Oil is a limited resource and the world is using it up. In fact, oil production may be peaking now, with dire consequences to come. This is the thesis of James Kunstler, a noted critic of America’s suburban sprawl. His book is titled The Long Emergency. According to Kunstler, the world faces an unparalleled crisis. Food production, industrial efficiency, heating and transportation depend on oil production. And oil production is about to enter a period of irreversible decline. Kunstler views “the period ahead as one of generalized and chronic contraction.” Civilization conceived as economic progress cannot continue. Technology cannot save us because it will take decades to build new energy technologies for operating cars, trucks, aircraft and ships. “This is a much darker time than … the eve of World War II,” wrote Kunstler. “The current world population of 6.5 billion has no hope whatsoever of sustaining itself at current levels, and the fundamental conditions of life are about to force the issue.”

After reading the first few chapters of Kunstler’s The Long Emergency I called a geologist friend who’d worked in the oil business. “So what do you think of peak oil?” I asked. His reply was somewhat optimistic: “Higher oil prices will spur new technology.” He then pointed to oil shale extraction technology. “ I’m not worried about running out of oil,” he said, “but I am worried about the geopolitics of oil.”

Curious about my friend’s reference to oil shale, I did some non-geological digging. According to the Energy Minerals Division of the Association of Petroleum Geologists, “Total world resources of oil shale are conservatively estimated at 2.6 trillion barrels.” It is useful to remember that, according to Kunstler (p. 49), “The earth’s total endowment of liquid petroleum was estimated to be roughly two trillion barrels.”

Oil shale is currently being exploited by China, Brazil and Estonia. Between 1980 and 1991, Unocal operated a large-scale experimental shale mining and retorting facility in the United States that produced 4.5 million barrels of oil. Shell (oil company) has developed a method for exploiting oil shale called “in situ conversion,” discussed in a Sept. 2, 2005 Rocky Mountain News column. According to James M. Taylor, managing editor of Environment & Climate News, “several major oil companies” are considering ventures “to extract oil from large oil shale deposits in Colorado, Utah, and Wyoming.” These deposits may contain more potential energy than the world’s proven crude oil reserves. The economics of oil shale is fairly straightforward. According to Terry O’Connor (a vice president at Shell): if the price of crude stays consistently above $30 per barrel then oil shale becomes profitable.

There may be a problem with oil shale, however. The oil companies plan to wait another four years before they decide to extract oil from oil shale. The problem with peak oil is the lag-time between a devastating and unpredicted drop in oil production and bringing new technologies on line. Nobody knows if oil production will start to decline this year or next year or ten years from now. Since massive investment in new technologies must occur two decades in advance of peak oil (according to one government study), and peak oil may be occurring now, the world economy faces a grave potential crisis.

In the Winter 2005/06 issue of The National Interest, former U.S. Energy Secretary James Schlesinger wrote dismissively of present difficulties in oil production. Taking an optimistic position, he does not believe that peak oil has arrived. “There is a mismatch between the types of crude available and what refiners are able to process,” he explained. This situation came about because excess refining capacity has existed for decades and there was, he wrote, “only a modest incentive to invest in additional capacity.” According to Schlesinger: “knowledgeable analysts believe that the world will, over the next several decades, reach a peak – or plateau – in conventional oil production.” In making this statement, Schlesinger sited Robert L. Hirsch’s “The Inevitable Peaking of World Oil Production.” But Hirsch’s Dec. 7, 2005, testimony before Congress does not endorse this claim. According to Hirsch, “It is possible that peaking may not occur for a decade or more, but it is also possible that peaking may be occurring right now.”

One government study indicates that a steady 4 percent decline on global crude production would cost millions of American jobs and send the price of oil above $160.00 per barrel. “Chinese officials,” according to Hirsch, “have forecast the peaking of world oil production around the year 2012.” An irreversible contraction of the world economy, as we know it, would occur from that point forward (until new technologies came on line). According to Kunstler, “It would be reasonable to wonder whether the United States will continue to exist as a unified entity, and what kind of strife the Long Emergency could ignite region by region,” Think of the windowless office buildings of Los Angeles and Phoenix without cheap energy to run air conditioners. Think of the commuters and the distances they drive, day after day, between home and work. “The American West, especially the Southwest, may suffer inordinately for several reasons,” wrote Kunstler. “Southern California, Arizona, New Mexico, Nevada, parts of Texas, Utah, and Colorado have been made habitable solely because of cheap energy.”

© 2006 Jeffrey R. Nyquist
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