The end of cheap oil

April 12, 1999|By Richard B. Anderson

THERE'S NO shortage today of outrage over gasoline prices; if we could fuel cars with anger, prices would go right down again. Nor is there a shortage of irony for anybody with an inkling of what the world's oil situation is really like.

Today's complaints are going to seem trivial when prices begin to go up more or less without end, and that's going to happen quite soon, probably within a decade.

The end of cheap oil is in sight -- a truly epochal event that is going to change everything. Given the state of our current understanding, it seems unlikely that we'll handle it well.

Part of our problem with understanding has to do with previous hand-wringing about petroleum prices and supplies.

Those who were around for the oil price shock of the early 1970s will remember rash predictions that the world would soon run out of oil. Because the OPEC reductions in supply of petroleum were purely man-made and transitory, those predictions turned out to be false, an outcome that led some to conclude that all predictions were to be ignored.

There was one prediction, however, that had already proved true before the OPEC embargo was ever imposed.

In 1956, geologist M. King Hubbert proposed that for any finite resource such as oil, production would rise along a bell-shaped curve that would peak when approximately half the resource was gone.

He foretold that oil production in the United States would increase year-by-year until 1969, give or take a year, and then decline ever afterward. Hubbert's prediction was astonishingly accurate.

The amount of oil produced in America peaked in 1970, and has gone down ever since, notwithstanding the discoveries in Alaska and elsewhere.

Using techniques similar to Hubbert's, geologists Colin Campbell and Jean Laherrere predicted in the March 1998 issue of Scientific American that world oil production will reach its highest point some time before 2010. (Substitute fuels and technological innovations might delay the peak by a decade or so, if developed and deployed appropriately.)

The peaking of production does not mean that the world will be out of oil; far from it. More than half of the resource will still be left. But the total amount taken from the Earth each year will begin to decline, while demand will continue to increase.

The result will be an inexorable rise in the price of petroleum. Where the price of oil and gasoline has been steadily going down, adjusted for inflation (even with the recent increases, it's still historically inexpensive), suddenly the price will go up and up and up.

If the end of cheap oil is a decade or two away, the implications for Americans are hard to understate.

As the price of oil rises, there will be radical stresses and dislocations in the United States economy and society. It's currently fashionable to believe that market forces and technology will solve any conceivable problem with the supply of petroleum.

Promising technology

There are some promising developments along those lines, including a new kind of solar cell based on organic materials. But those technologies and market forces had better get a move on, because this monumental change is very near.

Yet, there are few signs of systematic thought or action on this problem or even explicit notice of it.

The current outrage over gas prices is not very relevant in this context, except as a symptom of denial. The reality is that we've built our civilization around something we knew wasn't going to last. That's a challenging position to be in, and some degree of psychological wavering is to be expected.

Yet our responsibility to our children demands that we face the facts as they are and start to build a more viable future. Let's stop whining and start planning.

Richard B. Anderson teaches a course on the human future at the University of California, Santa Barbara. This article first appeared in the Los Angeles Times.

Pub Date: 4/12/99

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