Monday, October 25, 2004

Should we be concerned about peak oil now? In a word, yes.

My previous post on peak oil includes two significantly different timelines for the day when oil production will turn down forever. As one source said, we won't really know who is right until quite a ways after the peak. So what level of concern is appropriate given the great uncertainties surrounding this event?

Let me use the analogy of homeowners insurance. We pay for fire insurance as part of the whole package, but how many of us have actually experienced a house fire that led to an insurance claim? Very few, I would venture. So, why do we pay for it (other than because the bank holding the mortgage requires it)? The answer is because the consequences of a house fire can be so devastating. We take out insurance against rare events because of the severity of those events, not the likelihood of them.

I have found that many Americans do not understand this simple idea. Hence, the almost complete lack of concern about our energy future. But, even if peak oil doesn't occur for 50 years, it will still occur. The downside to getting ready now is that we'd have to forgo some current consumption to pay for a new energy system. In all likelihood that would mean moving away from hydrocarbon fuels that are creating global warming (and its possible severe outcomes). As a result we would have cleaner air, we would slow or halt global warming, we would create vast new employment in the alternative energy field, and we'd be all ready when the downturn in oil production came. We would probably hardly notice it when it arrived. AND THIS IS THE WORST THAT WOULD HAPPEN IF WE MADE THE ENERGY TRANSITION EARLY!

The upside to getting ready now is that peak oil production may be nearer than most people think and waiting any longer could result in huge economic, social and ecological disruptions, disruptions that we might well rate catastrophic in retrospect. Some observers say that failing to prepare might even spell the end of industrial civilization worldwide and lead to a cascade of events that would reduce human populations by 90 percent over the next century. Wouldn't it be prudent to take out some insurance against that, however unlikely such a scenario may seem to us now? And the insurance we'd be taking out wouldn't be like homeowners insurance--money lost forever unless we make a claim. Instead, this kind of insurance would be an investment that pays for itself over time in a better environment and a more sustainable, decentralized, and probably more peaceful world society. Why aren't we doing it?

[In subsequent posts, I will talk about nonconventional sources of oil and whether those sources could solve the challenges we face. I'll also talk about the economic argument that the marketplace will solve our energy problems because rising prices will lead 1) to greater supply and 2) to the substitution of other energy sources for oil.]

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