Peak Oil Can Fuel a Change for the Better

The advent of peak oil means we should prepare for a downscaling of our highly energy and resource-intensive lifestyles.

What is peak oil and why does it matter? And what effect will it have on the Western lifestyles we take for granted? These are not questions that many people are asking themselves yet, but this decade is going to change everything. Peak oil is upon us.

Peak oil does not mean that the world is about it run out of oil. It refers to the point at which the supply of oil can no longer increase. There is lots of the stuff left; it’s just getting much more difficult to find and extract, which means it is getting very hard, and perhaps impossible, to increase the overall ”flow” of oil out of the ground. When the flow can no longer increase, that is peak oil. Supply will then plateau for a time and eventually enter terminal decline. This is the future that awaits us, because oil is a finite, non-renewable resource.

The prospect of peak oil is no longer a ”fringe” theory held only by a few scaremongers. It is a geological reality that has been acknowledged even by conservative, mainstream institutions such as the International Energy Agency, the UK Industry Task Force and the United States military. Even the chief executive of one of the world’s largest oil companies, Total, said recently he expected demand to outstrip supply as early as 2014 or 2015. Given how fundamental oil is to our economies, this signifies the dawn of a new era in the human story.
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While the supply of oil is stagnating, demand is still growing considerably. China and India are industrialising at an extraordinary pace, requiring huge amounts of oil, and even in the Middle East and Russia – the main oil exporting regions – oil consumption is growing fast. What this means is that competition is escalating over access to the limited supply, and basic economic principles dictate that when supply stagnates and demand increases, oil is going to get much more expensive – a situation that is already playing out.

The problem of peak oil, therefore, is not that we are running out of oil, but that we have already run out of cheap oil. Currently the world consumes about 89 million barrels a day, or 32 billion barrels a year. Those mind-boggling figures are why oil is called the lifeblood of industrial civilisation. It should be clear enough, then, that when oil gets more expensive, all things dependent on oil get more expensive. Since almost all products today are dependent on oil for transport (among other things, such as plastic), the age of expensive oil will eventually price much global trade out of the market. Peak oil probably means ”peak globalisation”.

This may well result in the localisation of economies – not as a top-down initiative, nor as a grassroots uprising, but simply as a consequence of markets reacting to high oil prices. This dynamic will change the world fundamentally over the next few decades, and the chief economist of the International Energy Agency recently said we should have begun preparing for the end of cheap oil at least 10 years ago. Some energy analysts are even suggesting peak oil might signify the ”end of economic growth”, as economies need cheap energy to grow. If that is so, the future is not going to look anything like the past, and we should be preparing ourselves for this – psychologically, socially, economically and politically.

The rise of consumer societies since the industrial revolution has only been possible due to the abundant supply of cheap fossil fuels – most notably, oil – and the persistence of consumer societies depend upon continued supply. In the absence of oil, for example, the average Australian would need the labour of about 130 ”energy slaves” working eight hours a day to sustain their lifestyle. The looming implications of peak oil suggest the global consumer class should begin preparing itself for a significant downscaling of the highly energy and resource-intensive lifestyles that are widely celebrated today.

This may be desirable for environmental and social justice reasons, of course, but oil supply may soon enforce such downscaling, whether it is desirable or not. While the requirement to consume less stuff will be a great and unpleasant cultural shock for all those who do not anticipate it, members of the global consumer class could actually benefit from this transition by voluntarily embracing a ”simpler life” of reduced energy and resource consumption. Consume less, live more. It’s well worth considering.

Although energy supply issues undoubtedly have the potential to cause great human suffering, if handled wisely the forced transition away from energy-intensive consumer lifestyles could lead humanity down a more meaningful, just and sustainable path. We need to reimagine the ”good life” beyond consumer culture. But it is important to understand that we must leave consumer lifestyles before they leave us, because if we wait for them to be taken from us by force of circumstances, the transition beyond them will not be a blessing but a curse.

But do not take my word for it. Now, more than ever before, we need to think for ourselves.

Further Reading:

• Read Dr. Smauel Alexander’s full paper: Peak Oil, Energy Descent, and the Fate of Consumerism

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Dr. Samuel Alexander is a lecturer in ‘Consumerism and Sustainability’ at the Office for Environmental Programs, University of Melbourne. He is also Co-Director of the Simplicity Institute (www.simplicityinstitute.org), a research institute that addresses issues related to sustainable consumption. This piece is an edited version of a lecture organised by Melbourne Free University.