What is peak oil? Are we out of oil?

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When I was younger, there was a lot of hype around the concept of “peak oil”. Technically, the phrase only refers to the point where we reach the highest level of global oil production, after which it begins a perpetual decline. This is likely to happen at some point, as we exhaust the cheaper oil sources to access and move to an economy less dependent on it.

However, efforts to predict when this will happen have a poor track record. The 1956 paper that introduced the concept suggested that the United States would reach peak oil production by 1970. Oil production peaked around that time and began to decline—but then new exploration and extraction techniques were developed, and oil production picked up again, reaching in 2017 and then surpassed the heights hit in 1970.

And when I was a teenager, between 2007 and 2008, there were a lot of assertions that we had “peaked oil” globally, often coupled with dire predictions about the future availability of gasoline – but in reality, US oil production has doubled since 2008. Until 2016, and OPEC chose to ramp up production, the big story for the mid-2010s was an “oil glut” as prices fell to historic lows.

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There is a sense that “peak oil” is less a question of how much oil is already in the ground than how we can expect it to be priced. But while the cost of gasoline has huge economic and geopolitical implications, I don’t think that’s the whole reason behind this idea.

There is a moral undertone to worries about peak oil. Like almost all natural resources, oil is ultimately finite, and we extract and consume it without any special regard for long-term planning. There is a sense in which it feels karmically just and appropriate for a foolish short-sighted civilization to run out of the resources it works on (and the resources it burns at great cost to the world). People were drawn to the idea of ​​peak oil because it provided an additional justification for moving away from petroleum fuels, and a sense of an impending moment of truth where we have to shift away whether we like it or not.

Clear view of resource usage

It turns out that karmic fit is a terrible way to make predictions about economic reality. We might feel like a self-destructing civilization just facing its own deserts, but that wouldn’t be an effective way to predict future resource availability at all.

While there are real physical limits to resource extraction, predicting these limits is very difficult, as technology advances keep access to resources increasing. The 1956 paper I refer to above was very good at forecasting US oil production by contemporary methods – it just failed to anticipate massive technological changes. It was very foolish to fail to anticipate the massive technological changes!

Given decades and a strong profit motive, it’s actually not surprising that there have been massive adjustments to how oil is drilled and how it is found. In a way, “technology won’t change much over decades in a relatively new, highly profitable industry” isn’t a conservative prediction, but a foolish one.

I’ve been thinking about this because of the news that we’ve just discovered a 50-year deposit of phosphorus in Norway. Phosphorous is another resource I’ve heard we may be lacking. (It’s one resource that so-called declining growth analyzes tend to look at more closely, with one paper calculating a “planetary limit” of less than 1 ton of phosphorus per person per year.)

Phosphorus is important for fertilizers, solar panels, and electric batteries, and until recently, the world had proven reserves of about 71 billion metric tons. Then, Norge Mining, based on information from the Norwegian Geological Survey, recently found another 70 billion metric tons — just like that.

And unlike when companies find more crude oil, this discovery is largely uncomplicated great news. reduces Europe’s dependence on imports for strategically important resources; It should help keep the price of fertilizer low, thus reducing pressure on food prices; This should mean that manufacturers of batteries and solar panels can more easily plan continued access to the resources they need. (For the United States, it helps that the discovery was made in a friendly country.) It’s also just a reminder that we must use a careful understanding of what it means for a resource to be “expected to run out”.

The world is enough

The planet has limited physical boundaries that are important to keep in mind. But these limited physical limits are often rather formidable – we live on a very large piece of rock! Often, the factors that limit our access to resources are not the resource itself, but rather our scanning technology and our extraction technology.

Instead of living in a moral game where we have foolishly run out of a resource we used to treat as infinite, we live in a more complex world where more investment and development can secure more resources, but where we also need to consider when it is worth the governments investing those resources.

Burning oil has all the dire consequences for the world, as we thought. But we will not “run out” – we will have to replace petroleum with cleaner energy sources as a policy option.

A projected shortage of resources such as phosphorus is not a reason to claim that the planet cannot sustain its current population or current level of wealth and needs to resign itself to a poor future – it is a reason to look for more phosphorus. Rather than saying that limited access to fertilizer is a “planetary boundary” that we must honor by making people poorer, we can keep in mind that limited access to fertilizer is a political choice.

I’m hardly saying that we should always opt for a policy of more mining and exploration – it depends on what we’re mining and mining for – but I sometimes see an impulse to pretend that this isn’t a political choice at all, it’s just an inevitable law of nature, and I think it’s important to get Ownership of the economic forces that govern access to resources in our world.

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