Summary
The best known reason is to minimise your contribution to climate change, but in 2007, much evidence has appeard that the world's oil reserves are becoming exhausted much earlier than previously expected. Just as climate change was ignored by too many for too long, so the imminent decline in oil production is being ignored by many organisations and individuals, even though the evidence is widely available, and the effects on mankind and the environment will be enormous.
This is the evidence on declining world oil production.
Oil production in many countries has peaked
In these countries it has now started an irreversible decline.
For example, UK oil production peaked in 1999, the UK became a net importer of oil in 2006 [36], and production is predicted to fall to 1.0 million barrels per day by 2012 (60% of current consumption) according to the International Energy Agency (see 'World will face oil crunch in five years' Financial Times, 10 July 2007)
This is true for many oil-producing countries of the world (source [a]):
USA, Mexico, Argentina
Denmark, Norway, Romania, Turkmenistan, United Kingdom, Uzbekistan,
Oman, Syria, Yemen,
Egypt, Gabon, Tunisia,
Australia, Indonesia
Natural gas stocks are also limited, although will last a little longer than those of oil. The UK became a net importer of natural gas in 2005 [36].
Where is the remaining oil?
This means that oil reserves are concentrated in fewer and fewer countries.
Share of official reserves at end of 2006 (source [a]):
| % of total | Country |
| 22.0 | Saudi Arabia |
| 11.4 | Iran |
| 9.5 | Iraq |
| 8.4 | Kuwait |
| 8.1 | United Arab Emirates |
| 6.6 | Venezuela |
| 6.6 | Russian Federation |
| 3.4 | Libya |
| 3.3 | Kazakhstan |
| 3.0 | Nigeria |
| 2.5 | USA |
| 15 | Others |
Not many of these countries have a stable political system.
How big are the reserves?
Figures from the BP website [a] show reserves at the end of 2006 equal to 41years at current production levels.
(from:
• Total production: 81.7 million barrels per day in 2006
• Total reserves: 1210 billion barrels at end of 2006 )
However
• these official figures are probably overestimates; according to Mamdouh Salama (consultant to the World Bank) oil reserves in the OPEC group of countries are no more than 500 billion barrels rather than 800 billion barrels (see utube videos: www.youtube.com/watch?v=brgO-MzPKs4 and www.youtube.com/watch?v=HR-D9fkKaM4).
So the remaining reserves are probably equivalent to 30 years at current production levels.
• new oil discoveries are tailing off - currently equal to only one-fifth of consumption rates.
• we have extracted the easy half of the reserves; the remaining half will be more difficult.
• the remaining reserves will not be extracted at a uniform rate and then halt completely; instead there will be a peak followed by a steady decline.
When will production fall?
Most experts agree that this will be at some point before 2015.
For example the CEO of Shell has said "after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand" (www.theoildrum.com/node/3548).
In fact there is now some evidence that the peak has been passed already:
• World crude oil production levels reached a peak in May 2005 and have since declined by 2% (previously production was increasing at a rate of around 3 % per year):
see www.theoildrum.com/node/3381
• This is despite a strong underling increase in demand (estimated at 2% by the IEA) and there do not seem to be reversible factors for the fall in production
• This has been reflected in a large increase in the price of oil:
• The German-based Energy Watch Group released a report in October 2007 saying the world's oil production peaked in 2006 and from now on will drop by around 3% a year. It says that by as early as 2030, the global availability of oil will be half of what it was at its peak http://edition.cnn.com/2007/BUSINESS/10/24/oil.decline/ though this view is not universal.
What will happen to the oil price?
The oil price has already risen fourfold in the last five years. Demand is relatively inelastic - so the price is likely to continue to rise. The very poor countries are now being priced out of the market. Increasingly, bidding will be between the richer countries. There will be a large shift in economic balance from the consumer countries to the producer countries.
What will be the effects?
Oil used in every aspect of modern life - major petroleum products include petrol, aviation fuels, kerosene, diesel, lubricating oils, bitumen, plastics, synthetic rubber, packaging, fabrics, dyes, adhesives and paint, so the effects are bound to be enormous. Gas production has also peaked in many countries, and the prices of gas and of other forms of energy are likely to rise.
How should individuals respond?
They should rapidly reduce their dependence on fossil fuels - previously carbon dioxide calculators have been promoted as a way of assessing how much an individual has contributed to climate change - they can now also be promoted as a way to assess an individual's or organisation's vulnerability to future rises in fossil fuel energy costs.
Using a calculator, individuals can plan an increase in their energy efficiency (and reduction in energy use). An increase in energy efficiency (and reduction in energy use) of 10% per year should be possible for most people without causing major hardship. Then if there is a sudden large increase in energy prices, this will not be economically catastrophic. For example, individuals who commute large distances by car will have large CO2 emission, and will be highly vulnerable to future increases in the oil price. By changing job or moving house, they will be more prepared for the future.
Individuals can also champion increase in energy efficiency within their own communities e.g. the Transition Town initiatives where individuals have formed groups to consider how their community (typically populations of 10,000 to 20,000) can move towards sustainable living - see http://transitiontowns.org/ and www.transitiontownwestkirby.org.uk.
How should environmental organisations and campaigners respond
If oil and gas use is going to decline anyway through exhaustion of reserves, there may be less to be gained by exhorting people to reduce their use voluntarily - some people might cut back on flying or driving but there is the possibility that the oil saved will just be used by someone else either in the same country or elsewhere. The largest reserves are in the middle east - western environmentalists have little influence over the extraction of oil there, and it may be difficult to persuade governments there to leave extractable oil in the ground. Perhaps it is inevitable that all extractable oil (i.e. extractable at an economic price) will be used, especially as the price rises and demand for fuel e.g. for food transportation becomes ever more pressing.
But environmental organisations and campaigners still need to push for restraint - and to change the focus. We need to attempt to persuade governments to leave oil and gas in the ground if there is a chance of success. We also need to make sure that the declining use of oil (and gas) is managed with least effect on the environment e.g.
• oppose new coal mines that might be proposed to replace the declining use of oil and gas - this will worsen climate change and merely put off the inevitable need to move to sustainable living - perhaps we should be campaigning to close all existing coal mines in locations that we have any influence over.
• oppose the manufacture of oil from coal
• oppose exploration in areas such as the Antarctic and Arctic that was previously denied but which will no doubt be judged 'essential' by some.
• oppose nuclear power which many believe is unsustainable due to the problem of disposal of nuclear waste
Environmental organisations and campaigners also need to anticipate and resists threats to the environment that will arise as a result of the rise in energy prices, e.g.
• there may be more pressures on endangered species through being hunted for food as food supplies become unreliable (food transportation, and manufacture of fertilisers and pesticides all depend on fossil fuels).
Sources
[a] statistical_review_full_report_workbook_2007.xls
downloaded October 2007 from www.bp.com/sectiongenericarticle.do?categoryId=9017890&contentId=7033493
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