Plan War and the Hubbert Oil Curve

Using Hubbert’s method, it’s also possible to predict when global oil production will peak. The scary thing is, the peak is likely not that far off. No one is absolutely sure, because it is impossible to determine exactly how much oil is yet to be discovered. Some countries have political motives for underreporting or overreporting their reserves. But the best guesses are that we’re only a few years away from the global oil production peak. 

What will happen when we pass the peak of the Hubbert oil curve?  

Once we hit the peak, every year thereafter we will be unable to find and pump more oil. If the demand continues at the present rate or grows, the supply will be inadequate and that will have tremendous economic implications for the whole world. Either we have to find other energy sources to make up for what we lose from petroleum as it begins to run out or else we will go into permanent economic decline with vast implications for the economy, food production, transportation, and so on. 

Can we find alternative energy sources in time to replace oil?  

That’s a surprisingly tough question because there are very few scientists out there who are doing good comparative studies of the various energy alternatives. We have companies that are invested in particular energy alternatives, that are doing their own studies, but they understandably have a certain bias. What we need are objective studies comparing the alternatives on the basis of a series of clear, transparent criteria, like: Are they renewable? What’s their environmental cost? What’s their energy profit ratio? 

You see, it takes energy to get energy. It takes energy to drill an oil well. It takes energy to manufacture a photovoltaic solar panel. But the energy profit ratio is different for each of the alternatives and that figure needs to be objectively determined. Suppose we were to invest $100 billion dollars over the next ten years in making a transition to a hydrogen economy and then discovered that, in fact, hydrogen has a lot of hidden costs. Well, we can’t afford to lose ten years and $100 billion dollars going down the wrong road at this point. 

Are there alternatives that can replace oil? Well, the answer is: We don’t know for sure, but there’s little cause for complacent assurance right now. The reason I say that is that most of the renewable alternatives like nuclear, wind, and solar have various drawbacks. 

Nuclear power is expensive and dangerous and the problem of radioactive waste storage has not been solved. With wind, you can only place turbines in certain places. (Wind is probably the best of the alternatives, in my view.) With solar, the sun only shines part of the day and some regions are often cloudy. Photovoltaics, right now, are still quite expensive and not very many people are willing to make the investment. 

Hydrogen is not even an energy source; it’s just an energy storage medium. Yes, we could run cars on hydrogen, but where are we going to get enough hydrogen to run millions of autos? Either it has to be made from fossil fuels—which are the source of nearly all commercially available hydrogen today—or from water using electrolysis. But making hydrogen from water takes more energy in the form of electricity than the hydrogen will give you later on. 

Again: Where will we get all of this extra electricity? We’re not going to get it from natural gas because in North America we are starting to run out of natural gas. Are we going to get it from nuclear, solar, or wind? If we choose any of these alternatives, it means dramatically increasing our energy budget for electricity production at a time when we’re going to be suffering from the economic effects of petroleum and natural gas depletion. We’re not prepared to make a huge investment in new electrical generating capacity now and we will be even less prepared then. 

How does human carrying capacity fit into the context of the Hubert oil curve?  

We have artificially increased the carrying capacity for human beings on planet earth. Carrying capacity is how many individuals of a given species can be supported by the environment. That number tends to vary, depending on weather, rainfall, etc. Carrying capacity changes for just about every species from year to year. Human beings have found a way to artificially—and probably only temporarily—enlarge our carrying capacity with industrial agriculture, expanded transportation networks, technology, better sanitation, better medical care, etc. 

The problem is that this expanded carrying capacity is dependent on a non-renewable resource, namely, fossil fuels. So this is not permanent carrying capacity that we’ve created; this is what William Catton—who wrote the book Overshoot, in the 1980s—called phantom carrying capacity. It’s carrying capacity that may vanish as fossil fuels disappear from our lives. 

What’s the size of that phantom carrying capacity? Nobody knows for sure, but if we look back to how many people planet Earth supported before we started using oil, we find it was fewer than two billion. We now have over six billion. So, even granting that we’ve discovered ways of keeping people alive through better sanitation and so on, ways that might be sustainable using relatively little energy, the fact is that we’ve probably overshot our carrying capacity and we may need to find ways to reduce the human load on the environment if we’re all going to survive. 

Can you talk about the different options for our future as we pass the peak of the Hubbert curve?  

Plan A, what I call Plan War, is what we’re pursuing right now. Whoever has the most guns and bombs will compete with everyone else for the remaining resources and use them till they’re gone. 

Of course, the situation is a bit more complicated than that. Obviously, the U.S. didn’t conquer Iraq so that we could literally build a pipeline directly from Basra to Houston. I think the U.S. has economic and geopolitical reasons for wanting to control the price of global oil. Iraq is a pivotal country in terms of the future of oil production. It has the second largest reserves and it’s between Saudi Arabia and Iran. 

Saudi Arabia has the largest reserves, but it’s politically unstable and it’s unclear what would happen in Saudi Arabia if the government there were to fall, whether supplies would be cut off, at least temporarily. Having a large military presence next door to Saudi Arabia must make a lot of sense in the minds of the geostrategists. 

So that’s Plan A and it doesn’t look like it’s going to have a very happy ending because one can foresee more and more armed conflicts between heavily militarized consuming nations and poorer resource-rich producer nations. Eventually, there will be conflicts between competing consuming nations. China, for example, wants to industrialize. China is using more and more oil every year. But if global oil production peaks, that means the Chinese will be in direct competition for every barrel of oil with the already developed countries like the U.S. So how are we going to work that out? Using nuclear bombs? I hope not, but right now I don’t see any other thinking going on. 

Plan B, what I call Plan Powerdown, would entail some kind of national and global process for deliberately reducing our dependence on fossil fuels. It would require changing our economy so it’s no longer a growth economy. It would require dealing with population issues, so that we’re putting less of a load on existing resources. It would require dealing with the problem of economic inequality within and among nations because the more economic inequality we have, the higher the likelihood of conflict. 

Powerdown would require changing our whole way of life, going from a consuming society to an efficient society, going from a growth society to a society that’s steady-state and even reducing its scale year after year. That’s politically very difficult. The last person to attempt something like that, in this country anyway, was Jimmy Carter—and look what happened to him when a political opponent came along promising a return to times of plenty. Still, if in the U.S., people realized what’s at stake and what the long-term consequences of their path will be, I think many, if not most, would be interested in following Plan B. 

Plan C, what I call Plan Snooze, entails doing little or nothing while the problem is temporarily denied or wished away.  There are all sorts of people assuring us that the market can take care of any resource shortages. Or that all of the intelligent people working on the problem will surely come up with an easy solution. Or that we will see an effortless transition to a hydrogen economy. 

If you watch television and read the newspapers, you will see that this is a popular message. It’s what the corporations are telling us and it’s what we all want to hear. Unfortunately, the problem with Plan C, as far as I can tell, is it’s probably wishful thinking. Then the only option we will likely have left is military confrontation over the remaining resources. 

The Hubbert oil peak is predicted to occur in five to ten years. You’ve written that natural gas will go through the same peak in supply even sooner. 

In North America, it’s happening right now. We’re in the middle of a natural gas crisis, but you have to read the business pages of the newspaper to find the evidence for that. Alan Greenspan has gone before Congress twice now to say that we have a big problem and that he doesn’t have the solution to it. Last summer, Energy Secretary Spencer Abraham convened a blue ribbon panel in Washington to address this. Abraham essentially, said, “Look folks, I need some short-term solutions.” The rest of the day, people from industry offered long-term partial solutions, but nothing that could make much difference in the next couple of years. 

Currently, the market is dealing with the gas shortage through what’s called “demand destruction.” That means that prices rise sufficiently—and natural gas prices are about twice what they were a year and a half ago—to drive whole industries out of the market so that the folks can heat their houses in the winter. Currently, 20 percent of the fertilizer industry in the U.S.—which uses natural gas to make ammonia-based fertilizers—is gone. Another 30 percent is closed down temporarily until gas prices go down, which they probably won’t. So around half the fertilizer industry is gone. The chemical industries and a lot of manufacturers are teetering on the brink right now because they can’t afford natural gas at current prices.  

So what’s going to happen? All those industries are going to go overseas. Fertilizer will be made for us in the Middle East, Trinidad, and other places that have natural gas and then it will be shipped here. But even so, the natural gas situation is going to get worse because we’re generating a lot of our electricity with gas-fired power plants and it’s entirely possible that we may start to experience brown-outs or rolling blackouts.  

Next summer is likely to be a lot worse because, as I said, there’s no short-term solution to this. The U.S. has already peaked in natural gas production and Canada—we’ve been importing 16 percent of our natural gas from Canada—has peaked this year too. They’re forecasting that their natural gas production will be down 3 percent from last year. 

So we’re looking at a big problem and it’s not going to be solved by importing liquefied natural gas in tankers. That will help, but it’s expensive and years are required to build all the new tankers, the new special off-loading terminals, etc. The natural gas industry’s solution is to get more permits from the government to drill in Colorado, offshore, etc., but it’s unlikely that enough natural gas will be found in those places to make that much of a difference. In Colorado, there’s coal-bed methane, which causes huge environmental problems to extract. Offshore of California and Florida, the estimates of what’s actually there are not all that encouraging.

David Ross is a journalist and grass- roots activist.