This is one of a crop of recent books looking at what will happen when the world wakes up to the fact that the annual production of oil cannot go on increasing forever.
Oil, being liquid and easily transportable, really is a wonderful fuel. It does not need an electricity grid for its distribution. When used in private motor cars, oil responds to a deep human need for instant freedom of movement, something for which those who can afford it are willing to pay a high price.
President Bush said in his State of the Union address this year that America was addicted to oil. He could have added that the middle-class lifestyle to which much of the rest of the world aspires is also based on high oil consumption. Low-density housing developments in Ireland assume that oil prices will not rise to $100 a barrel because these developments are incompatible with anything but the private car-based lifestyle. The burgeoning middle classes of India and China will also want to have cars, so the demand for oil will not tail off just because supply is no longer increasing.
The problem is one of timing. Will we have substitutes for oil in place before the crunch comes, or will the transition be sudden and nasty?
The answer to that question depends on when the peak of oil production is reached. If, as Jeremy Leggett believes, the peak was reached last year, then the sudden and nasty scenario is almost upon us, because substitutes like hydrogen fuel and biodiesel will take 10 years or more to roll out. The car fleet is normally replaced over a 10-year cycle so a sudden switch to new fuels would be exceptionally disruptive and costly. No infrastructure of stations exists to distribute the new fuels, and people will not buy a car for which convenient fuel is not available everywhere they might want to use it.
Others, like Cambridge Energy Research Associates (CERA), believe oil production will increase substantially up to 2015 and that peak production will not be reached until around 2030 or later. They expect Saudi Arabia to be able to increase its daily production by a further 20% by 2015, and see additional supplies coming from Libya, West Africa, Angola, the Caspian Sea, Angola and Brazil.
Matthew Simmons, the oil geologist who wrote ‘Twilight in the Desert’, believes the direct opposite. He claims Saudi production will peak very soon. He says Saudi oil reserve figures are exaggerated and unreliable. They are not broken down field by field and have not been independently audited. As a ‘swing producer’, sharply increasing or decreasing production to counter shortages or gluts, Saudi Arabia has reduced the long-term potential of its oil fields.
Like Simmons, Jeremy Leggett is an oil geologist who has left the oil business. He runs a consultancy which is promoting alternatives to oil, like solar power and hydrogen. He says no really big oil field has been found in the last 25 years and most areas with suitable geology are already explored.
He says that some alternatives to oil have big downsides. Hydrogen fuel requires natural gas for its production. Coal burning produces even more global warming than oil. This could be countered by carbon sequestration which involves burying the carbon in caverns rather than burning it off into the air. But here are a limited number of caverns and they could leak.
Leggett’s preferred solution is a decentralized system of energy production based on solar panels which would heat or cool homes and produce surplus electrical energy that could be fed into a localized grid. It is not clear how this would be enough to power the world’s motor cars.
Whether oil production peaked in 2005, or will peak in 2030, nobody denies that it will eventually run down. Ireland’s decision to meet its 1990s housing shortage in a dispersed way has made itself dependent on the unlikely scenario of a seamless transition from oil to an equally convenient substitute.
That substitute is simply not yet available. One can only hope that the oil peak will be in 2030, and was not in 2005!
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