Back in 2008, when oil and gas prices were skyrocketing upwards to new all-time highs, Peak Oil became a hot topic among many market commentators and energy analysts. Today, however, the massive success of fracking, the seeming abundance of shale oil, and the slowing of economies around the world to a crawl means that the growing threat of Peak Oil, and the various steps that countries around the world will need to take to prepare for much higher oil prices, is no longer a concern...at least, for now.
And yet, consider this: Perhaps for the first time ever, Gulf states in the Middle East are now taking the threat of Peak Oil seriously.
Dr. Robert Hirsch, after returning from a Peak Oil conference hosted in Qatar, reports that, among the many oil experts and other notable figures in attendance, there was a general concern that many of the elaborate cities, wealth, and vibrant economies throughout the region could be at stake once oil goes into irreversible decline.
Indeed, oil may, and most likely will, be available in other parts of the world, but as the Middle East begins to tap the remains of its decade-old wells, this will have enormous consequences for an entire region that is completely dependent on its never-ending supply.
Dr. Hirsch, former director of fusion research at the U.S. Atomic Energy Agency, and the principal author of a major 2005 Peak Oil study under the Bush administration (full bio and further links can be found here), says that the Middle East, along with the U.S. and the rest of the world, need to be taking steps now to prepare for Peak Oil.
As he wrote previously, "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."
When asked whether the shale oil revolution changes the Peak Oil picture at all, Dr. Hirsch said, “if you look at the world scale, which is necessary in considering oil overall, [the shale revolution] is really a relatively small blip.”
He further explained:
With a great deal of effort our declining production in the United States has kicked up because of [shale oil]… The problem is that tight oil is very difficult to produce—one has to drill down various depths and then drill horizontally a very long distance and then fracture the very dense rock this oil is in to provide pathways for the oil to come out. Wells that are drilled and produced in that way produce a good deal of oil that first year, dramatically less the second year, and dramatically less in subsequent years. That’s very different from normal oil production in normal oil fields. So, what one has to do is drill, drill, drill continuously in order to maintain a significant level and you have to drill even more if you want to increase the production.
After plummeting from its 2008 highs, oil didn’t take long to get back to $100, and has since been swinging up and down with global uncertainties. Although the price has come down in recent weeks, and is now reaching new lows for the year, Peak Oil experts would argue that this doesn’t mean we should be complacent.
In fact, in this interview, Dr. Hirsch warns that, if we don’t take any steps to prepare (which is what we’re doing now), the worst-case scenario is that gas and oil prices will continue to move up, eventually strangling economic growth completely. If prices move suddenly, like they did in the 70's, or in 2007-2008, he warns, “it’s going to be very chaotic for quite some time and it’s going to be even more chaotic when people realize that there’s no quick fix for the problem that we’re facing.”
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