Here is a very good article by James Howard Kunstler which starts with the assumption that the “peak oil” theory is true, and makes some conservative yet horrifying predictions about how the declining availability of cheap energy will play out.
First, what is the “peak oil” theory?
According to the U.S. Department of Energy, world oil production peaked in December 2005 at just over 85 million barrels a day. Since then, it has trended absolutely flat at around 84 million. Yet world oil consumption rose consistently from 77 million barrels a day in 2001 to above 85 million so far this year. A clear picture emerges: demand now exceeds world supply. Or, put another way, oil production has not increased despite the ardent wish that it would by all involved, and despite the overwhelming incentive of prices having nearly quadrupled since 2001.
Okay, so oil will become increasingly scarce and increasingly expensive. What about replacing it with another form of energy?
The popular idea, expressed incessantly in the news media, is that if you run out of energy, you just go out and find some “new technology” to keep things running. We’ll learn that this doesn’t comport with reality. For example, commercial airplanes are either going to run on cheap liquid hydrocarbon fuels or we’re not going to have commercial aviation as we have known it. No other energy source is concentrated enough by weight, affordable enough by volume, and abundant enough in supply to do the necessary work to overcome gravity in a loaded airplane, repeated thousands of times each day by airlines around the world. No other way of delivering that energy source besides refined liquid hydrocarbons will allow that commercial system to operate at the scale we are accustomed to. The only reason this system exists is that until now such fuels have been cheap and abundant. We are not going to replace the existing worldwide fleet of airplanes either, and besides, there is no other type of airplane we have yet devised that can work differently.
Okay, so no replacement for oil is likely. What will scarce, expensive oil mean to the American way of life?
If you really want to understand the U.S. public’s penchant for wishful thinking, consider this: We invested most of our late twentieth-century wealth in a living arrangement with no future. American suburbia represents the greatest misallocation of resources in the history of the world. The far-flung housing subdivisions, commercial highway strips, big-box stores, and all the other furnishings and accessories of extreme car dependence will function poorly, if at all, in an oil-scarce future. Period. This dilemma now entails a powerful psychology of previous investment, which is prompting us to defend our misinvestments desperately, or, at least, preventing us from letting go of our assumptions about their future value. Compounding the disaster is the unfortunate fact that the manic construction of ever more futureless suburbs (a.k.a. the “housing bubble”) has insidiously replaced manufacturing as the basis of our economy.
Surprisingly, Kunstler is not prophesying doom, just (!) an impending crisis where we will have to face up to the impossibility of continuing on our current path, and, as the title of his article says, get on with “making other arrangements” for the basic activities of everyday life. The article ends with some quite specific observations of what sort of changes will have to be made, and why.
Kunstler’s article appeared early this year. I stumbled across it because I wanted to know more about Kunstler, who just contributed an article (scroll down) to a e-newsletter I receive, The Daily Reckoning. In it he explained why we should take no comfort in the fact that the price of oil has been more or less stable for awhile (until recently, anyway).
But beyond this debate, in the background, another ominous trend canaccount for the stalling of oil prices in 2006 – totally unrecognized by the public and ignored by the news media: Prices on the oil futures market leveled off because the Third World has effectively dropped out of bidding for it – and using it. They cannot afford it at $60 a barrel.
The Third World has entered an era of energy destitution and it is manifesting itself in symptoms like local resource wars, genocides, falling life expectancies, and in many places a near-total unraveling ofthe sociopolitical order. American mall-walkers and theme park visitors are oblivious to this tragic process, but it is perhaps the major reason why we are not now suffering from $100 a barrel (or greater) oil prices (with the consequent unraveling of our sociopolitical and economic order).
That impressed me enough to look up his website (not linked due to profane language), where I found a pointer to the article discussed here, and found out that he has also written a book, The Long Emergency, subtitled “Surviving the converging catastrophes of the twenty-first century.” I’ve ordered a copy.