A fit of peak

With crude oil prices pushing up towards $100 per barrel, it’s a good time to release a documentary that argues we’re in imminent danger from dwindling oil supply. According to A Crude Awakening, demand for oil is accelerating while supply has peaked and will shortly go into rapid decline. The result will be social disruption on a scale unseen since the Great Depression. Sounds scary – but in reality these arguments seem as crude as the black stuff gushing from the ground.

The film, made by Swiss journalist Basil Gelpke and Irish producer Ray McCormack, is a diatribe against the evils of an oil-based economy. Opening with a narration befitting a horror movie, we are told that oil is the ‘devil’s excrement’ and the ‘blood of the earth’. Through interviews with a number of experts, activists and politicians, Gelpke and McCormack argue that developed economies, most notably the USA, are utterly dependent on oil. Farming, transportation, plastics – in fact, the production of pretty much everything – depends on a supply of oil. For example, every calorie of food energy we produce requires 10 calories of energy inputs – mostly oil. The vast majority of travel, too, is powered by oil pumped from the ground.

Supply and demand

The problem, according to the film, is that production may have peaked or is just about to do so. The world is currently using roughly 85million barrels of oil per day (1). (A barrel of oil is 42 US gallons or 159 litres.) Demand is booming due to rapid economic growth in China and India and steadily increasing demand in the developed world. The filmmakers argue that there have been no new big oilfield discoveries since the late 1960s when huge quantities of oil were discovered in the North Sea and Alaska.

As it happens, the film’s opening in the UK coincided with an announcement by the Brazilian government of a new offshore field, Tupi Sul, that could ultimately provide eight billion barrels of oil. But this will not come fully on-stream for a few years and will only provide a small portion of the world’s growing oil needs each year (2). In fact, the total oil from this field would only supply current levels of world consumption for about three months. Worse, according to the film, the declared remaining reserves of oil in many members of the Organisation of Petroleum Exporting Countries (OPEC) may be greatly overstated. In the past, OPEC members have had an interest in exaggerating their remaining stocks since OPEC production quotas have been based on declared reserves.

The really big fields with long potential reserves are in the Middle East – hardly a stable region. This question of stability informs comments in the film by Stanford politics professor Terry Lynn Karl, who provides a fairly outrageous example of the war-for-oil thesis. Karl believes that the two Gulf Wars were driven by a desire to seize and control oil reserves – which is slightly bizarre, given that Iraq’s oil could more easily and cheaply have been controlled by propping up Saddam rather than removing him. But this war-for-oil thesis apparently knows no bounds, with Karl glibly suggesting that everything from the civil war in Sudan to the two World Wars can be put down ‘in part’ to a scramble for oil.

Solving the problem

The film is already showing its age, however. Much of the discussion in the film is about how there is more oil under the ground, but that it is not economically viable to dig it up. As one US oil worker notes, in incredulous tones, the oil price would have to be $50 a barrel for it to make sense. But since prices have now shot up to nearer $100 a barrel, a range of possibilities opens up, even if current high nominal prices are to some extent a product of the weak dollar.

Suddenly, getting that oil out of the ground is good business. Other opportunities arise: expensive exploration in relatively uncharted territories starts to make sense because the gamble could have such a huge pay-off; exploration methods themselves can improve; finding ways to recover a greater percentage of the oil in any particular field would be a boon; producing liquid fuels from the world’s abundant stocks of coal – pointless when oil itself is cheap – is now practical and economic. For all the severe limitations of the free market, it is quite clear that a rising oil price provides strong incentives to explore both oil-based and non-oil avenues for future energy production.

But the filmmakers seem uninterested in the possibility that declining oil stocks are a problem that could be solved. ‘The demand is so huge there is nothing we can imagine to replace oil in those quantities’, suggests David L Goodstein, professor of physics at the California Institute of Technology. Instead, A Crude Awakening provides a litany of disastrous consequences that must inevitably result from peak oil. Particularly enthusiastic doom-sayers include the rather excitable Colin Campbell, a former oil geologist and founder of the Association for the Study of Peak Oil (ASPO), and Matthew Savinar, whose website, Life After the Oil Crash, greets us with the cheery thought that: ‘Civilization as we know it is coming to an end soon.’ The film draws to a close with footage of an Amish man driving his pony and trap, as if to say that this is the future of transport.

Against the pessimism of the peak oil theorists is the reality that we do not ‘worship’ oil nor are we addicted to it. Oil is simply an extremely cheap and very effective solution to a number of technical problems. If oil production does decline – and it would be wrong to simply assume that as yet – we’ll have to find new solutions instead. In the short term, no single alternative fuel source will take the place of oil. But unless oil production suddenly collapses, which is unlikely, replacements only need to substitute for part of what oil would otherwise supply in the short-term. Bio-fuels, clean coal, nuclear power, hydrogen, solar and wind power will all, to some extent, have a part to play – along with technologies that have not yet been developed.

Greater efficiency will surely also kick in. When oil is cheaper than bottled water or milk, there is little incentive to find more efficient modes of transport or alternative precursors for chemicals currently produced from oil. The oft-quoted saying ‘We didn’t stop using horses because we ran out of hay’ is very true. Long before supplies completely run out, oil and the technologies that demand it, like the internal combustion engine, will be replaced by something else. In all likelihood, those substitutes will be better than the technology we currently have.

A crude outlook

The notion of peak oil appeals to a mindset that cannot believe that the future holds anything but disaster. This outlook can be found in all manner of discussions from the ‘obesity epidemic’ to the pensions crisis precipitated by the ‘demographic timebomb’ to catastrophic climate change. This mood was beautifully summed up by the journalist and former Independent editor Rosie Boycott as she chaired a question-and-answer session with the co-producer of A Crude Awakening, Ray McCormack, in London last Friday. Responding to the suggestion from the audience that the refusal to see that oil has peaked is ‘macho’, Boycott said:

‘Completely hard-wired into every one of us is a belief that literally since we came out of the swamp we’ve been in this thing called Progress. And while it may have brought ups and downs, it’s never let us down. You can chart that things have got more extraordinary and more amazing and diseases have been solved and everything has been solved. I’m in my fifties and I’ve grown up as a child believing that science solved everything. It’s only in the last few years that I’ve realised that science can’t solve some things and science makes things worse… for the first time in all these millions and millions of years that we’ve been here, we’re actually going to go backwards.’

Boycott’s outlook is widely shared, particularly amongst former radicals like herself (she was once at the forefront of feminist publishing, co-founding Spare Rib and Virago Books). Society, it is believed, can no longer move forward and, in fact, the very attempt to solve problems will actually make things worse.

This worldview cannot account for the continuing expansion of both wealth and the duration and quality of life. That does not mean that there are no problems in the world today – there are many massive problems to be tackled. New problems, some of them the product of human activity, will emerge. But the most serious possibility that society might really ‘go backwards’ will come from the belief that Progress is a failure. Boycott’s comments are a very good illustration of the societal suicide note that many people seem anxious to write.

Oil production has almost certainly not peaked. Even if it has, it’s high time we moved on to smarter technologies. But if the ideas that underpin A Crude Awakening become truly popular, then civilisation itself may well have peaked, disintegrating into a heap of self-doubt.

A Crude Awakening was released in the UK on 9 November. Visit the film’s UK website here.

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(1) Oil Market Report, International Energy Agency, October 2007

(2) Brazil announces new oil reserves, BBC News, 9 November 2007