Serendipity

I’ve been reading up a lot this week about peak oil. I’ve been dipping into my copy of “The Post-Carbon Reader“, which really ought to be required reading for everyone involved in discussions about climate change. It’s a collection of short essays by a large number of forward thinkers, put together by the Post-Carbon Institute. They take as their premise the evidence that we’re now reaching the limits to growth on a number of major planetary indicators (climate change, peak oil, biodiversity loss, agricultural sustainability, the nitrogen cascade, etc).

The existence of these planetary limits was first popularized by the Club of Rome, in the Limits to Growth study. Although many people criticized the original Limits to Growth study, most such criticisms focussed on the details. The central message still stands: long term sustained growth, based on ever growing exploitation of the resources of a finite planet, is simply not possible. So far we’ve manage to avoid such limits through the principle of substitutability: human inventiveness comes up with new technologies that allow us to keep on growing (e.g. in terms of population and in terms of economic activity). For example, the original Limits to Growth study worried extensively about imminent food crises. But in the event these were avoided through the green revolution, whereby farming yields were dramatically increased through new agricultural practices. But these practices are incredibly energy-intensive, and are only possible because of cheap fossil fuels. The challenge now is that now we’re hitting limits in a whole set of areas at once, but most notably in the supplies of cheap energy. The principle of substitutability doesn’t work if all the systems that might drive it are also under stress.

So energy is central to all these issues. The introduction to the Post Carbon Reader points out that the abundance of cheap energy that humanity has enjoyed for the last 150 years is an anomaly in human history, and we’ve become so used to it that it’s hard to recognize how anomalous it it. Peak Oil is the first sign that the anomaly might be ending, and that our access to cheap energy is effectively over.

Last time I wrote about peak oil, I did some back of the envelope calculations to figure out whether peak oil might save us from the climate crisis. My numbers showed that about half of the remaining fossil fuel reserves need to stay buried in the ground if we are to stand a chance of staying below the +2ºC of warming advocated by most commentators. The message was that peak oil won’t save us from serious climate disruption, largely because there are enough coal deposits that a switch to coal (using coal to replace natural gas and oil) will spell disaster. But there’s a worse problem. Once we hit peak oil (which might have already happened), production starts to decline while demand still grows. The result is that oil prices shoot up, making it ever more profitable to drill for every last drop. So, not only will peak oil not save us from climate change, it will exacerbate the problem by ensuring greater profits for those who extract those last remaining drops. The same argument applies to peak coal, which is probably only a few decades away. What would induce people to leave such valuable commodities unexploited?

There is, of course, growing evidence that we’ve already hit peak oil. The spike in oil prices in the summer of 2008 were a taste of what’s to come, and we’ve seen evidence in the last month that oil prices are on their way back up to those levels. The reasons for this are gradually becoming clear: the oil industry has apparently been telling pleasant lies to governments for the last few decades, greatly exaggerating their estimates of remaining oil reserves. The extent of this exaggeration was recently revealed by wikileaks. And the essay by David Hughes in the Post-Carbon Reader explains the context, by exploring how unrealistic US government projections have been.

Much has been made in discussions about climate denialism about the oil industries funding concerted attempts to discredit climate science. But within the oil companies themselves, there does seem to be a recognition that the party is over. Take, for example, this report produced by Shell earlier this month: Shell Energy Scenarios to 2050. The Shell report takes the climate science very seriously, and quotes from the Rockström et. al. paper on on planetary boundaries, along with the the work by Allen et. al. and Meinhausen et. al. on limits to cumulative emissions. There’s no mention from the Shell scenarios team of any doubt about climate change and peak oil – in fact they clearly state that “the longer the delay in climate policy action, the more likely shocks become” (p17).

What’s interesting about this report from Shell is the two different alternative scenarios they explore, which they call Blueprint and Scramble. The blueprint scenario represents serious climate policies that switch to clean energies more rapidly than any current political discussions would achieve. The alternative, Scramble, makes depressing reading. It posits a world in which nations focus more on their own energy security than on the long-term goals of reducing demand and switching to renewables. It’s a scramble for the dwindling fossil fuel supplies that puts supplier nations firmly in the driving seat (at which point we can forget any worries about human rights and equity), and in which we’ll see increasing international conflict:

“Scramble in the west could also result in increasing anti-globalisation, more protectionism and political radicalism. […] As global order fragments, governments in developed countries will be pressured to protect the living standards of their populations”.

If oil companies understand this, why don’t politicians?