Review: The World After Cheap Oil

February 6, 2015

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The World After Cheap Oil
By Rauli Partanen, Harri Paloheimo and Heikki Waris
250 pp. Routledge – Oct. 2014. $59.95.
Toward the end of this book, its authors make an astute, if self-deprecating, observation about its potential merits. They’ve been discussing how innate human biases cause us to make cognitive errors when trying to make sense of world crises. They’ve described in particular the tendency of scientifically knowledgeable people to become less convinced about climate change the more evidence they encounter for it, due to confirmation bias. For the authors, this fact “raises the question of how meaningful writing this book has actually been.” Won’t skeptical readers simply cherry-pick the data that support their views and reject the rest? While it is, of course, correct that some readers will do this, there’s no question that writing the book has been meaningful. Indeed, in this era of unprecedented challenge, few things could be more meaningful than accurate knowledge such as this book contains, together with the will to act on that knowledge.
Written by Finnish energy analysts Rauli Partanen, Harri Paloheimo and Heikki Waris, The World After Cheap Oil offers an exhaustive, up-to-date dissection of the world oil situation. It looks at the issue from every angle, starting with the looming supply shock for which the world’s developed nations are tragically unprepared, and moving on to the concomitant crisis with Earth’s climate that our oil use has unleashed. It also supplies an in-depth assessment of alternative energy sources, as well as the science, geopolitics, psychology and economics vital to understanding our predicament. Unquestionably the book’s strongest points are its wealth of hard data, straightforward explanations and informative visual aids. Indeed, the authors aptly describe their purpose as providing “a thorough package of information” about the end of cheap oil.
But again, they’re somewhat defeatist about the endeavor of persuading others with this information. Their defeatism is grounded on sound psychological principles that explain why people too often forego rational thinking and decision-making. Among the mechanisms at work are confirmation bias (selecting only the evidence that supports one’s previous opinions), belief in authorities (so as to shift responsibility to someone else) and natural fallacy (the inability to distinguish between the way things are and the way we wish they were). What undergirds all these processes is the dreaded prospect of finding oneself with less, in the way of material means and comforts, than we have today. Most of us refuse to face this possibility, making resistance to changes in the status quo “easy and natural,” write the authors.
The first thing to grasp about our situation with oil, and the thing to which our psychology most blinds us, is that its rate of supply is about to dwindle irreversibly. This has profound implications for our modern way of life, since absolutely everything in today’s world depends on cheap, plentiful oil. The resources that have been touted as replacements are actually nothing of the kind—they possess none of oil’s energy density, portability or versatility. And anyway, if we were going to build an infrastructure capable of running on them, we would have had to begin decades ago, not now when the crisis is impending. The upshot of all this is that industrial society now finds itself in territory familiar to scholars of civilizational decline. To use a word that the authors observe is now forbidden in public discussion, the modern world faces collapse.
There are legions of vested interests, from oil companies to governments of oil-producing nations, that know the status quo is unsustainable but are determined to conceal this fact so they can profit as long as possible from current arrangements. The propaganda they spread is a case study in how to lie with statistics. To take the example of oil production figures, we’re led to believe that current global output is around 90 million barrels per day (mbpd), when it’s really only about 75 mbpd. The difference between these two numbers is made up largely of other liquid fuels that are anything but oil, like ethanol and biodiesel, but are lumped under the same heading anyway. Such statistical trickery, which this book exposes at length, allows people to claim that oil production hasn’t peaked but has steadily grown in recent years. In reality, it peaked 10 years ago, and rather than growing, has been dropping ever since.
Besides their creative accounting of oil production, the official reports also make omissions about the nature and quality of what’s being produced. Key to understanding these omissions is the concept of net energy, or energy returned on energy invested (EROEI), the difference between the energy content of each barrel of oil produced and the amount of energy that went into it. In 1930, U.S. oil had an EROEI of at least 100 to one (for every 100 barrels to reach consumers, only one barrel’s worth of energy had to be expended). By 2000, that ratio was in the 11- to 18-to-one range.1 Much of the oil still underground has a lower-than-break-even EROEI, meaning it’s destined to remain undeveloped. In short, industrial society must sacrifice ever-greater amounts of its total energy to obtain ever-poorer-quality energy, a dilemma with ruinous implications. Peak oil author Richard Heinberg has called oil’s declining EROEI “one of the biggest underreported economic stories of our times.”2 
With one deft chapter the book dispels the mess of proposed alternatives that we see paraded around whenever oil prices rise. The authors explain how most promoters of alternative energy schemes blithely ignore the physics that makes them nonviable, particularly the second law of thermodynamics, also known as entropy. Diffuse energy sources like sunlight can’t substitute for oil because they don’t represent “exergy,” or usable energy. The book also emphasizes another overlooked fact, which is that alternatives are utterly dependent on the oil they seek to replace. For example, the parts for solar panels and wind turbines are made either directly from oil, in the form of plastics, or from minerals whose mining, transport and processing take enormous quantities of oil. Due to the lack of energy literacy in our society, most people fail to consider such things, which, in the authors’ words, “makes it easy to offer people solutions based on nothing else than make-believe.”
One alternative to cheap conventional oil that has been much ballyhooed in recent years consists of oil and natural gas obtained through fracking in the United States. However, like everyone else who has bothered to investigate the facts regarding the fracking boom, the authors conclude that it will be short-lived. Nor do they see it being replicated to any meaningful extent in other areas of the globe where hydrocarbon-bearing shale exists. They direct those interested in the details behind this assessment to a 2013 Post Carbon Institute report titled "Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance?" Authored by geoscientist David Hughes, it looks at production data from more than 60,000 fracked wells in America, the largest sample ever examined. Hughes predicts a peak in U.S. shale gas production by the end of this decade. He also estimates that, at current prices and technology, only 5 to 10 percent of the world’s shale oil and gas endowment can actually be produced.3 
A crucial concept visited throughout The World After Cheap Oil is that of the “energy trap.” It can be summarized thus. Once world oil production begins to decline and the resource goes from being abundant to scarce, the oil that would be needed to reduce society’s dependence on oil is no longer available. This is because, as noted earlier, alternative energy sources sorely depend on oil just for their current production, not to mention the massive build-outs required to make them the dominant fuels. In a world of scarce oil, every ounce of it we possess will have to meet essential needs before those of alternative energy. The trap will become ever more acute the further we move along the depletion curve, since the sacrifice required to invest in renewables will have to come out of an ever-shrinking pie.
Peak oil and climate change have long been competing issues seemingly incapable of understanding each other. Thus, it’s refreshing that the authors of this book fully appreciate both of these fundamental sides to the same coin. They’re well aware of key points in the peak oil argument that are lost on most climate change activists, chief among them the fact that we don’t really have the quantities of hydrocarbons required to bring about the worst climate impacts. Yet they’re equally aware that oil depletion won’t solve climate change. They know of the mounting evidence that catastrophic climate shifts may already be unavoidable. As for the likely interplay between peak oil and climate change in coming decades, they foresee an ongoing “wrestling match” between the two issues. Though we may undertake earnest efforts on the climate, they will be undermined whenever the economy suffers and we have to burn more fossil energy to restart economic activity.
In its assumptions and conclusions about our future prospects, this book is very much in line with the ideals of degrowth. Degrowth proponents advocate the wholesale downscaling of production and consumption across industrial nations. However, the present authors stress that much of this work will be done for us against our will. As oil supplies shrink, demand will contract, first among the poor and then among the middle class, eliminating scores of nonessential services and businesses in the process. Eventually even this demand destruction won’t be enough and we’ll see shortages and rationing. There will be respites in which economic activity will resume at a lower scale than before, but these in turn will bump up against new limits, causing further recessions. In an environment of such volatility, it will become ever more difficult to plan long term. It will also become increasingly hard to invest in more oil-efficient infrastructure.
Even within these limitations, however, we can do much to reduce our oil use in travel, transport, food production and social services, among many other areas, through community-scale initiatives. The book offers thoughtful discussions of numerous opportunities along these lines.
I can find only two flaws in this book: too little space spent on nuclear and a few glitches in the translation from the original edition’s Finnish text. The translation issues aren’t many and are mostly of the hairsplitting grammatical variety, but a couple of them interfere with clarity and meaning. One passage speaks of the risk to oil supply disruptions when it really means the risk of oil supply disruptions. Another says it would be advantageous to many parties “if the general oil efficiency and consumption in the United States increased dramatically, closer to European levels.” We assume the authors mean “if the general oil efficiency increased and consumption decreased,” because the sentence doesn’t make sense otherwise. However, it isn’t entirely clear.
As for the skimpy treatment of nuclear energy, it can be seen mainly in a failure to bring up obvious implications of oil’s decline for nuclear’s future viability. For instance, nowhere does the book mention that global reserves of fissionable uranium would quickly deplete if we were to step up nuclear production to offset oil’s decline. In contrast, it does make this same point with regard to coal reserves in the event of a ramp-up in liquefied coal (CtL). Even so, this oversight is but a dent in the armor of an otherwise thoroughly comprehensive analysis.
There was much excitement about the original version of this book when it came out two years ago. It was shortlisted for Finland’s two most prestigious non-fiction book awards, Tieto-Finlandia and the Kanava Award.4  The authors were encouraged by this initial success and soon began work on the present, expanded edition. The result is a rich fount of information, wisdom and good advice from three sharp intellectuals who have studied the issues for years. They may despair of reaching a wide audience with such a starkly honest book, but I feel their despair is mistaken. Eventually enough people will wake up and demand real answers that this book will be guaranteed a considerable and engaged readership.
1 Charles A.S. Hall and the “EROI study team,” “PROVISIONAL RESULTS FROM EROI ASSESSMENTS,” The Oil Drum, Apr. 8, 2008, h (accessed Feb. 2, 2015).
2 Richard Heinberg, “This is What Peak Oil Looks Like,” Resilience, Sep. 25, 2013, (accessed Feb. 2, 2015).
3 Nafeez Ahmed, “Shale gas won’t stop peak oil, but could create an economic crisis,” Guardian, Jun. 21, 2013, (accessed Feb. 4, 2015).
4 “The World After Cheap Oil,” Kaikenhuipun blog, (accessed Feb. 3, 2015).

Frank Kaminski

Frank Kaminski is an ardent reader and reviewer of books related to natural resource depletion, climate change and other issues affecting the fate of industrial civilization. He lives in southwestern Washington state near the Nisqually National Wildlife Refuge.  

Tags: climate change, peak oil, powering down, Renewable Energy