Oil reaches peak after overestimation

Oil reaches peak after overestimation

In this week’s issue of the scientific journal Nature, an article has been published spelling out serious consequences for the future shape of human institutions. Authors James Murray and David King allege that the world has reached a state of “peak oil,” or the point at which the efficient extraction of oil has reached its limit – suggesting that while demand annually increases an insufficient energy supply will stunt the growth of the world’s largest economies.

Peak oil is a key character in a host of conspiracy theories, but by now has achieved a degree of legitimacy. The theory was postulated in the 1950s when economists began to consider the consequences of employing a highly finite resource as the foundation of the country’s new transportation infrastructure. Observing that oil fields typically have a life cycle, production growing until a point and declining thereafter, economists inferred that a similar condition might be reached by the world’s reserves as a whole should demand continue to increase.
Constructing the modern world on oil now seems to have been a bad idea or at least a fleeting one, as we stand here sixty-odd years later staring at the possibility – that the most advanced sectors of modern civilization will begin a permanent decline – in the face. And it will happen sooner than we think, as the Wiki-leaked State Department cables of last year revealed a radical overestimation of Saudi oil reserves, perhaps by as much as 40 percent.

Moreover the Organization of Petroleum Exporting Countries (known as OPEC) has long been at odds with the agenda of Western states in South America, the Middle East, and Africa, often choosing to restrict production both to keep prices high and as a political and economic weapon. The real reason, however, behind the exaggeration of Saudi reserves is likely internal – to conceal that the corrupt monarchy has literally mined the foundations of its own power which, at current rates of production, is quickly diminishing.

The principal response to the peak oil theory has been that a great deal of oil has been found in recent years, inflating the estimation of the total global supply, but it should be noted that although new oil fields have been discovered many of these involve considerably more effort to extract than traditional sources and are therefore not as damning to the peak oil theory as they might appear. New fields and new harvesting techniques will be incorporated into overall petroleum production but will only offset declining production in existing fields, authors Murray and King maintain. In short, by the time new fields are brought online they will just compensate for lost production, providing little to no net gain.

As with any upset to such a pillar of civilization, the possible consequences of our condition are incalculable and could be severe. Some contend that geo-political struggles will assume the character of energy wars, with states attempting to erect zones of influence over energy producing centers – already a fixture of American foreign policy in the Middle East. Economic stagnation, theoretically, would become the rule as developing economies lack the resources to grow and developed economies are unable to maintain their current level of activity.

If true, the proverbial clock is ticking on the contemporary middle-class lifestyle in the United States, built on traversing great distances from suburbs to business centers in personal automobiles as well as by xenophobia and racism. We forget sometimes that oil has been the fuel of white flight, or the abandonment of city centers by whites unwilling to live in heterogeneous surroundings. The future of transportation will more closely resemble the transit model in the European Union, and the haughty, tacit, and widely-held notion that public transportation is for the urban poor will be have to be relegated to the dustbin of history.