What will be the effects of peak oil on the
ordinary citizen and how will we see it coming? On this page we
see the likely effects of the future by examining the past.
2000 Fuel Protests
The European fuel protests of 2000 were an excellent example of
what will happen when we are deprived of our petrol and a salutary
The price of oil had been low for some time and when OPEC decided
to reduce their quotas, the costs of oil shot up. Fishermen in France
began to protest about the rises and the bug spread across the Channel.
Farmers (who use low-tax fuel so were more aware of the rises) and
hauliers (who saw their Continental rivals using lower taxed diesel)
started their own opposition. The government was in a pit as it
had gradually raised fuel taxes when oil was cheaper and did not
reduce them as the price per barrel rose. The result was blockades
of refineries for about two and a half weeks.
The implications of just this minor shortage was tremendous. Naturally
there were huge queues at petrol stations to refuel, but there was
also panic buying at the shops. Some ran out of bread and milk.
Postal collections were suspended on Sundays to conserve fuel. Farm
animals were threatened with starvation because the feed was unable
to be delivered. Schools closed down and hospitals cancelled all
but emergency operations. And all this from two and a half weeks.
For the richer countries, initially, the oil will probably still
be available although the consumer will pay through the pocket.
Governments (in Europe at least), could soften the blow by reducing
the tax on fuel but they would have to find the money from somewhere
else, especially if recession is biting. For the poorer countries
(and the others eventually), there will simply not be enough oil
to cover demand. The results, coming in over a longer period, will
probably not be as dramatic as the 2000 fuel protests, but we will
have to find ways of reducing our fuel usage. The costs of air travel
will rise and foreign holidays will decline, exotic foods will become
rare and there will be less choice in supermarkets, commuting long
distances to work will be less acceptable, driving children to school
will be frowned upon. The consequences are enormous and it
will all happen within a decade or two.
image left is a satellite picture of the eastern USA and Canada.
Move the mouse over the image to see what it looked like during
the blackout of 2003.
The blackouts that hit the eastern USA and Canada in August 2003,
and the lesser failure that hit London’s Underground system
shortly afterwards shows how totally dependent we are on electric
power and the dramatic effects that its absence causes. Standard
and Underground trains came to a halt, trapping people within; lifts
stopped between floors; street lamps failed; people poured from
the buildings; all increasing the risk of accidents. People were
unable to communicate because they had switched from land phones
to mobiles. The pressure on the emergency services was immense.
Imagine the effects when it was the whole country, not just a few
cities that is hit. And if that blackout lasts for days, with more
occurring in following weeks
When oil begins to decline, the blackouts (and brownouts when power
is reduced) will be constant and hit throughout the year. No light,
no heating, no cooking (unless you have gas and imagine how the
cost of that will rise!) The number of deaths will soar and so will
the pressure on the authorities. The emergency services, the hospitals
and GPs, welfare costs will rise as efficiency suffers.
In time, the number of blackouts will increase and their time lengthen.
This is when the very substance of civilisation will be put at risk.
Our modern society cannot exist without electricity. It is even
more essential to us then oil. Blackouts will take us back to the
dark ages in more respects than one. And that is where the
Olduvai Theory comes in (see Olduvai Theory).
hurricane and flooding that struck New Orleans and the surrounding
areas of the southern United States in August and September 2005
showed just how quickly the most organised society can break down.
Although the affected area was huge, most of the USA was unaffected
and therefore still had a fully working infrastructure, security
and government. Yet the inhabitants of New Orleans were left to
fend for themselves for a week, resulting in looting (both for gain
and survival), widespread crime and death. Imagine the results if
it was a whole country affected, and if the security and emergency
forces were unable to help because of oil shortages. It is an excellent
example of what can happen when both security and the basic necessities
of life are removed.
If you're wondering why you never hear of peak oil from the oil
companies and government, remember what happened in January 2004.
Here is the report from the BBC website:
Shell shares dive as reserves cut
Despite rising profits, investors have turned their back on Shell.
Giant oil group Royal Dutch Shell has said it is trimming its
figures for proven oil and gas reserves by 20%. Stunned investors
promptly began a sell-off that knocked more than 7% off the Anglo-Dutch
firm's share price in both London and Amsterdam. Shell said it
does not expect the reassessment to have any impact on its financial
results, as 90% of the reserves involved remain undeveloped. But
analysts were unconvinced. Shares in fellow oil firm BP also fell
Investors and oil analysts were startled, and puzzled, by the
"It was shocking, to say the least," the Agence France
Presse news agency quoted one oil analyst who did not wish to
be named as saying. "They gave no detailed explanation why
this has happened."
"This reduces the value of the company by 10% using discounted
cash flows," said Richard Brackenhoff, an oil analyst for
Kempen & Co.
Eventually, the chairman was forced to resign. The effects on the
Company's share price is clearly shown in the chart below. Barely
had the shares begun to rise than another reserve cut in March knocked
them down again.
Shell Share Price December 2003 to February
You can imagine the effects on the stock market if the oil companies
admitted that oil was going to decline every year from now on and
never recover. One day they will have to admit it but no
company (or chairman) wants to be the first.
How will we know when the oil decline bites. People have made various
predictions. The first is from the ASPO Newsletter of March 2002
(the Nemesis Report).
Initially it will be denied. There will be much lying and obfuscation.
Then prices will rise and demand will fall. The rich will outbid
the poor for available supplies. The system will initially appear
to rebalance. The dash for gas will become more frenzied. People
will realise nuclear power stations take up to ten years to build.
People will also realise wind, waves, solar and other renewables
are all pretty marginal and take a lot of energy to construct.
There will be a dash for more fuel-efficient vehicles and equipment.
The poor will not be able to afford the investment or the fuel.
Exploration and exploitation of oil and gas will become completely
frenzied. More and more countries will decide to reserve oil and
later gas supplies for their own people. Air quality will be ignored
as coal production and consumption expand once more. Once the
decline really gets under way, liquids production will fall relentlessly
by 5%/year. Energy prices will rise remorselessly. Inflation will
become endemic. Resource conflicts will break out.
Glenn Morton on his website
is equally bleak
This spreading of rolling blackouts will ultimately cause severe
recession, especially as oil prices go higher, which will happen
later this decade. Oil powers aeroplanes, electricity, jobs. Bartlett
is quoted as noting that modern agriculture is merely a way of
converting petroleum into food! Without energy, food supplies
Another implication concerns the ability of governments with
socialistic tendencies to maintain their socialism
the last generation of Brits and Scots who will have the social
programs like National Health Care. Governments all over the world
will not be able to finance plentiful services in the face of
high oil prices.
Political instability will ensue. I am sure that a few leaders
will be headless after the masses get to them. It is in such times
that Lenin, Hitler and other dangerous individuals take the reigns
of power. Life will be a bowl of cherries then.
After the world Hubbert peak, when energy costs go way through
the roof, there will be a period in which an emphasis on conservation
will occur. This will be like the early 1980s when the price of
oil caused the world to become more energy efficient. Smaller
cars were purchased, insulation put into houses and lighting changed
to efficient bulbs. That will occur again putting off some of
the worst problems. But this time, unlike the 80s, there will
not be increasing oil production. Every year unrelentingly we
will require further efficiencies in our energy use. Every year
inflation will add to the price of goods because oil gets scarcer
My grandfather told me about the Great Depression,
indeed he raised his family during that time. His job was easy
by comparison with what is about to hit.
People in Third World countries, like Mexico, will do the only
human thing, the thing we all would do in their circumstances
– try to get into countries they perceive have wealth and
jobs. The army, without oil will be unable to defend the borders.
The sight of poor desperate people being shot in order to keep
them out will not be pretty.
How will you know?
If you are reading this, you have one big advantage over 99% of
the rest of the world you are aware of the problem.
Almost everyone else believes that oil is plentiful or at least
a minor problem. They worry about global warming, or poverty, or
wars. They will not know of peak oil or believe it until it hits
them in the face, until the prices at the pump go up every day and
unemployment begins to soar. But you do. Watch the newspapers and
television, searching for the statistics that are usually given
little emphasis in particular, oil production. Download the
ASPO newsletters every month, and the BP Statistical Review every
As for alerting the politicians, the experts have already tried
that but our leaders either ignore them or don't believe them. Nevertheless
it is worthwhile contacting them as well as newspapers, the broadcast
media and schools. The awareness of peak oil will be a gradual thing
and the more that the doubters have heard of it, the quicker they
will recognise it.
According to the EIA figures, world oil production seems to have
reached a plateau, despite the very high oil prices. In the past,
OPEC increased or decreased production to keep the oil prices
within a range (for a long time, between $20 and $28). One would
have expected the high cost of oil to stimulate a rise in production
to lower the market price, particularly now we have seen the soaring
rises in 2008. The flattening of production and the continued high
price suggests that OPEC has little control now over what it is
outputting. It says it will not increase production; it
knows that it cannot.
As far as oil prices go, we can see in chart A2 what we are aware
of in our day-to-day lives, how they have already surpassed the
catastrophic heights seen in the 1970 and 80s. Few people are yet
attributing these rises to peak oil but the link is clear. When
a hurricane hits the Mexican offshore oil fields or there is an
attack on the Saudi government, the price of oil rises because
there is no longer anywhere else to turn to for alternative supplies.
If your local supermarket does not get a delivery of bread, you
won't be worried if you can go to another supermarket or local
shop. But if they are already producing at full capability just
to supply their regulars, the results are shortages and price
As far as oil production is concerned, as the years go by, the
plateau will begin to drop and a permanent decline will become clear.
Oil companies and governments will pass it off as a short term blip,
assuring everyone that there is plenty of oil and production will
begin to rise soon. This is your advantage for, while the unenlightened
will be placated, you will read between the lines and act. Do not
miss your chance.
For more detailed information on what you can do, see the What
to Do page.
|** Indicates chart updated for 2008