The Age of Oil

The Age of Oil will likely turn out to be one of the most important historical periods in human history. The end of this Age may also be as important to the future of our species as the end of the Age of Dinosaurs was to the future of mammals. The entire basis of our modern civilization is built on oil and other fossil fuels. It has enabled the industrial revolution, a massive increase in population, and our current standard of living in the West, as well as our extravagant levels of consumption. One way or another, the passing of this Age will change us irrevocably.

The idea of peak oil is a relatively simple one. As with all non-renewable resources, there is only a finite amount of oil in the ground. There must therefore come a point when we have reached a maximum in the rate of extraction of this resource. This is not about running out, but rather reaching a limit on how much we can produce in a given year. This is not controversial, it logically follows for any finite resource. The debate around the issue of peak oil usually involves questions about when the peak will come, and what the consequences of this will be.

There is a growing consensus among geologists that the world has either reached peak oil, or is rapidly approaching this point. There are several reasons for this. First, the rate of discovery of new oil deposits peaked in 1964. Since then we have continued to discover new deposits, but at a slower and slower rate. Since 1981, we have been consuming oil faster than we have been finding it. Most of the large and easy to find oil fields have already been discovered.

Another reason is that many of the large old fields are becoming depleted, and are long past peak production. They are still producing oil, but it is becoming much more difficult and expensive to extract this oil, and the rate at which it can be extracted is decreasing. There is a similar situation in the search for new fields. There may be more oil under the ocean floor, or in the arctic, but conditions in these areas make oil exploration and production much more difficult, expensive, and energy-intensive. This limits our rate of discovery, as well as the rate at which we can exploit these resources if they are found.

A UK study has calculated that in order to maintain current production, we would need to discover a new Saudi Arabia every 3 years, just to replace the loss from declines in existing fields. This may explain why oil production has been roughly stagnant since 2005, with a small drop this year. This is the main reason why prices rose to record levels leading up to 2008, and only dropped when the economy contracted, after the bursting of the housing bubble and the banking crisis. The recession has caused demand to drop, allowing oil prices to decline. Many geologists now believe we may never exceed production rates from 2008, or if we do, this will reach a peak within 10 years.

Over the past hundred years, our use of oil has risen from almost nothing to a current level of roughly 75 million barrels a day. Continuously over this period, oil production has increased every year, with the exception of brief disruptions caused by wars or embargoes. During this period, we have industrialized, electrified, and paved the world, and especially Western countries, and our population has quadrupled in size. This has allowed for our current access to electricity and our transportation system, as well as our standard of living and ability to consume a large quantity of material goods.

The good news is that peak oil does not mean we will run out of oil any time soon. What it means is that after the peak, we will have a bit less oil available each year than the year before. However, all the changes described above were made possible by a continually growing supply of oil. Indeed, our economy itself has been largely driven by oil over the past hundred years. This is what has made it possible for us to enjoy continued growth, year after year, with the exception of occasional recessions and the Great Depression. One hundred years is long enough for several generations to live and die, and has led us to believe that economic growth is a natural, or even inevitable, phenomenon.

This is what makes peak oil, and the Age of Oil itself, so historically important. Over the course of human history, the Age of Oil is very short. We have had a hundred years of growing access to oil, and may have a hundred more of diminishing supplies, and then oil will be gone, for all practical purposes. Two hundred years is not that long a period when measured over the scale of human history. Yet, like all other generations, we consider our current circumstances to be normal and natural, and cannot imagine that they could change.

With oil production at a plateau, economic growth will no longer be possible. At production declines, the economic will have to contract. We have access to other sources of energy, such as wind, solar and nuclear, but none of these are as dense or cheap as oil. They can never replace the energy provided by oil, nor allow for continued economic growth, but they could provide enough energy to meet basic needs. Of course, other factors such as damage to the environment and global warming will make the situation that much worse.

Oil and other fossil fuels also made the Green Revolution possible, which dramatically increased food production, through the use of mechanized farming methods and fertilizer. Without access to oil, it will be much more difficult to grow enough food to feed the world, although a transition to sustainable farming methods could mitigate this to some degree. Still, without oil, it will be much more difficult for the planet to support a growing population, and food production will become much more labour-intensive.

The Age of Oil has allowed us to make dramatic advances, but it has also badly damaged our environment, and committed us to a level of global warming that will have many adverse affects on the world and on our lives. As this Age wanes, we will see many dramatic changes. Our economic system, the structure of our society, and our culture will all change in ways that are difficult to predict. Only one thing is clear, nothing will ever be the same again.