics of peak oil.

Q: What are the implications of peak oil?

A: Essentially any process, activity, or product that utilizes petroleum will become increasingly more expensive the further past the global peak we move. Most of the public awareness of this situation is felt as the gas pump. However, both modern societies and the global economy are based on cheap oil. It has fueled the rapid developments seen through the 20th century. We are now in a situation where everything from food production (industrial agriculture), to plastics, to transportation, is totally linked to this one resource. The cost and availability of petroleum will (and is) driving up the prices in all of these areas. Since the various industries this crosses also involves millions of jobs, each of those are impacted as well. This is why national and global economic collapse frequently comes up in peak oil discussions and scenarios.

Q. Can't we use the remaining oil in the oil fields?

A. As you pump deeper into the "heavy" oil it gets more expensive both to bring it to the surface, and to process it for traditional uses. The "heavy" crude has much higher mineral content - particularly sulfur. This means it takes more energy (and more water - another diminishing resource) to get it to the surface. It then must be more intensively processed to make it clean enough for most uses - particularly as fuel. As oil becomes scarcer the costs goes up which then makes the expense more "acceptable." Abandoned fields, and otherwise costly extraction (tar sands for example) become more attractive as the price is high enough to pursue these activities.

That is the rub, however - the cost is high enough to engage in increasingly expensive (and often environmentally destructive) oil extraction processes. Either way, cheap and easily available oil is now history.

Q: Can't we just shift to alternative energy sources and nuclear power?

A: Yes and no. Roughly 50% of oil consumption is for transportation purposes. When we look at generation of electricity, very little petroleum is used. According to the Department of Energy as of April 2005 Net Generation by Energy Source: Total (All Sectors), 1991 through April 2005, the breakdown of power generation by source is as follows (numbers are rounded):

As you can see from the above table, replacing petroleum source power generation would add only a small amount to other uses (petroleum energy generation in the U.S. is only 2.05% of total power generation). On the other hand, petroleum is not the only non-renewable energy source we need to consider. Natural gas is being pushed at this time, but it has already "peaked" in the United States and is now largely imported. Coal is relatively abundant, but not over the long haul. Nuclear power, likewise, is based on radioactive materials which are not overly abundant.

Alternative energy, and alternative transportation fueling options, are good for the long term, but there is nothing to replace oil at the levels needed at this point in time.

Q: If this is such a big deal, then why isn't it all over the news?

A: Good question. One assumes that it is because there are vested interests that don't want it in the news. However, from small localrags to National Geographic it is being discussed. Willamette Week had an article - ODOT's Peak at the Future - which was a short expose of the recent Oregon's Mileage Fee Program and Road User Fee Pilot Program - Report to the 73rd Oregon Legislative Session by the Oregon Department of Transportation. In that report, they also discuss the implications of peak oil on Oregon's road tax revenues. The August 2005 edition on National Geographic has an article by Michael Parfit titled "Future Power - Where Will the World Get It's Next Energy Fix?", which also discusses the viability of replacing oil with some other energy source (or sources).

Q: So when is this going to happen?

A: That is a difficult question to answer. Many are now arguing that we may already have passed the "peak." Some feel that peak will be reached in 2005-2006. Others, that the peak will happen somewhere between 2008 and 2030. One might wonder at all the variation in dates. This is based on several issues. The first is accurate information about existing reserves. It has come to light in the last couple of years that everyone from oil producing nations to oil companies have overestimated their reserves. They have done this because it is profitable to do so. More oil in the ground means more collateral and longer production capacity. Another factor is calculating increasing demand. One can only estimate demand and the usual "estimate" is 2% growth per year. However, Asian nations are in a rapid development cycle (particularly China and India) and the U.S. consumption is increasing at above 2%. Since we are likely to "overshoot" (continue increased usage past the peak without knowing we have done so) it is likely that we will be at some point beyond the peak before we know it has happened.

Q: What is the best thing we can do to face the immediate crisis?

A: CONSERVE. The most immediate and effective thing that can be done to delay an "oil crash" is to conserve.

There is no replacement energy source, or combination of sources that can replace oil - at this time. There are no new fields, or proposed fields (including the Alaskan National Wildlife Refuge), that will add significantly to the amount of cheap oil available. Further, petroleum geologists think the likelihood of a discovery of major oil reserves is very unlikely. What we currently have is pretty much what we have to work with, and that supply is in high demand with a global demand of roughly 83 million barrels a day - for 2005. Demand is expected to increase at rate of at least 2% a year. There is no sign of decline. The faster the demand increases, the faster the oil will run out.