Casaubon's Book

Note: This is another lightly revised version a piece I wrote some years ago at the oldest incarnation of this blog. It answers a question I get a lot – if people have been saying that the oil is going to run out for years, and if 30 years ago people thought we were going to have an ice age, why should I believe you that peak oil and climate change are real problems.

A lot of what I write works from the assumption that we all agree that peak oil and climate change are happening and going to be life-changing events. And yet, some people who read this blog don’t necessarily agree on this subject, or they don’t see the effects has being as profound as I do, or perhaps the idea of peak oil or climate change is fairly new to them, and they don’t know what to believe. So sometimes, we need to back up, and make the case for something that is always new to some people. The truth is that if my writing is to be anything other than preaching to the converted, we have to answer the skeptics.

That’s why I was so delighted when I got an email from Frazzlehead who asked me why this particular energy crisis was different than the one of the 1970s. She observed that she’d been reading 1970s back to the land texts, and finding the exact same narrative in them – that we’re running out of oil, that soon the economy will crash and we’ll need to go back to farming. Why, she asked, is it right this time?

“I look at the date it was written and think, see? They’ve been saying this for ages – and it hasn’t happened. Still, something in my gut tells me that it’s different this time, that this isn’t just a robot waving it’s silly arms saying “Danger, Will Robinson, Danger! Danger!” … that something really is wrong and things will change dramatically.
What I can’t quite put my finger on is the evidence for *this* time being the *real* time.
Is the Boy just crying wolf again? Or is there really a wolf?
Can you help me see why *this time* it is for real?”

This is an extremely important question – the fact is, ever since the beginning of the 20th century, when we recognized we really can have “world” wars, since the advent of the military capacity to destroy the lives of billions, since we recognized our impact on the earth, we’ve been afraid we’d destroy it. How do we know that this time, we really are?
Or, as I’ve argued, how do we know that we’re doing enough harm that even if we don’t actually achieve apocalypse, it isn’t going to be fun.

And of course, this is a good question for climate change as well. There’s a small grain of truth in the oft-repeated claim that in the 1970s, climate scientists were predicting an ice age – only a small one but we need to look at that truth. The fact is, many people remember these predictions of the end of everything, and remember Y2K as well, and then think “the evidence is against those who say things are going to change – we’ve heard this before” This is a reasonable critique, and one that requires a good answer – or a series of them. That is, it isn’t enough to say “Well, this time we’re right.”

The reason we want multiple answers here is that there are several questions. The first one is this “What are the differences between the scientific and technical cases for peak oil now, and climate change now vs. then.” But that’s only part of the answer. Because most of us aren’t climate scientists or petroleum geologists, and we’re not going to read every single bit of information on this subject, so to some degree, we have to rely on our own analysis. We can weigh the credibility of the technical analyses to one degree or another, but we also need grounds for distinguishing between those analyses. The ideal grounds would be that we completely understand everything the scientists are saying, but since that’s not true, we need another set of analytic tools.

So the next question we have to answer is this – what present day evidence do we have for each case? How can I see this with my own eyes? And how do the various available accounts I’m being offered match up with both the scientific evidence and the evidence of my eyes? That is, both the “disasters are coming” and the “it’ll never happen” crowds are telling stories – they are giving an account of the past and the future. Picking the right story depends on our being able to match up evidence with the narrative being provided to us.

And while those two data points are convincing, they aren’t everything we need to know to make a decision – we also need to ask ourselves how to apply an imperfect case for something. That is, assuming that very few things about the future can be known with absolute certainty, we need to know what the case for action is – that is, how should we use the information above? What tools of analysis will get us the best results?

I’m going to go through these questions, one at a time, to the best of my ability. Because the subject is such a long one, this will appear in two parts.

First, the technical analysis:

First of all, what was the evidence for 1970s style depletion analyses? I’m going to admit here that I am somewhat handicapped on this question by having been born during the 1970s oil crisis – that is, I have no direct experience of the data that was coming in during that period – I was busy analyzing the comparative merits of growing up to be a garbage collector (cool truck) or a vet (cool puppies and kittens), and thus not paying much (any) attention to petroleum geology.

That said, I’ve seen the same accounts Frazzlehead has, popular narratives in which we were “running out of oil” but I’ve seen far fewer scholarly accounts that make that same claim. This is not to say that there weren’t any, just that they are much more difficult to find than people think.

In fact, peak oil theory doesn’t make the claim that “we’re running out of oil” either, except in the sense that whenever you make any use of a non-renewable resource, you are reducing the amount that’s left and contributing to the larger process of “running out.” The peak of oil production occurs at the moment that we have used ½ of the oil in the ground. No peak oil scholar that I’ve ever seen has suggested that we are in immanent danger of having the world run out, but rather that demand (how much oil we’d like to burn) will exceed supply (the amount we can get out of the ground) at some point. Some consequences under the current system of this difference between demand and supply would be higher prices, spot shortages, poor people being priced out of the market altogether, and gradually more and more people being priced out or having their usage dramatically reduced. But that’s not the same as actually running out.

It is safe to say that if people in the 1970s were claiming that we were in immanent danger of running out, they were really, really deeply mistaken – and that that mistake can’t be chalked up to improvements in science. But I suspect that most geologists weren’t saying that – instead, they were saying something more complicated and nuanced, and, as is often the case, complicated, nuanced ideas got dumbed down to something less accurate but more exciting sounding.

To get some evidence of this, let’s look at _The Limits to Growth_ which was perhaps the single most famous text that said we were “running out of oil” in the 1970s. But, of course, that’s not what it said at all. I’m going to quote here Richard Heinberg’s analysis of TLTG, because I think he covers all the salient points:

“Several economists have attempted to debunk the conclusions presented in LTG. For example, in _Eco-Scam: The False Prophets of Ecological Apocalypse_, Ronald Bailey wrote that “In 1972 The Limits to Growth predicted that at exponential growth rates, the world would run out of gold by 1981, mercury by 1985, tin by 1987, zinc by 1990, petroleum by 1992, and copper, lead and natural gas by 1993.” _Facts Not Fears: A Parents Guide to Teaching Kids about the Environment_ by Michael Sanera and Jane S. Shaw repeated part of this list and pointed out that “The world did not run out of gold by 1981, or zinc by 1990, or petroleum by 1992, as the book predicted.”

However, these were not predictions contained in the book. The reference for these claim is Table 4…The table lists three sets of numbers: a static reserve index (how long known reserves would last at 1972 rates of consumption); an exponential reserve index (how long known reserves would last at an exponentially increasing rate of consumption); and an expontential index calculated using five times the known reserves (that is, assuming substantial new discoveries of the resources in question). Criticisms of LTG focused only on the second, ‘exponential reserve’ set of numbers which was the most pessimistic, even though the authors clearly stated that this did not constitute a prediction, but merely a statistical extrapolation.” (Powerdown, 93-94)

That is, critiques of _The Limits To Growth_ were made out of context. The authors knew that it was very, very unlikely that we would have massive growth of consumption without any new discoveries, and weren’t proposing that would happen – they were providing context for their larger conclusion that we are at risk of overshoot.

In fact, _The Limits To Growth_ was probably fairly accurate in their overall claims, as the updates have demonstrated. It is important to note that TLTG made the claim, to the extent it claimed things, rather than observed them, that collapse was likely to come not in the 1970s, but at the very end of the 20th or beginning of the 21st century.

They claimed that *overshoot* – the point at which we were exceeding the capacity of the earth to sustain us would happen earlier than that – and in fact, there’s compelling evidence they were right. But they never claimed that the crisis point would be reached at the same moment we reached overshoot – instead, they suggested otherwise. This is an important distinction. That is, TLTG emphasized how urgent it was that we begin to make policy and practical changes that would abate the crisis in the 1970s – that was the time to respond. But those policy changes were designed to avoid an outcome that would occur decades later – and there’s a case to be made that some of them are, in fact, occurring decades later as predicted.

Richard Heinberg at one point observed that he hasn’t been able to find a single example of any peer reviewed paper predicting we were actually going to run out of oil in the 1970s – and yet, many people “knew” that this was the case. I don’t know if that fact is still true – even if there are some, that doesn’t mean they were right. But there certainly aren’t a large number of them.

What was true in the 1970s, is that *American* oil prediction hit its peak. In 1970, American production peaked, just as M.King Hubbert said it would. At the time, nearly everyone denied that Hubbert was right – after all, we’d just produced more oil than we ever had before – why would we expect shortfalls? Well, the reality is that that’s just how it works – the peak is the point at which you produce more than you ever have – or ever will again. So America actually was experiencing serious oil shortfalls, and because of the OPEC embargo, was unable to meet demand.

Looking through my collection of older back-to-the-land accounts, I see several of them claim that we can’t depend on foreign oil. And that may be at the root of our belief that we thought we were running out in the 1970s – we believed that America would largely have to rely on its own oil supplies, which were patently inadequate to meet even 1970s demand. In that sense, we were “running out of oil” because we had ample evidence that we might not always be able to buy it, and our supply was inadequate. That politics changed, and the bottom dropped out of the oil price, giving OPEC incentives to keep our supply coming was a great result – but if the embargo had continued, we might genuinely have been “running out.” And this is a good reminder that absolute oil supplies and political access to them are both relevant.

That’s an important point on peak oil – because access has as much effect as absolute reserves. So, for example, an oil crisis could arise because of our inability to increase imports, or because of structural failures in refining capacity that cause shortages before the absolute peak, or because of geopolitical issues. On the one hand, peak oil is a very simple idea. On the other, if you interpret the term to mean “the point at which supply can no longer meet demand” it gets very complicated. As we saw in 2008, for example, when oil price spiked, many oil producing nations cut exports, reserving oil for their populations while poor importing nations cut imports and experience shortages.

In fact, the 1970s oil shocks offer a useful kind of support for the claims of peak oil in the present. The oil shocks were fundamentally political in nature, but they also offer proof of the fact that a. there are peaks, and b. such peaks are inherently disruptive. The reduction in available oil in the US after its peak left us in a tough spot, politically speaking, and vulnerable to supply constraints caused by outside forces. Several peak oil scholars have correlated regional peaks with periods of societal disruption – that is, when we experience substantial declines in resource access, it causes major problems.

The same argument can be made about the frequently quoted claim that in the 1970s, scientists were predicting an ice age, and now they are predicting catastrophic warming. In fact, in the 1970s, there was some discussion of the possibility of a new ice age, for several reasons. The first is that in the 1970s, particulate emission pollution was so severe that it caused a considerable cooling of the planet. So it seemed possible that we were entering a cooling cycle.

We were also statistically at the end of a period of climate stability, and the possibility that there might be an ice age was discussed. But even Richard Lindzen, one of the formest Global Warming skeptics, has admitted that this was never more than the equivalent of scientists batting an idea around. That is, there never was any strong scientific consensus that we were entering into a period of global cooling *and* most research on this subject was speaking only of natural cycles.

For example, perhaps the most famous article on this subject appeared in Science in 1976, and included the phrase “in the absence of human perturbation of the climate.” That is, the prediction that global cooling would occur was *explicitly* made with the caveat that if we mess with the climate this probably won’t happen. But, as usual, the nuance was removed, and what we get is the idea that we once were really sure we were going to have global cooling.

It is also very important to note that scientists *also* were predicting Global Warming well before the 1970s. A Swedish chemist named Arrhenius discovered and predicted global warming at the turn of the last century, documenting that it was already underway. Charles Keeling was doing work on Global Warming in the 1950s and 60s, and continued to do this work until his death in 2005. In 1979, as Jimmy Carter’s Global 2000 report was being compiled, anthropogenic global warming was cited as one of the most serious problems of the century. So it would be more accurate to say that in the 1970s, there was considerable debate over whether warming or cooling would be the primary concern, and by the end of that decade, there was a growing consensus that global warming was far more likely.

In both cases, one of the most important bits of evidence is the degree of scientific consensus – that is, the sheer number of scholars and researchers that agree that they are seeing evidence of something. Since these scientists will generally come at this issue from different directions – one person studying ice cores in the arctic, another sea level rises, one petroleum geologist studying future projections, another talking about the history of discovery. So while hardly infalliable, scientific consensus matters.

And in both cases, we can claim that there is an enormous difference between scientific consensus now and scientific consensus then. For example, consensus on global warming is overwhelming. The oft-stated claim that there are no peer-reviewed scholarly articles that cast real doubt on the anthropogenic (human caused) nature of climate change is not quite true, but there are very few of them – a handful at best, mostly in minor journals, and compared to 10,000 and more such articles in peer reviewed scholarly journals that take the other position. There are a few real scholars (and a bunch of paid shills for the energy industry) who sincerely believe that climate change is not anthropogenic (there’s no one who doesn’t believe the climate is changing, btw), but the reality is that there are tiny, dissenting minorities on every scholarly community.

It is still possible, for example, to find a few doctors who don’t believe cigarettes cause cancer. It is still possible to find some historians who don’t think the Holocaust ever happened. But these are few, and they don’t change the fact that the overwhelming majority believe otherwise, and, more importantly, that the overwhelming majority of the evidence supports anthropogenic global warming.

In regards to peak oil, the scientific consensus is actually harder to figure out. Every once in a while I run into someone who is a peak oil believer and a global warming skeptic, which I find quite funny. That is, the scientific evidence for global warming is so much greater than for immanent peak oil (which in no means implies that both are not true, merely that there is less certainty and less research in regards to peak oil) that it seems odd to me that one could evaluate the evidence for the less certain one, agree with it, and then dismiss the evidence for the other.

But saying that there’s more controversy in the study of peak oil that climate change is not to say that there is no scientific consensus on peak oil. In 2007, the General Accounting Office of the US Congress released a report that argued that a majority of relevant scholars and oil experts now believe that a peak has already happened or is immanent. There are still significant dissenting viewpoints – he IEA, for example, officially repudiates peak oil while simultaneously predicting year over year supply declines as high as 6% and seriously supply constraints into the 2040s. This amounts effectively to an acknowledgement of peak oil, since virtually no serious assessments put the peak that late – the US Geological Survey, for example, puts the world peak at 2023.

The truth is that it is very hard to predict an oil peak, except in hindsight. At the 2006 ASPO (Association for the Study of Peak Oil) conference, I heard peak oil researchers give dates that ranged from 2012 or later to 2005 – so even the experts who do believe in peak oil are uncertain. Because there is no reliable reserve data on total available oil, we can only look at the history of our discoveries (that is, discoveries peaked in the 1960s – since then we’ve been finding a dramatically decreasing amount of new oil each year, despite all the people who hype each new discovery as the answer), how much of the globe has been mapped for oil (the vast majority) and estimate likelihoods. And also, we can do the math showing current rates of decline (most of the major producers are declining significantly), and look at how much oil we’d need to find in order to put off the problem. The answer is “a hell of a lot” – that is, as Matthew Simmons put it, even if we found a massive oil field, as big as the North Sea, for example, it would only delay the whole world’s oil peak by a matter of months.

The next question would be how well the predictions, model and data match up with what we’re actually seeing right now. For example, in regards to peak oil, while we don’t know with certainty whether or not the Saudi giant oil fields have actually peaked, we can look and see what is actually happening in the world. Some Saudi authorities claim that the peak is a long way out, others that it is very near (many oil company executives now openly admit peak oil). What we did see was that during the period of record high oil prices in 2008, the Saudis were unable to increase production as much as one would have expected, given the powerful incentive of $100+ oil – their claim was that they didn’t want to, but this seems unlikely at best ;-). So far, peak oil theory best fits the facts.

The same is true with climate change theory. For example, climate change dissenters often argue that the sun is sending more heat our way. But if that were true, we’d be seeing more warming in the upper atmosphere as well as closer to the earth. But in fact, the opposite is true – the upper atmosphere is cooler. Since the sun’s rays have to go through the upper atmosphere to get to the earth, that’s not consistent. But if the earth itself is trapping carbon and increasing heat, it would make sense that we would find the upper atmosphere cooler than the lower.

The correlation of man-made C02 levels with planetary warming is another place we can see the evidence of global warming. The ice reductions in the arctic, and the thinning of the edges of the Greenland and Antarctic ice sheets are another.

That is not to say that there is no inconsistency in climate systems – we are talking about a large, enormously complex system, being modeled by thousands of researchers. It is not an easy thing to figure out, and not every bit of data is going to be perfect. But the overwhelming reality is that the story here fits the data extremely well – the account of anthropogenic global warming fits what we are seeing – if anything, we have tended to underestimate our impact.

We can also see the evidence of our own eyes in both cases – we can see the rise in food prices, gas prices, the warming of our regions, the changes in planting zones and snowfall, the increased frequence of drought. These are not sufficient evidence – any one year, any one locality can be explained. But there is no doubt that billions of people around the world are seeing these things, and that our vision is a small piece of the picture.

Going back, for a moment, to _The Limits to Growth_, one of the things that appears a lot in later modeling, in, for example, the 30 Year Update of TLTG, is that feedback loops and intersections are a bigger problem than any individual problem. And for those people wondering whether these problems are really as bad as they think they are, this is probably the most important thing to know – in the 1970s, we were worried about individual problems – a shortage of oil, for example, or about pollution, or a coming ice age. Right now, the biggest concern we have is of the intersection of inter-related problems. That is, the problem is not our ability to respond to one problem, but our ability to respond to multiple, overwhelming simultaneous crises.

_The Limits to Growth: The Thirty Year Update_ found that almost all its “business as usual” scenarios led to collapse , *EVEN IF* the sheer quantities of resources available were *DOUBLED* over what we have any evidence at all for – that is, even if we had enough energy to go along, pollution built and cancer rates skyrocketed, while soil erosion rose to make food production fail to keep pace with population growth. That is, these scenarios don’t depend on a shortage or crisis in any single place – they operate as a system of feedback loops influencing one another. As the authors put it,

“A second lesson is that the more successfully society puts off its limits through economic and technical adaptations, the more likely it is to run into several of them at the same time. In most World3 runs, including many we have not shown here, the world system does not totally run out of land or food or resources or pollution absorption capability. What it runs out of is the ability to cope.” (TLG30, 223)

In the 1970s, environmental activists were responding to the very first warning signs of depletion and climate change. Many of them interpreted scientific warnings on these points to mean that we were facing an immediate, definite crisis down to the particulars. But that’s not what they were being told. Instead, people were being warned about the longer term consequences of their actions in no uncertain terms. And in fact, our ability to cope managed to push these issues off, in many cases for decades, but again, as we put our limits further off, we drew our resources down further. Soon, the bill comes due.

Now this is all a fairly compelling case, but it isn’t all the truth that ever was, and anyone who tells you otherwise is lying. That is, there is absolutely no point in exaggerating scientific evidence to pretend we know everything with perfect, utter certainty. So my next post will be about the question of how we use this data – that is, if we think the odds are strongly in favor of something, but we don’t have perfect certainty, how do we know what to do? There are logical tools for that, and my next post on this subject will discuss them.

Sharon

Comments

  1. #1 Glenn
    March 4, 2010

    I was in high school during the 1970’s oil crisis in the U.S. It was, as you said, Peak Oil for U.S. extraction, combined with geopolitical factors. In addition, I have reason to think there was some market manipulation and price gouging on the part of the oil companies.
    We lived in the People’s Republic of Berzerkley at the time, with a lovely view of San Francisco Bay from my mother’s house; in addition I used to sail regularly on the bay. During the entire period of long gas lines, alternate day fueling and high prices, I noticed the anchored tankers in the Bay.
    In normal times, a few tankers would come in, moor to the refinery’s piers at Richmond, and unload. Now there were over a dozen tankers, fully laden, out in the anchorages, and none unloading at the piers. It made me think that perhaps the oil companies were deliberately keeping oil off the market to drive prices up still further. Certainly U.S. oil companies got a lot of favourable concessions from the Feds after that, including drilling the North Slope and selling it over seas.

    Glenn

  2. #2 darwinsdog
    March 4, 2010

    “In the 1970s, environmental activists were responding to the very first warning signs of depletion and climate change.”

    The “very first” warning signs of depletion and climate change occurred towards the end of the Pleistocene, as the world’s megafauna – especially that of Australia & the Americas – was hunted to extinction and the climate entered a glacial interstadial. The people of that time may not have recognized the signs but we certainly can in retrospect. To those accustomed to thinking in terms of ecological, evolutionary, and geological time, years and decades are irrelevant. Environmental degradation is occurring at a rate and magnitude that undermines the resource base of human civilization and survival of not just humans but a very significant proportion of the world’s biotia. Whether the full impact of this degradation is felt within our lifetimes, the lifetimes of our children and grandchildren, or a few centuries down the line, is also irrelevant. The uncoupling of biogeochemical cycles, the collapse of ecosystems, and the mass extinction of species are all in process, whether the process is measured in years, decades, centuries, or a few millenia. In saying this I am not “exaggerating the scientific evidence” and I do say it with “perfect, utter certainty.” The only uncertainty is the rate, to two or three orders of magnitude, at which collapse takes place. Over ecological or evolutionary time, these few orders are utterly insignificant. It will appear instantaneous in the fossil record.

  3. #3 cass_m
    March 4, 2010

    Great post. Thanks for being so clear and concise and (to me) unbiased.

  4. #4 Matt Springer
    March 4, 2010

    “The peak of oil production occurs at the moment that we have used ½ of the oil in the ground.”

    Not necessarily, if I may quibble a bit. It could happen quite a bit earlier or later than the 1/2 mark. It’s a question of the relative difficulty of extraction of oils in different locations. If, for instance the first 90% were easy to extract and the last 10% were difficult, peak oil might not occur until a much greater fraction of the total reserves were used.

    That’s just being picky though, your overall point is fine.

  5. #5 Robert Ballantyne
    March 4, 2010

    I really enjoyed the article. Thanks. I have only one small point to make…

    There were several comments about what scientists believe. I think that it is important not to care what scientists believe. The fact that every scientist has beliefs does not cause any of those beliefs to be scientific. Everyone copes with a world that is very complex by developing personal beliefs. While it may be useful and even instructive to learn the beliefs of the people close to us, reading what someone thinks might be the belief of an individual scientist, or even a group of scientists, might be interesting, but should not be informative. Just because a scientist might or might not believe something does not make that something become ‘scientific knowledge.’ Not everything that a scientist does is science. The fact that a scientist believes this or that does not make that belief scientific.

    Science provides a method of interpreting data. It is scientific to learn about the data, and so is learning about how those data are being interpreted (what is the current hypothesis). For instance, nowadays it is probably true to say that most scientists who are familiar with the data subscribe to the hypothesis of global warming. Do they believe it? As a form of shorthand, some might answer, ‘Yes.’ However, were new information to be found that does not support it, a real scientist would be quick to embrace the new theory that explains the then current body of data. In science, any hypothesis is expendable. People seldom change their beliefs.

    Rather than examining the beliefs of scientists, it is more compelling to look and the data and try to understand the current theories. If we care about these issues it is really lazy-thinking to ask what so-and-so believes and be satisfied that that is all that needs to learned.

  6. #6 Anon
    March 4, 2010

    You may be interested in the article “Peak Oil as a Behavioral Problem” (Grant, 2007, Behavior and Social Issues, 16, 1: pp 65-88)

    From a behavioral perspective, this is an “avoidance” problem; we are working to prevent an aversive event. Problem is, although it is easy to teach avoidance by beginning with “escape” (working to be rid of a present aversive event), peak oil is a one-time phenomenon. We get no practice run.

    The article discusses a number of other characteristics of this particular apocalypse, from the standpoint of what we know, empirically, about how we learn. It is a very sobering prospect.

  7. #7 GERALD SPEZIO
    March 4, 2010

    HERE IS THE ANTITHESIS OF PEAK OIL THEORY BASED ON SUPPLY – OR RESERVES RUNNING OUT.

    Saudis fear A LACK OF DEMAND – read DEMAND!

    Saudi Arabia Preparing For Oil Demand To Peak

    By Tarek El Tablawy

    23 February, 2010
    Associated Press

    JEDDAH, Saudi Arabia, 15 February, 2010 — A top Saudi energy official expressed serious concern Monday that world oil demand could peak in the next decade and said his country was preparing for that eventuality by diversifying its economic base.

    Mohammed al-Sabban, lead climate talks negotiator, said the country with the world’s largest proven reserves of conventional crude is working to become the top exporter of energy, including alternative forms such as solar power.

    Saudi Arabia was among the most vocal opponents of proposals during the climate change talks in Copenhagen. And al-Sabban criticized what he described as efforts by developed nations to adopt policies biased against oil producers through the imposition of taxes on refined petroleum products while offering huge subsidies for coal — a key industry for the United States.

    Al-Sabban said the potential that world oil demand had peaked, or would peak soon, was an “alarm that we need to take more seriously” as Saudi charts a course for greater economic diversification.

    “We cannot stay put and say ‘well, this is something that will happen anyway,” al-Sabban said at the Jeddah Economic Forum. The “world cannot wait for us before we are forced to adapt to the reality of lower and lower oil revenues,” he added later.

    Some experts have argued that demand for oil, the chief export for Saudi Arabia and the vast majority of other Gulf Arab nations, has already peaked. Others say consumption will plateau soon, particularly in developed nations that are pushing for greater reliance on renewable energy sources.

    With oil demand only now starting to pick up after it was pummeled by the global recession, some analysts say consumers may have learned to live permanently with a lower level of consumption.

    The Organization of the Petroleum Exporting Countries, as well as other international energy organizations, is forecasting a slight rise in oil demand this year, based mainly on increased consumption in Asia after last year’s sharp hit.

    Either peak oil scenario presents grave challenges for the Gulf region and OPEC, whose countries rely on oil sales for as much as 90 percent of their budgets.

    Al-Sabban, who also serves as the chief economic adviser to Saudi Oil Minister Ali Naimi, said an oil demand peak would be “very serious” for the country.

    Saudi has about 264 billion barrels of crude reserves and currently produces about 8 million barrels per day out of its overall output capacity of around 12 million barrels per day.

    The kingdom, widely seen as the de facto leader of the 12-member OPEC, has embraced an ambitious expenditure program aimed not only at further developing its oil base but also expanding and diversifying its economic base.

    Its expansionary policies came even as other nations were tightening purse strings in response to the world’s worst financial crisis in over six decades. The outlays included billions of dollars for a new research university that opened last year, as well as major ventures such as the construction of new economic cities and other infrastructure.

    Oil’s pre-recession price boom also helped pad Saudi Arabia’s foreign reserves, now in excess of $400 billion, and have helped the government weather the worst of the global crisis.

    International ratings agency Moody’s, in a reflection of the country’s macroeconomic position, on Monday upgraded Saudi Arabia’s foreign and local currency government ratings to Aa3 from A1 citing “the continued solid state of government finances which have largely withstood oil price volatility and the global economic crisis.”

    Al-Sabban said that along with investing in education and economic diversification, Saudi must ensure that it become the top energy exporter, including in solar power, to keep moving forward.

    The country recently launched its first solar-powered desalination plant and al-Sabban said oil giant Saudi Aramco was working on a pilot project to inject carbon emissions back into wells to help boost output. The carbon sequestration project, which he said would be operational by 2012, was a sign of Saudi Arabia’s commitment to environmentally sound energy development.

    The push for cleaner technology is pivotal for the oil rich kingdom.

  8. #8 mike
    March 4, 2010

    Only a few climate scientists promulgated the “earth is freezing” view in the 70s although it got big NEWSWEEK play. The vast majority of climate scientists at the time were already talking climate warming, not icing.

  9. #9 Paul
    March 4, 2010

    Whether the full impact of this degradation is felt within our lifetimes, the lifetimes of our children and grandchildren, or a few centuries down the line, is also irrelevant.

    It’s totally relevant to the people involved. It’s also totally relevant to how much time people have to try to mitigate and if possible reverse the effects.

  10. #10 Jonsi
    March 5, 2010

    @GERALD SPEZIO

    Of course the Saudis fear a lack of demand. That is perfectly consistent with supply based peak oil theory. Prices spike = recession. Demand in foreign developed countries drops. Less revenue and significantly less profits, because their subsidized domestic market continues to grow, cannibalizing their export market. When the global economy slightly recovers, their lucrative export market has decreased and their unprofitable domestic market has increased. Less revenue, less profits. So either they can raise domestic prices (or ease subsidies) — but that would cause riots — or they can panic about ways to diversify their economy. That is entirely consistent with supply limited peak oil. It is actually one of the geopolitical issues that underpins the risk to the US: we have “better” companies, better technologies, better employees, and better industry practices, but we might not have geopolitical access to those resources. And even if we did, building the infrastructure to export it back to the US might be too uneconomical to justify the investment, so it has to be sold on the world market and can’t be counted on for our supply. At some point, domestic markets will cannibalize their entire export market, which will completely destabilize those regions. Without a diverse economy, they are likely more toast than us; it just might not feel like as far as a crash for most of them.

  11. #11 Dunc
    March 5, 2010

    I look at the date it was written and think, see? They’ve been saying this for ages – and it hasn’t happened.

    I think this is the real crux of the problem – 30 years isn’t really a long time at all. It’s a mere third (or so) of a human lifetime. So many people seem to have an absurdly foreshortened view of history…

  12. #12 darwinsdog
    March 5, 2010

    It’s totally relevant to the people involved. It’s also totally relevant to how much time people have to try to mitigate and if possible reverse the effects.

    I’m involved and I say that the exact timing is totally irrelevant. Don’t deign to speak for anyone but yourself, Paul.

    There’s nothing that can be done to mitigate the consequences of anthropogenic mass extinction. Positive feedbacks have long since been triggered and it isn’t humanly possible to reverse them, especially not with orbital forcing potentiating climatic warming due to the anthropogenic emission oh high heat capacity gasses. You may as well attempt to “mitigate” your own mortality as try to avert the situation the biosphere faces.

  13. #13 Eric
    March 5, 2010

    Is there a membrane for CO2 the way there is for salt in water? If so – can that be used to capture CO2.

    And if it can’t – what about creating charcoal from organic matter? Plants capture CO2 as part of living, when the volatiles are burned out of the plants – we’re just left with relatively inert charcoal. This can be mixed with various microbes and nutrients to create terra preta or it can be buried; either way, carbon is out of the atmospheric carbon cycle and thus can’t contribute to AGW.

    If we can revamp agricultural processes to convert decomposable matter to inert carbon – we’ll come out ahead on things.

  14. #14 Alex
    March 7, 2010

    @Sharon: A very interesting post. Very informative. Please, keep making others.

  15. #15 Tim Bartik
    March 7, 2010

    Sharon:

    What I would be interested in hearing addressed is why you think “peak oil” poses a crisis for our economic system of the same magnitude as climate change.

    As an economist, my perspective would be that peak oil is a problem that can be dealt with in a decentralized competitive economy via changes in oil prices. If there is a shortage of oil, the price goes up, which induces a great deal of behavioral changes with respect to both oil supply and demand. Prices would appear to provide the right signals. And the evidence suggests that long-run demand and supply will adjust extensively to price changes, if those price changes are large enough.

    In contrast, climate change is a clear case in which the global warming effects of CO2 emissions are unpriced damages from various economic activities. There is no way a decentralized price system without some government intervention can deal with that problem. The economy will only be able to adequately deal with this problem if there is some government intervention such as cap and trade, a tax on CO2 emissions, or government regulations to control CO2 emissions. This government intervention forces the damages from CO2 emissions to be appropriately priced, which they will not be in a competitive economy without policy intervention.

    In sum, from an economist’s perspective, peak oil and climate change are two completely different types of problems. In the peak oil case, the price signals seem likely to be right even without government intervention, whereas in the climate change case, government intervention is required to get the prices right.

  16. #16 Zuska
    March 7, 2010

    @Gerald Spezio #7:
    Pasting a whole AP article into a blog comment is rude and probably violates copyright. In general, you should quote a few sentences or give a brief synopsis to let people know why they should read and then give a link to the original source of the story. Sharon, you may not want to leave a whole AP story in a comment on your blog.

  17. #17 Sharon Astyk
    March 9, 2010

    Tim, that’s a question with a longer answer than I can deal with in comments or while in transit and between engagements. Would you mind if I address it in a post in the next few weeks? The short answer is that were we having this conversation in 1979, your description of the energy depletion issue might well be quite accurate, but time is a factor. The US DOE commissioned the Hirsch Report to answer just this question, and its suggestion was that for a stable transition we needed two decades before the expected price volatility and other elements emerged – but there’s some evidence they are here now.

    But that’s by no means a complete answer – more soon.

    Sharon

  18. #18 orjin
    March 10, 2010

    In contrast, climate change is a clear case in which the global warming effects of CO2 emissions are unpriced damages from various economic activities.

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