TED TRAINER. Oil wake-up call.

Apr 20, 2017

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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