Peak Oil and Why Growth is Evil

Oil has no future. Really. Just look at this graph of oil discovery (borrowed from this excellent Peak Oil Overview). The graph shows oil discovery (in billions of barrels) per decade.

Now oil discoveries peaked at about 500 billion in the 1960’s, about the time I was born and started crawling towards anything electrical and driving my Mum crazy. World wide we use around 85 million barrels/day, or 30 billion a year. So when you read the next mainstream media article about a “billion barrel oil discovery” remember that 1 billion barrels is just 12 days world oil consumption.

So 30 billion barrels a year is 300 billion a decade. Now look at the graph above. In how many decades did we discover more than 300 billion barrels?

And what is this fixation with economic growth? Politicians seem to be telling us we are all doomed unless we constantly grow the economy. The worst thing about the financial crisis is that we might now get “growth”. growth Growth GROWTH!

The problem with x% growth is that it is exponential. That means we consume more and more every year. It goes to infinity real fast. More oil, more water, more people, more money, more debt. Just 5% growth means doubling every 14 years. One small oversight guys: nature is finite. A good example is yeast growing in a Petri dish. Nature always shuts down exponential growth. Always. Usually by killing everything in the Petri dish.

Economics is busted as it depends on the ultimate unsustainable practice – exponential growth.


An earlier post on Peak Oil.

9 thoughts on “Peak Oil and Why Growth is Evil”

  1. I think peak oil is overall largely irrelevant for two reasons:
    1) The amount of oil left depends on the price of the barrel. There’s a lot of oil that’s not exploited because it’s too expensive, but as the price goes up, so does the amount that can be extracted.
    2) Most importantly, peak oil is irrelevant because if we burn all the oil available at the rate we’re burning it, we’ll have bigger problems than just the fact we’re out of oil — climate change. So in some sense, we need to reduce oil consumption drastically regardless of how much is left.

  2. 1) We will always be able to dig up or synthesise petroleum products if the demand is there. But will we be able to drive to work at $1000/barrel? Or eat when farmers can’t afford fertilizers? Peak Oil is more about the problems that occur after oil production starts to decline with respect to demand.

    2) I think Peak Oil is a problem likely to hit in the near term, whereas I see climate change as a more gradual effect. Some people have suggested climate change won’t happen as people will be burning much less fossil fuel in the future. Others say oil depletion will lead to burning dirty fuels like brown coal to make up for reduced oil and natural gas availability.

    I think we are going to get hit by a nasty combination of (i) Peal Oil (ii) Climate Change right in the middle of (iii) the long term effects of the current Financial Crisis.

    I have actually seen this in microcosm on South Australian farms – 25% are projected to got to the wall next year due to high fuel and fertiliser prices, coupled with debt and poor crop performance due to drought. Australia had traditionally been a major food exporter – for a few months this year the state of Victoria was a net food importer.

    But I agree with your final comment – we need to kick the Oil habit. Fast.

  3. I take issue with the assumption that economic growth is bad, or even anti-environmental. Inflation-adjusted GDP per capita has been steadily increasing in the civilized world for the last century. Thanks to technology, people today can produce more, and that creates economic growth. Furthermore, if advances in clean energy are achieved it makes all sorts of environmentally-friendly pursuits more economical such as water desalination and recycling.

    It’s not the economic growth that’s bad, it’s the act of powering that growth on a finite resource. The thing is, the economy powers technological achievements, and our petroleum/coal-based energy system can act as a stepping stone to achieving sustainable energy technology faster than if the world somehow slowed down the growth that was sparked with the Industrial Revolution.

  4. We need growth as without it we’ll end up with more unemployment – as productivity increases we need less people to do the work, so unless the economy grows we run out of work for people.

    The other thing the graphs miss, is how much of the discovered oil is recoverable and how much has been recovered – without them the rate of discovery means little.

    Overall I would agree that we need to move from an oil-based economy, but if you look at oil vs GDP the west is already doing it anyway, just perhaps not quickly enough.

  5. @bmd. I agree, if growth can be supported without environmental degradation or resource depletion then it is fine. In fact, I wrote a post about this a few years ago Roads and Wealth Creation. Software is another good example – it doesn’t use significant resources to reproduce but still provides benefit.

    I would love to see a way to even maintain current economies (let alone grow) with renewable technologies. Not saying it’s impossible, but it’s a huge leap.

    However I look around and see mainly the opposite. For example economic growth in Australia means more mining, our rivers are dying due to over-irrigation of what is basically a desert. A large fraction of our economic growth (16%) is from increased debt. Speculation is another big source of growth; now most people can’t afford a house here.

    To much of the improvement in our lives over the last few 100 years has been based on unsustainable practices, e.g. turning fossil fuels into food and burning non-renewables.

    So current economic practices rely on ever increasing use of non-renewables. There is no distinction between sustainable and un-sustainable when considering growth. In fact, I understand that modern economies actually rely on growth – they will break without it. For example new money must be created to pay off existing loans + interest. So governments are stuck in a cycle of constant growth. They need future growth to pay for current debts. This overrides any environmental concerns or a future outside of the current electoral cycle.

  6. Good overview, we have a lot of issues converging in a very small window of time; peak oil, peak resources and unprecedented debt levels. Our current crop of leaders seem utterly unprepared for the future challenges.
    Learn more on the excellent crash course by Chris Martenson.
    New Zealand.

  7. There are a lot of people that track the crude oil price per barrel. Not only do oil investors keep track of the prices but average people do as well because it affects the price they pay per gallon of gas. How much do you think the price per barrel of crude oil will be heading this summer? Guess all this crap in Israel will send it through the roof!

  8. There is no problem with x% growth, for the sources is infinite, if you think big.

    Today we humans have enough knowledge to understand that our planet isn’t alone in universe. Our planet is a microscopic player in a bigger ecosystem consisting of our solar system, and the neighborhood stars and their solar systems. At the bigger end of the ecosystem is our Milky Way Galaxy and the whole universe.

    In this way the sources is infinite. “the sources” is a form of energy. And energy could never be destroyed. It only change state.

    WIth the latest new breakthroughs in plasma rocket engines called VASIMR we should be able to travel to Mars in 39 days and open up our solar system for a wider exploration .

    In the asteroidbelt between Mars and Jupiter is infinite natural resources in form av minerals and metals. With VASIMR we could also visit our nearest solar system with probes.

    Please learn more here:
    “Plasma Rocket May Shorten Space Voyages”

    VASIMR rocket engines is today’s modern version of the 150 years old steamboats engines. Steamboats gave us possible to transport people and goods around the globe in short times. VASIMR should give us possibilities to transport people and goods around the solar system.

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