Firstly - the title. Monbiot says 'we', but he's always been on the sceptical side of the Peak Oil discussion, as he is much more concerned about global warming. For me it's the other way around - I think the science is demonstrably stronger for Peak Oil than for global warming (to be precise: than for Catastrophic Anthropogenic Global Warming - CAGW) to the extent that the real world is living out what Peakists predicted, but not what CAGWists predicted...but I'll come on to that.
The facts have changed, now we must change too. For the past 10 years an unlikely coalition of geologists, oil drillers, bankers, military strategists and environmentalists has been warning that peak oil – the decline of global supplies – is just around the corner. We had some strong reasons for doing so: production had slowed, the price had risen sharply, depletion was widespread and appeared to be escalating. The first of the great resource crunches seemed about to strike.
OK, good first sentence, agree with that.
It's been around for much longer than ten years - as Monbiot accepts later on.
The reasons for this, however, are not primarily the ones that Monbiot lists - indeed, the fact that he thinks Peak Oil is adequately justified for these shallow reasons simply indicates his failure to engage with the fundamentals. Peak Oil is the observation (not a theory) that every oil field ever discovered is finite; further, the flow of oil from almost every oil field rises and declines; and that there are only a certain number of oil fields available in a finite world - so therefore the flow of oil available to the world will itself rise and decline. It's extremely simple, and has been observed repeatedly in a wide variety of locations. The overwhelming majority of oil-producing countries in the world have passed their own local peaks. I could go on...
The first of the great resource crunches has struck - how else to describe the increase in the cost of oil by an order of magnitude? In the 1990's oil was hovering between $10 and $15 a barrel - it has now 'come down' to around $100 a barrel from a peak of near $150. Clearly this is because Peak Oil is not a problem...Peak Oil might be simply summarised as 'first it gets expensive, then it gets scarce'. We have emphatically reached the first phase.
Among environmentalists it was never clear, even to ourselves, whether or not we wanted it to happen. It had the potential both to shock the world into economic transformation, averting future catastrophes, and to generate catastrophes of its own, including a shift into even more damaging technologies, such as biofuels and petrol made from coal. Even so, peak oil was a powerful lever. Governments, businesses and voters who seemed impervious to the moral case for cutting the use of fossil fuels might, we hoped, respond to the economic case.
Oh George...'wanted it to happen'. One of the things about Peak Oil is that our wants don't have a very great deal to do with it. Reality is non-negotiable - and it seems straightforward to me that we are indeed living through a situation that has shocked the world into economic transformation (yes, finance is a major aspect - see The Automatic Earth - but as James Hamilton has demonstrated, the oil price triggers recessions).
As for governments responding... who is to say they haven't been?
Some of us made vague predictions, others were more specific. In all cases we were wrong. In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995. In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010. In 2003 the geophysicist Kenneth Deffeyes said he was "99% confident" that peak oil would occur in 2004. In 2004, the Texas tycoon T Boone Pickens predicted that "never again will we pump more than 82m barrels" per day of liquid fuels. (Average daily supply in May 2012 was 91m.) In 2005 the investment banker Matthew Simmons maintained that "Saudi Arabia … cannot materially grow its oil production". (Since then its output has risen from 9m barrels a day to 10m, and it has another 1.5m in spare capacity.)
Good, some specifics.
Hubbert's prediction was based on business continuing as usual - and the OPEC crisis of the 1970's, which caused a drop in oil production - ie it left the oil in the ground - simply delayed things for ten years. So far his prediction is holding up pretty well (as, it could well be argued, are those of Campbell, Deffeyes and even Pickens).
The key claim in Monbiot's article, however, is this: 'average daily supply in May 2012 was 91m'. This is what is called 'all liquids' production - and this is not what Peak Oil is about (see discussion here looking at the US). For example, 'all liquids' includes ethanol production - you know George, it's that stuff which Obama subsidises in order to transfer food from the third world into the petrol tanks of his target voters. Ethanol is not just evil, it is also a waste of energy (it uses up more energy to make it than you get out of it, in the US). To include ethanol - and bio-fuels, and even tar sands (slightly more debatable) - in discussions of Peak Oil is simply to confuse the issue, and, again, betrays a lack of understanding of the fundamentals. If we use the baseline consistent measure - called 'crude and condensate' - then we get a very different picture. Since 2005 production of C&C has remained stuck on a plateau of approximately 74 million barrels a day - and this despite the vast fortunes that are now being made for any new supplies that are coming on stream.
(Source: Stuart Staniford and see his commentary on it)
Now, as it happens, I think it perfectly possible that there will be another minor uptick in C&C production - perhaps we will get up to, say 76 mbpd (if that happens it'll be because more is coming through from Iraq) - but any calm assessment of the numbers can only lead to the conclusion that we are currently at the top of the fairground ride, and that the only significant likely move is going to be downwards from now on. How steep that ride down becomes is the only interesting - and frightening - question.
Lastly on this paragraph, Matt Simmons was right (emphasis upon the 'materially').
Peak oil hasn't happened, and it's unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun. The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that. Maugeri's analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is "the largest potential addition to the world's oil supply capacity since the 1980s". The investments required to make this boom happen depend on a long-term price of $70 a barrel – the current cost of Brent crude is $95. Money is now flooding into new oil: a trillion dollars has been spent in the past two years; a record $600bn is lined up for 2012.
Peak Oil has happened in the vast majority of countries already, and is pretty much certainly happening for the world now (clue: look at the oil price).
The Maugeri report is discussed in detail at the OilDrum here.
The constraints on supply do include financial ones - but these have also been discussed exhaustively, especially by Matt Simmons (as you'd expect).
The biggest problem with the Maugeri report - and with Monbiot's blithe transmission of such propaganda - is the confusion between production capacity and actual production. As the Peak Oil cliche has it - if someone puts a million pounds in your bank account, but restricts the amount you can take out to £50 a week - are you now rich?
So why is this propaganda? Because the oil companies have a vested interest in preserving their share price, and if investors woke up to the fact that they were massively declining assets, they would bail out quick - and people would lose money. It's much cheaper to fund 'research' that preserves the illusion for a little longer. Apres nous la deluge and all that.
The country in which production is likely to rise most is Iraq, into which multinational companies are now sinking their money, and their claws. But the bigger surprise is that the other great boom is likely to happen in the US. Hubbert's peak, the famous bell-shaped graph depicting the rise and fall of American oil, is set to become Hubbert's Rollercoaster. Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn't flow naturally. There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 in January.
Yes, Iraq is the great white hope of the oil industry - at least the Western oil industry - that is why there was a war to secure the supplies. There could even be as much as a potential 10mbpd available from Iraq - given peace and prosperity. The only question is whether that peace and prosperity will arrive in time to offset the declines from all the other countries where oil is already in decline - like the UK.
The American situation is short-term. After the 1970s it became more profitable (and easier in terms of regulations) for the oil companies to move away from the US to develop oil. That meant that there were some 'easy gains' left behind - because there were some even easier gains abroad. The uptick we're seeing now is the claiming of those easy gains (and ANWR and near-offshore will also help in the medium term). But the underlying dynamic hasn't changed. As for the Bakken containing as much oil as Saudi Arabia, there are few comments which reveal ignorance of the subject so completely. It's like saying that a field of unharvested grapes contains as much wine as a particular barrel of Chateau Lafite - what is omitted is much more important than what is said. In this case, it is the cost of extracting oil from the Bakken (finanical and in energy terms) that is the most important element (see the OilDrum article for commentary).
We have confused threats to the living planet with threats to industrial civilisation. They are not, in the first instance, the same thing. Industry and consumer capitalism, powered by abundant oil supplies, are more resilient than many of the natural systems they threaten. The great profusion of life in the past – fossilised in the form of flammable carbon – now jeopardises the great profusion of life in the present. There is enough oil in the ground to deep-fry the lot of us, and no obvious means to prevail upon governments and industry to leave it in the ground. Twenty years of efforts to prevent climate breakdown through moral persuasion have failed, with the collapse of the multilateral process at Rio de Janeiro last month. The world's most powerful nation is again becoming an oil state, and if the political transformation of its northern neighbour is anything to go by, the results will not be pretty. Humanity seems to be like the girl in Guillermo del Toro's masterpiece Pan's Labyrinth: she knows that if she eats the exquisite feast laid out in front of her, she too will be consumed, but she cannot help herself. I don't like raising problems when I cannot see a solution. But right now I'm not sure how I can look my children in the eyes.
Um... despite disagreeing with what went earlier, it does seem as if George is starting to climb the Dark Mountain. At last.
The thing about Peak Oil - and I haven't even touched on some of the worst aspects of it, eg the Export Land Model - is that it is only the presenting symptom of a much larger crisis, that of the End of Growth. There remains much to be done. For a Christian perspective on all of this - exploring the spiritual roots of how we have come to be where we are and how to get out of it - see my book.