likely means they’ve had to explain that concept, and formative reason for their existence, more than a few times. “Peak Oil” is actually about oil production peaking, or arriving at a time when an oil field or country has maxed out its production, and, quite literally, reached the point of diminishing returns. The country and its fields will continue to produce oil, but at an ever-diminishing rate, while demand presumably continues to grow. For ASPO, this halfway point of reckoning is quite close at hand and poses potentially alarming problems for a global economy primarily fueled by hydrocarbons.

On a recent night in Denver, ASPO members and those interested in the concept of Peak Oil or Peak Energy gathered at an area bookstore for a presentation by J. David Hughes, currently president of Global Sustainability Research, and recently retired from three decades of work at the Geological Survey of Canada. In a presentation entitled “The Energy Sustainability Dilemma: Powering the Future in a Finite World,” Hughes used a barrage of data to show where the consumption of hydrocarbons has been, where it’s going, and how its future will be impacted by a population that’s exploding in numbers and thirst for energy.

Going back hundreds of years and overlaying the advent of various fuels – wood, coal, oil, natural gas – with global population trends, Hughes sketched a steeply rising graph. “Human population has exploded and that explosion has been highly correlated with hydrocarbon consumption,” he concluded.

In 1850, 90% of the energy consumed by the average citizen was biomass (wood). By 2007, the average citizen still used the same amount of biomass, but tacked on an additional 800% more energy. “Each new form of hydrocarbon energy hasn’t replaced the previous one, it’s just been added to it,” Hughes explained, pointing out that 89% of that energy consumption in 2007 was nonrenewable.

Past their Peak

Running through production numbers, past and present, Hughes said 17 countries’ oil production has peaked since 2000, with 23 hitting that point of diminishing return since 1996. Hughes said in some cases, like Iraq and Iran, one could argue that production has hit a political vs. geological peak, but in most instances, it’s simply a matter of depletion.

The concept of Peak Oil is largely attributed to M. King Hubbert, who correctly predicted in 1956 that U.S. oil production would peak between 1965 and 1970. Most believe U.S. oil production topped out in 1970, with today’s production levels some 40% below that apogee. Particularly alarming was data about Mexico and its super field, Cantarell, considered by many to be the second-largest oil field in the world. Hughes said Cantarell’s production is declining by 15%/yr, so that it may have no oil to export in just 6 years.

Predictions of Peak Oil vary, for example that of retired British petroleum geologist Colin Campbell, who wrote the seminal Peak Oil work “The Coming Oil Crisis” back in 1998, forecasting that global oil production would peak in 2010 at 87.5 million barrels/day (bbl/day), with half of the world’s 2 trillion recoverable barrels of oil depleted. Rosier outlooks on global reserves that place recoverable barrels at 3 trillion would only move the peak to 2018, according to Hughes.

The U.S. Energy Information Administration (EIA) asked for a survey of peak predictions, and the average response was 2014. Hughes pointed out that if you remove the outliers, peak could come as soon as 2012. “2012, from a mitigation point of view,” Hughes said, “is tomorrow.”

In North America, the rate of depletion is 5-6%/yr, or about 5 million bbl/day. Just to make up for that shortfall, Hughes said, “We’d need six new Saudi Arabia’s by 2030.” Potentially exacerbating the problem is today’s economic climate, which has caused a hiatus in oil investment that will be felt quite acutely in three to four years.

In natural gas, the EIA has pushed the supply peak out to 2025. That comes in spite of a boom in gas exploration. Drilling is up 200% in North America from 1991-2006, but production has only increased by 15% over that time. Since 2001, production is only up .7%.

Oil, gas, coal, nuclear, and renewables

Hughes laid out the situation for coal (proven reserves and location means it has to be a part of our future) as well as nuclear energy (aging reactors need to be replaced to the tune of 10-12/yr just to maintain its contribution), but kept coming back to one data set.

Compared to 1890, there are 6.6 times more people on earth, using 9.7 times more energy/person and 65 times more total energy, with 90% of that energy non renewable. Renewable energy will have to play a role in our future, but Hughes believes, “The gap left by hydrocarbons is just too big to be filled by renewables.” Which ultimately means using less energy.

What does it mean for plastic?

Plastics got a taste of what Peak Oil might look like last summer when gas and oil reached record highs, and Hughes said inflation in natural gas has led to demand destruction for petrochemicals, with “industrial” demand for gas, which includes chemicals, off 22% since 1997.

Plastics are so ubiquitous and have improved our quality of life in so many ways, it’s difficult to imagine a wholesale reversion to the glass, metals, and woods they have replaced. Estimates vary, but for every barrel of oil, only 3-7% goes towards petrochemicals and plastics. That said, in a post-Peak world, will energy demands trump plastic, so that 100% of oil and gas extracted is used to power our world?

Hard to say. In any case, I would guess that such an environment would require 100% recycling of plastics, either for reuse or as fuel (you can’t very well landfill trapped hydrocarbons when we’re running out). I would also think post-Peak would push development of resins from non-oil and gas sources.

What do you think?

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