TED TRAINER. Oil wake-up call.

Almost no one has the slightest grasp of the oil crunch that will probably hit them within a decade. When it does it will literally mean the end of the world as we know it. Here is an outline of what some recent analysts are saying. We had better think carefully about their claims. Nobody will of course take any notice.  

When oil was first discovered the Energy Return on Energy Invested in producing it was over 100/1, but several people report the estimate that by 2000 the global figure was down to about 30, and a decade later it was around 17. Thus they are having to go to deep water sources (ER of c. 10) and to develop unconventional sources such as tar sands (ER of c. 4), and shale (with an even lower ER.)

As a result the capital expenditure on oil discovery, development and production is skyrocketing but achieving little or no increase in production. Capital expenditure trebled in a decade, while production fell dramatically.

A number of analysts do not think a modern society can tolerate an ER under 6 – 10. If this is so, how long have we got if the global figure has fallen from 30 to 18 in about a decade?

Several claim that because of the deteriorating resource quality and rising production costs the companies must be paid at least $100 a barrel to survive.   But oil is currently selling for c. $50/barrel. The companies are carrying very large debt and many are going bankrupt. 

There is now considerable effort going into working out the relationships between deteriorating energy EROI, economic stagnation, and debt. The situation is not at all clear. Some see declining EROI as already being the direct and major cause of stagnation proceeding to a terminal global economic breakdown.

But there is a far more worrying aspect of your oil situation than that to do with EROI. Nafeez Ahmed has just published an extremely important analysis of the desperate and alarming situation that the Middle East oil producing countries are in, entitled Failing States, Collapsing Systems, Springer, 2017. He confronts us with the following basic claims:

  • In several countries Oil ER is falling, and oil production has peaked, and thus their oil export income is being reduced.
  • In recent decades populations have exploded, due primarily to decades of abundant income from oil exports.
  • There has been accelerating deterioration in land, water and food resources, ecological conditions, including climate change.
  • So, more and more of the falling oil income now has to go into importing food.
  • Increasing amounts of oil are having to go into domestic uses, reducing the amounts available for export to the big oil consuming countries.
  • In many of the big exporting countries these trends are likely to more or less eliminate oil exports in a decade or so, including Saudi Arabia.
  • These mostly desert countries have nothing else to earn export income from except sand.
  • Falling oil income means that governments can provide less for their people, so they have to cut subsidies and raise food and energy prices.
  • These conditions are producing increasing discontent with government, civil unrest, and conflict between tribes over scarce water and land. States are decreasingly able to cope. Unemployed, desperate and hungry farmers and youth have little option but to join extremist groups such as ISIS where at least they are fed.
  • Thus there is a vicious positive feedback downward spiral towards failed states, to which it would seem there can be no escape, because it is basically due to the oil running out in a context of too many people and too few land and water resources.
  • There will at least be major knock on effects on the global economy and the rich (oil-consuming) countries, probably within a decade. It is quite likely that the global economy will collapse as the capacity to import oil will be greatly reduced. When the fragility of the global financial system is added (… remember, debt is now 6 times world GDP), instantaneous chaotic breakdown is very likely.
  • Nothing can be done about this situation. It is the result of ignoring fifty years of warnings about the limits to growth.

So, if these people are right, the noose tightens, around the brainless taken for granted ideology that drives consumer-capitalist society and that cannot be even thought about, let alone dealt with. We are far beyond the levels of production and consumption that can be sustained or that all people could ever rise to. We haven’t noticed because the grossly unjust global economy delivers most of the world’s dwindling resource wealth to the few who live in rich countries. Well the party is now getting close to being over. You don’t much like this message …well have a go at proving that it’s mistaken. Nar, better to just ignore as before.

If the foregoing account is more or less right, then there is only one conceivable way out. That is to face up to transition to lifestyles and systems that enable a good quality of life for all on extremely low per capita resource use rates, with no interest in getting richer or pursuing economic growth. Such a “Simpler Way” would easily designed, and built…if that’s what you wanted to do. (See thesimplerway.info/) 

Is the mainstream working on the problem, is the mainstream worried about the problem, does the mainstream even recognize the problem … I checked the Sydney Daily Telegraph yesterday; 20% of the space was given to sport.                                                                     —–

Ted Trainer is a retired lecturer from the School of Social Work, UNSW. He has written numerous books and articles on sustainability.

Ahmed, N. M., (2017), Failing States, Collapsing Systems, Dordrecht, Springer. Alice Friedmann’s summary is at http://energyskeptic.com/2017/book-review-of-failing-states-collapsing-systems-biophysical-triggers-of-political-violence-by-nafeez-ahmed/ 

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2 Responses to TED TRAINER. Oil wake-up call.

  1. Greg Bailey says:

    This article is both highly interesting and disturbing. I tend to agree with Ted that nothing will be done because it will require international cooperation that involves sitting down and talking rationally with leaders of Middle Eastern and other oil producing countries, and not just regarding them as sites for further Western exploitation. However, any meaningful international cooperation is under serious attack from the various populist movements springing up everywhere.

    In addition neoliberalism as an economic and cultural system largely eschews long-term planning of the kind that will be required and discourages governments from doing the same. This is despite the various Infrastructure Planning bodies that are never independent of the governments they serve or the industries they represent.

    Finally, the general public is so used to an apparently endless supply of oil that it will completely ignore the kinds of predictions Ted communicates, nor will it have much concern about the food crises which seem inevitable in some oil producing countries in the not too distant future. It is just all too difficult. It is here that national governments should take long-term perspectives, that for which they are elected.

  2. paul frijters says:

    bit over the top, but some good points. I went to a conference on just this a month ago in London with several key government officials there from the oil countries of the Middle East. The issue of the oil revenue crunch was the main thing they worried about, because the oil incomes have been used to hire far too many civil servants and encourage cheap energy dependence that has completely permeated the structure of the whole economy. So yes, the collapse of most of the oil dependent countries is now merely a matter of time and a question of when the financial reserves run out. The collapse will not be pretty, but of course most of those countries are relatively sparsely populated, so the worst affected will probably be the migrant workers from other countries, who will be sent back.

    Several inaccuracies in the write-up above. The population explosion is not an oil phenomenon as it has been a similar population explosion in other parts of the world (indeed, fertility rates are down a lot). The domestic consumption of oil has everything to do with (ancapitalistic) energy subsidies and almost nothing with ‘needs’. And these countries do have an obvious other thing to sell: solar energy.

    And the current problems are not due to running out of local oil either, but due to the drop in prices as a result of a glut of cheap shale oil and gas hitting the world market (too much oil!).

    Another important thing in general to say though is that the problem is one of political capture. It has bugger all to do with neoliberalism (of which you wont find much in that region!), or any other form of Western thinking.

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