Sunday, May 16, 2004
Running on empty
Posted by David Smith at 08:59 AM
Category: David Smith's other articles

Review of The End of Oil, by Paul Roberts

The oil era for the world economy started in earnest in 1901 with the discovery of a gusher on what turned out to be the giant Spindletop field in Texas. Two years later Henry Ford produced the Model A with a gasoline engine. Within a decade there were 1m petroleum-powered cars and trucks on American roads.

Oil went global before the first world war. The British Admiralty switched its warships from coal to oil in 1912 and took steps to secure supplies in Persia. Saudi Arabia, originally thought of as a poor prospect, produced its own spectacular gushers. The Middle East’s strategic importance was established. The rest is history.

But oil, too, will soon be history, according to Paul Roberts. The End of Oil does what it says. It looks at an energy economy that is “falling apart” because global oil demand will soon begin to outstrip supply — half of easily available reserves will be consumed over the next three decades. It looks, in short, at a world beyond oil.

Roberts’s timing is good. Hopes that the end of the Iraq war would usher in an era of stable Middle East supplies have been dashed. Tensions in Saudi Arabia, the world’s biggest oil producer, have rarely been greater. Oil has jumped to $40 a barrel and Americans are paying record prices (admittedly still under $2 a gallon) for petrol.

The arguments about the future of oil are familiar. In 1956 the geophysicist M King Hubbert predicted that American oil production would peak in the late 1960s or early 1970s and then decline. He was right. In 1974 Hubbert predicted that global oil output would peak in 1995. In that he was mistaken, but the debate about a global “Hubbert peak” goes on.

Some say it has already occurred, others that it is imminent. Even the optimists say it will happen over the next 30 years. As significantly, the supply of “important” oil — that produced outside the Organisation of Petroleum Exporting Contries — will peak before 2020. Oil production in America and Britain’s North Sea is already in decline. Demand from China and other emerging countries will mean, on present trends, a doubling of global consumption over the next quarter century.

“On present trends” undermines the certainty with which this book is written. The emergence of Opec power in 1973, and the era of more expensive oil that ushered in, changed behaviour. Motorists, even Americans, opted for more fuel-efficient vehicles. Speed limits were cut. More widely, and this was partly because of a shift away from manufacturing and towards service industries, economies used less energy for a given amount of economic growth. That some of this has been reversed in recent years, most notably by America’s SUV-loving drivers, is explained by the fact that we have, until relatively recently, been through a new cheap oil era.

That has come to an end, and Roberts’s book, aimed mainly at energy-inefficient Americans, is a useful reminder of that. Quite when the oil will run out is open to doubt. Higher prices will restrain demand, as well as bring forth extra supply. Whether the future lies in hydrogen or some as-yet- undeveloped technology can be debated. But something will have to change. And long before the oil era celebrates its bicentenary.

From The Sunday Times, May 16 2004

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