This lecture is on peak oil.
Peak oil is the time at which oil production levels off and begins to decline.
Modern oil production started in 1859 in Pennsylvania, so we'll take 1859 as the basis for our graph
here where we plot oil production against time.
You can see that little red dot at the top of the graph.
That is the abstract theoretical concept of peak oil, and it's theoretical because we
don't exactly know when we will have reached peak oil.
Some people think we have already reached it, some people think we're pretty close to
it, but we can't know exactly how much oil is still left in the ground.
We do know that oil is a finite resource and so at some point we're going to reach that
peak and we are going to be descending that slope.
One way we know that we're getting close to the peak is that extracting oil becomes increasingly
more difficult and expensive, and we saw that that is exactly what is happening with fracking.
So, we are close to that downward slope, or maybe we're actually on it, and we might slide
down that slope a lot faster than we went up it because demand for oil is increasing.
Developing economies require oil to ramp up their production.
There is a growing global population in the U.S.
The biggest consumer of oil is using more and more oil all the time so demand is definitely
increasing.
Now, here is a graph that shows what it looks like for a developing economy, this is China,
to grow in terms of its energy use.
You can see the blue and the red lines track each other perfectly.
So, at this point in time with the way our economy works now there really isn't a way
to develop unless you use a lot of oil.
I want to give a couple quotes from people within the oil industry who talk about peak
oil.
Now, there are not environmentalists.
These are not theoreticians.
These are people who have been very close to the data, and in fact the concept of peak
oil was invented in the 1950s by someone who was working in the peak oil industry.
William Cummings said, "All the easy oil and gas in the world has pretty much been found.
Now comes the harder work in finding and producing oil from the more challenging environments
and work areas."
Ron Oxburgh who was the Chairman of Shell Oil said, "It's pretty clear that there is
not much chance of finding any significant quantity of new cheap oil.
Any new or unconventional oil is going to be expensive."
I keep the graph of peak oil up on the slides because this is the most important image for
understanding what peak oil is.
Now, take a good look at that.
Here is another way to represent peak oil.
There is basically no more low-hanging fruit in terms of oil, and you can see this chart
shows how oil discoveries have been declining since 1964, and the red bars there on the
right project out to what it will probably be like as we move forward.
We're just not finding that much oil in the ground anymore.
Now, the big question is why is oil so important?
This is really what I want to talk about.
It's the most versatile and useful energy source humanity has ever had, and 40% of the
energy that we use in the world now comes from oil.
One barrel is equivalent to about 25,000 hours of human manual labor, so this is kind of
astonishing when you think about it.
No other energy source, not solar, not wind, not anything comes close to the power and
density of oil.
95% of all transportation relies on oil, and this is really critical because transportation
is a part of all of our other systems.
If we run out of oil, or if oil becomes extremely expensive transportation would be disrupted
and basically all of our other systems would also be disrupted.
Now, there is still oil left in the ground, but each barrel is becoming more and more
expensive.
Even 10 years ago oil was about $50.00 a barrel, and now it is $100.00 a barrel, and that's
a huge increase in a pretty short amount of time.
What are some of the consequences of peak oil?
Well, the main consequence is that everything that our lifestyle depends on will become
more expensive, possibly a lot more expensive.
So, energy, transportation, heating and cooling, food, water.
It takes oil to transport the water, to purify the water.
All the products that we have gotten used to in our culture require oil for manufacturing
and transporting.
The challenge going forward is to think now about how to deal with the increasing cost
of basic services that are reliant on oil, and there are basically three things we can
do.
One, we can continue to research and invest in alternative energy.
Two, we can reduce consumption on an individual level.
Three, we can redesign our basic systems like transportation and food so that they use less
oil.
Here are a few things you might want to look at.
We don't normally recommend fiction, but there is a great book by Jonathan Franzen called
"Strong Motion" written in the early 90s that appeared to anticipate fracking which wasn't
really talked about very much.
So, if you like fiction I highly recommend that book.
Thank you.