Climbing The Peak
by Claire Burnet
Peak Oil is an issue that will affect everyone – in fact it is affecting us already.
The term Peak Oil refers to the point at which demand for crude oil overtakes supply. When this happens, the cost of oil will rise steeply and be harder to obtain with supply interruptions likely.
Oil won’t suddenly become unavailable, but over time there will be less around.
Frustratingly, oil supply is gradually diminishing yet demand is increasing, especially from rapidly industrialising countries like China and India. The law of supply and demand guarantees that increased demand + reduced supply = a higher price.
In fact we can see this happening now. Oil prices plunged temporarily at the time of the global financial crisis because countries couldn’t afford (simplistically) to buy as much oil (reduced demand + increased supply = a lower price). Today with the world financially recovering, countries are using more oil and prices are again on the rise.
If it continues along its present trajectory, oil will reach $200 a barrel between 2014 and 2016.
Australia’s Federal, State and local governments rely heavily on accessible, cheap oil for their daily operations, as do we all.
And it isn’t just transportation we use oil for. Nearly everything we buy (food, clothing, housing, medicine, fertiliser, plastic, toiletries, tyres, even solar panels) requires oil to some extent. So do our health, education, aged care and emergency services.
The International Energy Agency (IEA) is a body that represents government energy interests from Australia, the USA and Europe among others. They are not prone to rash statements and are looked to for accurate advice on oil availability. In an interview on ABC’s investigative television programme ‘Catalyst’ in 2011, the IEA’s Chief Economist, Dr Fatih Birol said…
“When we look at the oil markets the news is not very bright. We think that the crude oil production has already peaked in 2006. The existing fields are declining sharply in North Sea, in United States, in Gulf of Mexico. Just to stay where we are today we have to find four new Saudi Arabias – this is a tall order.”
The IEA believes countries should have started to face the challenge of peak oil twelve years ago. Yet only a handful of Australian government departments and councils are beginning to commission reports on their susceptibility to Peak Oil.
It is clear that oil dependent countries like Australia will find it increasingly difficult to grow our economy, yet politicians and economists continue to base policies on the availability of cheap oil. Surely it is time for a grass roots, people-led approach?
If you are reading this article you probably know at least a little about permaculture and how we ‘permaculturalists’ have long recognised and taught the need to reduce our reliance on fossil fuels such as crude oil. For those of us who understand what the future holds, it is important we start planning for it and demonstrate to our children and neighbours how we can survive and even prosper on less oil.
Remember – it is not a matter of if Peak Oil will happen – it is a matter of when.
If you would like further information I encourage you to look firstly at the highly informative Peak Oil Tasmania website (www.peakoiltas.org)
See the link above for a chart showing actual production and expected oil output from all sources, including non traditional resources such as tar sands.
Claire Burnet is on the committee of Peak Oil Tasmania
and owns Groovy Native Permaculture (www.groovynative.com.au)