Our century-old industrial civilization and its luxurious standard of living may be about to end. The energy prime mover of this civilization, oil, is about to drastically dwindle in supply.
This dwindling oil supply in the face of escalating demand has rocketed up the price of oil. Ted Trainer (1997) predicted large and permanent increases in oil prices after the year 2000 due to increasing scarcity. In fact in March 2008, oil broke through the psychological ceiling of $100 a barrel, and later in early June rose to around $140 on the way to $150. Even the president of OPEC (Organization of Petroleum Exporting Countries) has warned of oil reaching $200 a barrel (Robertson, 2008). Goldman Sachs has announced that the $200 barrier could be hit any time within the next two years (Foroohar, 2008). Alexey Miller, head of the world’s largest energy company, the Kremlin-owned gas giant Gazprom, has predicted that oil will reach $250 a barrel “in the foreseeable future” (Fortson, 2008). Ferris-Lay (2008) has forecast that the black liquid gold could climb to an incredible $300 a barrel in the foreseeable future. In the slightly longer term we have been warned of an economically lethal price of $380 (Porter, 2005). The major cause for all these price hikes is the dwindling supplies as oil reaches exhaustion point around the world.
In this paper we will consider the implications of the dwindling supply of oil in light of the Olduvai Theory.
History, current changing world circumstances and dwindling energy-resource supplies suggest that the oil-fired industrial age is destined to be short lived. The bell curve below shows the levels of historic and prospective oil production over two millennia. This graph highlights the assertion that the life expectancy of Industrial Civilization is around 100 years – from 1930 to 2030 (Duncan, 2000; Rempel).
It has been the plentiful supply of cheap oil (increasingly from less developed countries) that was the main factor, along with the necessary natural resources and skilled manpower, that made the miracle of the industrial era, of about 100 years, possible in the Western more developed countries, and particularly in Europe and the United States.
However, the plentiful supply of cheap oil has been short lived. Even as predicted by Dr. M. King Hubbert’s bell curve method, the peak for oil production in the United States was reached way back in 1970. This “Peak Oil” method began with Hubbert, a Shell Oil geophysicist who determined that when an oil field was half depleted, it had hit peak production and was set for production decline. Not only did he estimate, in 1956, that U.S. oil production would peak around 1970, but also with this method he later predicted the world peak would be between 1995 and 2000 (Anderson, 2008).
Several internationally known and respected petroleum experts, Colin Campbell, Jean Laherrere, Brian Fleay, Roger Blanchard, Richard Duncan, Walter Youngquist, and Albert Bartlett (with various methodologies) all estimated a peak in conventional oil production would hit around 2005. Further, the CEOs of Agip and ENI SpA, (Italian oil companies) and ARCO (a BP subsidiary since 2000) also published estimates for peak oil to be reached in 2005. In November 1997, the International Energy Agency (IEA) convened an Oil Conference in Paris. Among the various papers presented, Jean Laherrere and Colin Campbell presented three empirical papers on oil depletion.
As a result of this conference, the IEA prepared a paper for the G8 Energy Ministers’ Meeting in Moscow, March 31, 1998. The IEA adopted Laherrere and Campbell’s view, and forecast an imminent peak in conventional oil for 2012. This represents a significant reversal of the IEA position from the no-limits stance of previous years (Hanson, 2001). In general support of the imminent peak in world oil heralding declining production levels, Hirsch (2005, p. 9) lists twelve highly respected oil studies, and eight of these predict peak oil by 2012.
In fact by 2006 not only had most countries reached their peak oil production and its subsequent fall-off in production, but declining world oil production levels set in, heralding dwindling oil on world markets and shrinking reserves in the ground. The graph below shows this state of affairs with world oil production having peaked in early 2006, and from there we see a trend of continual slow decline, and by 2030 oil production is predicted to drop to 40 mbpd, less than half today’s production (Bowman, 2008). Other analysts (for example most recently Zittel and Schindler, 2007) give similar analyses for oil supply drop-off beginning around now. This all shows that the general trend for conventional oil production over the last couple of years was one of overall decline. Actually the industry is harboring pent up forces for permanent steeper decline to set in.
Various comments are now being heard from high in the oil industry. Ali Naimi, the Saudi Oil Minister said, “Limited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensuring adequate energy to fuel future economic growth”. Head of Libya’s NOC (National Oil Corporation), Shokri Ghanem admitted that “Very little can be done by anyone, there is not enough spare capacity” (Hoyos, 2008).
Olduvai Theory and Societal Implications
Obviously for the world there are critical implications for lifestyle and economic development of its peoples as a result of the emerging drastic shortfall in oil supplies and the impact on the Industrial Civilization.
Duncan (2000) elaborates in detail on the Olduvai Theory which predicts that the life expectancy of Industrial Civilization is around a hundred years, as measured by the world average energy production per person per year. In this theory Industrial Civilization began in 1930 and is predicted to end around 2030.
The following graph (Duncan, 2000) shows the Olduvai curve and events from 1930 to 2030. When published, the graph was historic from 1930 to 1999 and hypothetical values and events are shown from 2000 to 2030. Of course the first eight years of the third millennium is now history for us.
Eight anchor point events are highlighted. The first in 1930 (Note 1) marks the beginning of Industrial Civilization. The second event in 1979 (Note 2) shows the historic all-time world peak in energy production per capita. The third event in 1999 (Note 3) marks the depletion of cheap oil, when oil prices hiked over the year with a series of cuts in OPEC production. The fourth event on September 28, 2000 (Note 4) marks the escalation of Middle Eastern violence — the “Jerusalem Jihad” and this signals the end of the Olduvai “slope”. Subsequently the world reaches the Olduvai “slide”. This begins in 2000 with war escalating in the Middle East, possibly a harbinger of the looming civilization clash between the West and Islam. The fifth event in 2006 (Note 5) heralds the all-time world peak of oil production. The sixth event in 2008 (Note 6) warns of the OPEC crossover event when the OPEC nations produce more than half of the world’s oil and increasingly control the world’s oil exports. Whenever this does actually occur, it will give incredible “petropower” to the OPEC cartel. Then in 2012 (Note 7) we come to the end of the Olduvai “slide” – the beginning of the next interval – the “cliff”.
This “cliff”, beginning 2012, is the final interval when permanent blackouts spread worldwide – first with rolling brownouts and temporary blackouts and then the electric power networks themselves fail. The final event in 2030 (Note 8) predicts a decline in world energy production per capita to the 1930 level – which was the beginning of the Industrial Civilization. The average rate of decline of energy production from 2012 to 2030 will cause increasingly dramatic effects.
The power shortages and interruptions will be the result of over-demand for energy from economic boom – the increasing use of energy-thirsty machines, and population growth – all in the face of falling energy supplies.
According to the Olduvai theory, Industrial Civilization is reliant on electricity: electricity is the quintessence of Industrial Civilization. World energy production per capita increased from 1945 to its all-time world peak in 1979. Then from 1979 to 1999 energy production per capita declined. Subsequently from 2000 to 2011, according to the Olduvai schema, world energy production per capita will maintain a steady decrease trend (the “slide”). Finally from around year 2012 there will be a host of permanent electrical blackouts around the world. These blackouts will then parallel falling energy production per capita, until by 2030 it will have declined to the same level it was a hundred years before, in 1930. The rate of decline from 2012 to 2030 is an unprecedented continuous decline of around 5% per annum (the “cliff”). The total duration of Industrial Civilization therefore is around 100 years.
The Olduvai “slide” from 2001 to 2011 may culminate in events that resemble the “Great Depression” of the 1930s – unemployment, breadlines, and homelessness. As for the Olduvai ‘cliff” from 2012 to 2030, there may be no precedent in human history. The instant the power goes out, you are back in the Dark Ages.
The permanent blackout of electricity is crippling. Without oil to continue to fire up our industrial society we will be without: public electricity, transport, industry’s processed products (food, clothing, packaging, and machinery), communication and computer services. A little bit of brainstorming shows that the society and its systems would come eventually to a standstill. A totally paralyzing set of circumstances with hunger and deprivation on an unprecedented worldwide scale.
Pause for a moment – just imagine the catastrophic consequences of no electricity: no phones or computers, no industry which is electricity based, no dairy products or processed foods, no refrigeration, no water as the water pumps won’t work, no cars or transport because the petrol pumps won’t work, no schools or universities, no banks which can’t electronically process transactions, no employment, no income – dwindling stocks of everything as society collapses to unprecedented levels of chaos and deprivation.
These critical levels of human suffering, accruing from this worsened state of affairs, could massively frustrate the world at the geopolitical level, leading to, not only heated political engagement, but also military confrontation.
The post-2012 era of Olduvai has no precedent in history, and therefore the world will soon be entering totally uncharted waters. For sure nations and groups of nations will attempt to protect and maintain their economic development and living standard.
However, what we really need is for us all to cooperatively take urgent steps to ameliorate this looming situation and prepare for how we will live in a post-energy world and its civilization. A whole new sustainable, localized and agricultural based civilization is needed; with a new mindset of cooperation and care, and harmonious social behavior, along with alternative fuels for a less fuel-hungry society. And that is the topic of another paper.
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