(February 26, 2016) Environmentalists are embracing the Peak Oil Theory, but in their version supply won’t peak, demand will, since no one really wants oil.
Peak-oil theorists — they’re the ones who predicted $300-a-barrel oil, because new discoveries wouldn’t materialize — were fundamentally right after all. So they say.
No, not about the $300 price tag. Oil is now around US$30 a barrel and could stay there indefinitely, but that detail, they explain, only helps prove their point. And no, not about the failure to find new oil: The beauty of their theory, modestly revised, is that it doesn’t depend on ever-diminishing supplies. To the contrary, peak-oil theorists got it right, sort of. Oil will still peak and people will still abandon oil, just not because we run out. To the contrary, the oil industry’s doom will be its everlasting supply.
For those who have trouble understanding this horror scenario, here is a short course from instructors such as Bloomberg Business and Thinkprogress’s Joe Romm, crowned Hero of the Environment by Time magazine. If you don’t have US$41 billion worth of savvy, as Bloomberg Business’s owner does, or a PhD from MIT as Romm does, you might need to read this explanation twice.
The peak-oil theory is valid, they explain, if peak oil is understood in terms of demand, not supply. While the supply of oil won’t peak, demand for oil will, and soon, since no one really wants oil. The proof is abundant and obvious — everything’s trending that way — once you think about it. Take the automobile.
Electric vehicles now account for a mere one-tenth of one per cent of the world’s one-billion cars and, according to OPEC, will only account for one per cent in 2040. But that estimate could be way off, Bloomberg Business announced this week in “Sooner Than You Think,” its series that “examines some of the biggest transformations in human history that haven’t happened quite yet.”
“By 2020, some electric cars and SUVs will be faster, safer, cheaper, and more convenient than their gasoline counterparts,” leading people to abandon gas vehicles in droves. A Bloomberg New Energy Finance chart shows world oil demand peaking about 2025 due to this “transport transformation.”
Even earlier, by 2023, electric cars could displace two-million barrels of oil a day, creating a glut that will cripple the oil industry in the same way the advent of shale oil led to a crippling glut of two-million barrels of oil a day. (Are you still with me?)
But it gets better (or worse, if you’re rooting for the oil industry) because more and more barrels get displaced as the electric car takes over from the gasoline vehicle, in the same way colour TV took over from black and white. By 2030, eight-million barrels a day get displaced; by 2040, when half the world’s cars are electrified, 18 million barrels. If you think the oil industry is on the ropes now, imagine it after 2030. How many black-and-white TVs do you see at Best Buy?
The imminent demise of the gasoline vehicle joins other trends that make peak oil inevitable, peak-oil enthusiasts note, like Millennials’ rejection of the car culture and the imminence of a breakthrough in car batteries that will let them propel vehicles 200-300 miles on a single charge.
Absolutely key to all this was the Paris global warming meetings, explains Romm, where world leaders promised to leave most of the world’s fossil fuels in the ground. As evidence that they will succeed, he cites that exemplar of environmental responsibility: China. “China understands the future is low-carbon and then zero-carbon — so it plans to become the world leader in both the production and use of battery electric vehicles, just as it already has in both wind and solar power.” Besides, global governmental action “is inevitable in the 2020s as the reality of accelerating climate change becomes increasingly obvious.”
Put all these imminences and inevitabilities together and something else becomes inevitable — the embrace by environmentalists of a new Peak Oil Theory.
Lawrence Solomon is executive director of Energy Probe, a Toronto-based environmental group. Email: LawrenceSolomon@nextcity.com.