In 500 words: Peak Oil

I found the concept of “Peak Oil” confusing until my brother explained it to me, and since its implications are so profound I thought others might benefit from a quick overview.

What is Peak Oil?

Peak oil has nothing to do with the amount of oil left in the ground, and everything to do with how quickly we can pump it out.

Imagine that the world gets all its oil from one giant tap. As global demand grows, we simply turn the tap a bit more and the flow increases.  Problem solved; we need more, we turn more.  But now imagine that one day we try to turn the tap and it won’t go any further.  No matter what we do, the flow won’t increase.  What happens now?

Have we run out of oil? Of course not, the stuff is positively gushing out!  But we need it to gush faster, and it won’t.  That’s peak oil: when the tap won’t turn any more, we are suddenly unable to meet any new growth in demand.

What are the implications?

We have to get used to the fact that our daily consumption of oil cannot continue to grow indefinitely.  That doesn’t sound too bad, until we realise that our global economy is completely dependent on moving people and things around, and our global transport system only works by burning oil.  To grow the economy we need to move more stuff around more quickly, but when the tap will no longer turn that’s not an option.

So are we saying that peak oil means an end to economic growth?  In a word, yes.  Some might argue that in an ideal world that’s a good thing.  But we don’t live in an ideal world; we live in one where people lose jobs and default on their mortgages and go hungry when economic growth stops even temporarily.  The implications of a complete halt are almost impossible to imagine.

Which is why we need to get our act together and wean ourselves off oil as soon as possible.  It doesn’t matter whether you ‘believe’ in climate change, or whether oil companies tell us there is still enough black stuff in the ground to meet current demand for a thousand years.  Current demand is irrelevant because our society depends upon economic growth which in turn depends upon oil demand increasing.  The only thing that matters is that there are physical limits to how quickly we can pump oil out of the ground.  When the tap will no longer turn we are in for a shock which will make the 2009 recession seem like a party.

Many experts say that we have hit peak oil already, that the tap stopped turning a few years ago, and that the recent global economic slowdown is anything but temporary.  Some say we’ve still got a few years.  I won’t attempt to argue the case either way, because it seems to me that doing so would be like standing on the deck of the Titanic and debating whether the iceberg is one hundred feet away or two hundred.