Peak oil: Should I be worried?

Imagine one of those fine hotel buffets, with lots of food and places to sit, drinks to order and generally a good old time is being had by all. You’ve probably been there. Imagine the people just keep streaming into the restaurant steadily and the food just keeps being renewed, replaced, new tables get set up outside, upstairs and everything just keeps getting bigger and better. More people, more tables, more food, more eating, more waiters, more drinks.

This is how many people have experienced the world in the last century, myself included.
Now imagine the hotel is a closed system — there is nothing beyond the hotel building except the vacuum of outer space. The food stocks in the pantry are large, but finite. At some point, the kitchen cannot keep pumping out food to keep pace with the people streaming into the restaurant, no matter how many cooks and extra pots you shove into the kitchen. There is still food in the pantry and there is still food being cooked and served but the rate at which this happens is less than the rate at which people want to eat. And so there is a disjunction between supply and demand.

Peak oil is not about suddenly having no power and no goods — it’s about having less and working harder to get that smaller amount. Enter EROEI — energy return on energy invested. The original large oil reservoirs exploited in the first half of the 20th century had EROEI of over 100:1. That means for every joule of energy you spent digging, drilling, processing and transporting you got more than 100 joules in return. It’s a bit like working for one hour and being paid enough money to cover your expenses for 100 hours. The easy life!

EROEI on oil shales, tar sands, deep oil and other remaining oil-like resources is less than 10:1 and even down at levels like 3:1 or worse. The results of this are that high-energy activities or products are going to go up in price, substantially. Think of flying, cement, aluminium, cars, hi-tech gadgetry, imported goods and virtually everything we take for granted in the average suburban Westernised existence.

Thought Leader