Well now, it's only going to get worse

The world’s oil woes were on show again recently when the Paris-based International Energy Agency (IEA) announced that it was tapping member countries’ emergency reserves—some 60 million barrels over 30 days—for only the third time since the IEA was founded in 1974, to fill the gap in supplies left by the disruption to Libya’s output.

In a similar display earlier in June, President Barack Obama disappointed environmentalists with news that he was directing his administration to ramp up US oil production and opening up pristine Alaskan drilling grounds in an effort to curb rising fuel prices.

Both events have been criticised for being politically motivated and speak of a rising panic about the world’s dependence on oil, a resource that is under threat not only from political unrest in oil producing countries like Libya, but also because of dwindling supplies.

Dr Gary Kendall of the Cambridge Programme for Sustainability Leadership (CPSL) South African office and author of the book Plugged In: The End of the Oil Age says that currently the world is consuming the equivalent of all of America’s proven oil reserves every 11 months, or about 84-million barrels of oil a day. Production is already struggling to keep pace with demand so any disruption is potentially disastrous. The situation is exacerbated by the fact that most of the easy-to-extract oil has already been burned.
What remains is generally difficult to access with concomitant risks and costs associated with extracting it.

“With last year’s BP disaster in the Gulf of Mexico we have already seen the risks of deep sea water production,” says Kendall. “This is what the end of the oil age looks like—it’s only becoming more challenging and expensive economically, socially and environmentally. What’s more, it leads us further away from the primary objective of creating a secure, highly efficient, low-carbon energy system that is needed to avoid dangerous interference with earth’s climate system.”

Kendall believes that the only rational response to this situation is to wean the world off liquid transport fuels, but concedes that letting the age of oil draw to a graceful conclusion is incredibly difficult in the face of powerful vested interests.

Speaking at a seminar organised by CPSL in Cape Town recently, Kendall and colleague David Rice, an independent advisor on the social and environmental impacts of business, pointed out that the world’s transportation systems—enabling the movement of people and goods that underpins virtually all economic activity is 95% dependent on oil.

“Expressed as gross domestic product—the market value of all goods and services produced—it is difficult to envisage economic activity taking place to any great extent without people and things moving around,” says Kendall. “Whether it’s raw materials being hauled from the point of extraction to a processing plant, customers accessing goods, or employees getting to and from their places of work, very little of our globalised economic system functions without motorised transport—and most of that is powered by oil.”

Kendall and Rice say that there are three responses available to world governments grappling with the twin threats of energy security and climate change.

The first is to decarbonise energy supplies, which rules out developing alternative hydrocarbon fuels such as turning coal and natural gas into diesel, or tar sands into synthetic crude oil. Biofuels may be workable in certain sweet spots around the world, though done badly they can be more socially and environmentally harmful than the oil they are intended to replace. The only truly low carbon sustainable energy options—such as wind and solar power—generate electricity, not liquid transport fuels.

Option two, we could use our resources more efficiently, both on demand and supply side, and thirdly we could eliminate demand for the services we obtain from oil. This would include reducing mobility needs through improved urban planning and changing behaviour, encouraging a shift away from personal mobility to mass transit, for instance.

A critical enabler towards a secure, efficient, sustainable energy system lies in shifting the transport sector away from its dependence on a single energy source oil through electrification. Electricity offers greater energy efficiency and is also the only energy source that has the potential to come from renewable and diversified resources. It is the only solution in fact that transcends the supply problem.

Countries like China are ahead of the game—the government there is aggressively promoting electrification of the transport sector as a strategic priority. By way of example, China already has 120 million electric bicycles on the road.

This demonstrates that weaning the world off oil is achievable. And, when you take into account the geopolitical implications and geological constraints of oil production - to say nothing of the social and environmental impacts—persevering in oil dependency makes very little sense.

Kendall has the clincher.

“Anyone doubting the importance of liquid transport fuel to the health of the prevailing economic system - and therefore to maintaining social cohesion and political stability - need only recall what happened in the UK in September 2000,” he says.

“Truckers and farmers protesting the relatively high pump price of diesel staged blockades of refineries and fuel terminals. Diesel and petrol supplies slowed to a trickle as the public queued at forecourts to top up their tanks ‘just in case’. Within a few days, 90% of filling stations were bone dry, just-in-time supply chains unravelled and people were fighting over loaves of bread among bare supermarket shelves. The UK had staged a compelling, if entirely accidental, social experiment which illustrated for us that five days of petroleum supply separates an advanced civilization from savagery.”

So, when US Treasury Secretary, Timothy Geithner, in defending his decision to release reserves said: “high oil prices have put significant pressure on global growth”, he was not lying.

The dependence on oil is indeed threatening not only the economy, but the very fabric of society and the planet. The question that governments should be grappling with is not “where can we find more oil?” but “how can we take active steps to end this addiction before it ends us?”

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