Peak oil’s slippery slope

Both President George W. Bush and Vice President Dick Cheney, when questioned about their subterranean public-approval ratings, have repeatedly asserted their administration will be vindicated by history. After you’re done guffawing, consider this: They just might be right.

Why? In a phrase, peak oil.

For those unfamiliar with peak oil—and here I include Gov. Arnold Schwarzenegger, most of the state Legislature and even the California Energy Commission—it is derived from the geological phenomenon of oil-field depletion, first elaborated on in 1956 by M. King Hubbert, then a geophysicist for Shell Oil. Simply put, peak-oil theory asserts that for any given oil field, there is a finite amount of recoverable oil. When half of that oil is used up, the field has reached its peak. Thereafter, production begins declining to near-zero. This principle, Hubbert claimed, applies to all oil fields, individually and in the aggregate.

Petroleum-industry scientists initially pooh-poohed peak oil, but Hubbert was later validated when, in the 1960s, he successfully predicted the U.S. domestic-oil supply would peak in 1970. It didn’t take long for the Organization of the Petroleum Exporting Countries, OPEC, comprised of oil-rich nations such as Saudi Arabia, Iraq, Iran and Venezuela, to figure out the United States was vulnerable, thanks to its ever-increasing demand for imported oil. Angered by the U.S. military aid provided to Israel in the 1973 Yom Kippur War, OPEC ceased shipping oil to the United States, creating the 1973 energy crisis.

Some of us are old enough to remember waiting in mile-long lines to pay ever-increasing prices for gasoline in the 1970s. In 2008 dollars, the price peaked at $3.29 per gallon in 1981. But as suddenly as it began, the energy crisis dissipated. For the next two decades, prices declined, thanks primarily to the financial needs of the Middle East’s pampered princes, who prefer the casinos of Monaco, luxury yachts and lavish palaces to the welfare of their own citizens.

However, peak oil never went away. Its proponents kept watch as growing world demand for petroleum, particularly from developing nations such as China and India, steadily drained the available known reserves. Canada and Mexico have crossed their peaks, and could soon cease exporting oil to the United States in order to meet domestic demand. New discoveries of large, so-called elephant oil fields have disappeared entirely.

As a growing number of scientists jumped on the peak-oil bandwagon, petroleum prices began rising in 2000. In 2006, the price per gallon for gasoline in California eclipsed the record set in 1981. Earlier this year, petroleum crossed the $100 per barrel threshold; some Californians are now paying as much as $4 per gallon for gasoline. Heading into the summer driving season, it’s only going to get worse—and if we truly have crossed the peak, it’s never going to get better. The era of “cheap oil” will be over; both countries and individual consumers will pay an increasing share of their incomes on energy—all forms of energy, since they’re pegged to oil.

Politicians and the petroleum industry have tended to blame rising prices on a lack of refining capacity. Consumer advocates blame oil-company profit-gouging for the increases. Both explanations are partially correct, but do little to explain the volatility that has recently characterized the market. The larger reality is contained in recent projections by Exxon, which announced earlier this month that it expects petroleum production to remain flat through 2012, because oil from the Middle East hasn’t been able to make up for a 37-percent drop in petroleum supplied from the United States and Europe since 2000.

Translation: If the Saudis can’t keep up the flow, peak oil may already be here, now.

Forget about rising sea levels. The advent of peak oil will make global warming seem like a day at the beach. Petroleum doesn’t just fuel our automobiles, it’s in everything, from fertilizer to pharmaceuticals to food products. Since the beginning of the oil age in the mid-19th century, the world’s population has grown from slightly less than 1 billion to more than 6 billion today. This simply couldn’t have happened without oil, and in petroleum’s absence, the world, including the United States, is facing a dramatic decrease in the number of its human inhabitants.

With such dire potential consequences, you’d think our elected officials would at least acknowledge the risk. But at the federal level, the Government Accountability Office reports remain woefully unprepared for peak oil, which it describes as “inevitable.” Schwarzenegger pays occasional lip service to increasing the fuel efficiency of automobiles, even as he balances the budget by cutting mass-transit funds. Peak oil is not mentioned once in the California Energy Commission’s 250-page Integrated Energy Report released last year.

Astounding.

Fortunately, future American heroes George Bush and Dick Cheney have their eyes on the prize: the oil fields of Iraq and Iran, which together have about the same amount as Saudi Arabia, whom we’ve already bought off. Together, the three countries have half of the world’s remaining petroleum supply. They’re also believed to be at or near their own peaks. Nevertheless, taking control of their reserves will keep those Hummers rolling until the realities of peak oil sink in. Who cares about a little genocide when there are pockets to line and gas tanks to fill?