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by Clare Swinney


Some are calling it the collapse of the Age of Cities. Others are calling it a wacko conspiracy theory. Some say it will be the end of Global Warming. No matter what your view of the Peak Oil debate, there’s no denying the issue is fast coming to dominate international discussion on energy planning, as Clare Swinney discovers.

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Auckland City, 2019. The skytower basks in the glow of the sun’s last rays of the day before it slips below the distant and hazy Waitakere Ranges. The motorways though, are almost empty, as they have been for most of the previous 18 months — ever since petrol hit the latest in a series of highs — $8 per liter. These days the traffic is mostly buses and trucks, commuters having long ago given up on runs into the CBD each day in their preference for telecommuting from their home computers. The extensive revamping of the city’s motorway network, completed in 2013, is now largely a tarmac wasteland; and down in the center of town apartment buildings that sprang up at the turn of the millenium are decrepit and leaking wrecks — the last refuge of the homeless and those who couldn’t afford land in the suburbs or outlying districts.

Such a scenario may sound outlandish, and perhaps it is, but according to a growing number of energy analysts we’re in danger of living the dream-turned-nightmare. Oil, you see, is running out. The ubiquitous black gold that permeates our daily lives in everything from shampoo and soap to pharmaceuticals, pens, computers, telephones and cars, is getting harder and costlier to extract from the ground. On this much virtually everyone, even the skeptics agree.

What they do not agree on is when it’ll happen. «In the next three years,» argues author and researcher James Howard Kunstler in a recent interview with Grist magazine in the US, «we are going to be feeling the pain. Our lives are going to be noticeably beginning to be disrupted. In the next ten years, you will see the beginning of a major collapse of suburbia.»

New Zealand is a country heavily reliant on oil. Our ability as one of the world’s leading agricultural producers, hinges on not just fuel for transport, but oil by-products as fertilizers.

According to Kunstler, rising fuel costs will force cities to grow their own food literally in household backyards and farms on the back doorstep. Many people, he says, will find their lifestyles change to accommodate a necessary grow-your-own component. Prices for lifestyle blocks and large city sections will soar, while prices of apartments will plummet.

Although Kunstler was speaking to an American audience, there are those in New Zealand like the Green Party, who hear his warnings.

These are strange and confusing times we are living in, even from a Shakespearian perspective. For in one parliamentary corner we have the Green Party telling us that “peak oil” is a Fee-Fi-Fo-Fum giant stomping towards us that we must prepare now for, while in the other, our governmental masters have been steadfastly retaining a business-as-usual approach.

Even the media cauldron has been bubbling away furiously on the heat of contradictory messages. While TV3’s Campbell Live painted peak oil as a threat to civilization as we know it, other mainstream sources have been portraying it as much ado about nothing. For instance, The Dominion Post’s feature on the 21st January this year concluded with quotes from a Danish statistics professor, Bjorn Lomborg, who claims, «We have plenty of oil. We will find more when it’s necessary to do so, but we don’t need to now.» Similarly, Newstalk ZB host Leighton Smith insists on air that «there’s plenty of oil» and the impending oil crisis is «a media beat up,» and to top it off, resource management expert, Owen McShane wrote in the New Zealand Herald on the 15th April, «We should take no notice» of the Green Party warning.

Is this matter of peak oil really much ado about nothing and our Green Party exaggerating its significance as a ploy to garner election votes and reduce vehicle emissions? Or are these skeptical media sources misinformed?

Nelson-based geologist Alan Hart, who has worked on the frontline of the oil industry for 30 years believes that the ramifications of this final oil crisis will be very serious indeed and our media has fundamentally failed to alert people to the realities of what lies ahead. Born in Texas in 1951, he graduated from the University of Texas at Arlington with advanced degrees in petroleum geology in 1974 and 1979, and has worked for several oil companies, including the 7th largest US petroleum company, ARCO. Since 2002, he has been on the board of directors of Canadian company, TAG Oil, which is concentrating on exploration efforts here. He says: “These journalists and radio hosts are entitled to their opinions and can denigrate spokespersons like myself all they want, but I personally know that peak oil will arrive in 2 or 5 or 10 years. From that point on, the world as we know it will be changed unless the global community meets it head on and begins its preparations now.”
The act of taking oil from the ground is called producing it. Since the start of oil production in the nineteenth century, the world has produced about half of its ultimately recoverable oil resource. At the halfway point, the world will achieve what is referred to as its production peak — more oil will be produced in a year near the halfway point than ever before — or thereafter. This is what is referred to as peak oil.
There are varied opinions regarding when peak oil will occur. Dr Colin Campbell, a petro-geologist who is perhaps the world’s foremost expert on predicting oil trends, calculates that it will occur in 2006. Dr Campbell, who was conferred with a Ph.D. from Oxford University and has held prestigious positions within oil companies, is currently the convener and editor of the Association for the Study of Peak Oil (ASPO) and a Trustee of the Oil Depletion Analysis Centre in London. He told the Guardian in late-April 2005 that about 944 billion barrels of oil has thus far been extracted, some 764 billion remains extractable in known fields or reserves, and a further 142 billion of reserves are classed as ‘yet-to-find’, meaning what oil is expected to be discovered. He said if this is so, then the overall oil peak arrives next year — with unpredictable and perhaps drastic consequences for the world, (refer http:www.peakoil.net).

Optimists focus on the figures and assume that just because the production peak has arrived doesn’t mean that oil is under imminent threat. But Campbell and Kunstler argue the petro-optimists are missing the point.
“We don’t have to run out of oil or natural gas to have severe problems,” says Kunstler. “All you have to do is head down the arc of depletion on the downside of world peak production.”
Energy Minister, Trevor Mallard told Investigate that in the Government’s view peak oil will occur sometime between 2021 and 2067, with “probability highest around 2037.” The source for this view is the Bush administration’s Energy Information Administration. Tellingly Mallard conceded: “I stress that other estimates abound, and that I’m not claiming that this is the right one, but it’s in our view the best estimate we have to work to for now”.
The Government is between a rock and a hard place and can not reveal the truth, for if it did, its economic cards would come tumbling down — the healthy economic outlook would be exposed as a fraud. The man who just purchased a new $65,000 gas-guzzling SUV on hire purchase would think the bottom had dropped out of his world and the young couple who’d just built their dream home an hour’s drive from their work places, where there was no alternative but to drive, would be gutted. It’s far simpler for the Minister to use smoke and mirrors to provide an illusion of a rosy future, which allow for the continuance of current trends over the coming years, rather than to tell it like it is.
Offers Green Party co-leader, Jeanette Fitzsimons on the day she launched the Green Party energy policy: “The Government should acknowledge that peak oil is closer than they’ve been admitting. Even the International Energy Agency, which was until recently saying 2037, and whose advice the Government takes, is now saying 2013-2037. Pretending there’s nothing to worry about yet is just lulling people into a false sense of security.”
It’s like booking us to go First Class on the Titanic and moving all the furniture towards the end that will sink first.
Like Mallard, National’s leader, Don Brash does not wish to tackle reality head on either. He said on April Fool’s day that a National-led government would put every dollar of fuel tax into roads. That would mean an extra $2.1 billion over the next six years for roading and at the same time legislation would be changed to make it quicker and easier to build new roads.
But while National may be making political inroads on Labour, and while the economic growth from road-building would normally be a boon, there’s a growing sense in the wider public that wasting tax money on tarmac when oil is running out might not be such a bright idea, despite the frustration of sitting in traffic jams.
It is significant that peak oil is getting much more coverage in the international media than it is in New Zealand’s daily press. But this will change.
Ordinary people are waking up to Peak Oil, thanks largely to word of mouth and the internet. One who ascribes to this view is Waikanae builder, Robert Atack. For over 6 years, this outstanding 47-year old has been informing people about the impending oil crisis, which he, like some experts in world energy studies, believes it will have a catastrophic impact on humanity, an impact which could be lessened if we start our preparations now.
He has spent $9,000 from his own pocket and allocates around 2-4 hours a day performing this community work, which he and many others believe the Government should be doing. He’s been distributing leaflets, CDs, DVDs, videos and books, which carry information from experts of Dr Colin Campbell’s ilk to members of the public and parliament. “During the last term of government I had 10,000 copies of The Oil Crash And You printed and sent about 5 copies each to all 120 MPs. And I’ve sent a lot of e-mails — and I think probably most of the current government have had something sent to them,” offers Atack.
Not known for social niceties, the effusive Atack called Trevor Mallard “a gutless public trough feeder” in a mail drop to his home letterbox in 2002 so doesn’t blame the Minister for shouting at him the last time they spoke. Says Atack: “Trevor Mallard’s been in denial. Any official reply I’ve seen from his office since he became Minister of Energy is just the regurgitated rubbish Pete Hodgson’s secretary sent out, who became Mallard’s when he took over the job of Minister of Energy.”
The cold shoulders from politicians and lack of interest shown by members of the public have at times made his exploits seem like those of Sisyphus, until this year when the tide turned. Investigate broke the story in New Zealand in February 2004. Since then, the Green Party highlighting the peak oil threat, the petrol price jolt and the TV3 Campbell Live show on March 22nd have continued to raise public awareness. The number of hits to Atack’s website, oilcrash.com, after the Campbell Live show soared to 70,915, up from 9,883 of day before, plus there were 53,376 hits the following day. The number of people around the country educating the public about peak oil has grown. From a community perspective, Nelson is streets’ ahead of others says Atack. Although Nelson City Council recently backed away from a proposal to begin an investigation into likely consequences of peak oil for the district, the word about what peak oil will mean for our future has been spreading like wild fire throughout the people. This has been across all ages, and being helped to ignite from groups of “peak oil aware” youths over 4 Nelson colleges who have been encouraged to inform other young people.
It’s not only the Green Party that will be talking about peak oil in the lead up to the general election, but also the Maori Party. “They seem to genuinely want to inform people out of concern, which I’ve found is the main motivation for most of us peak-nicks,” says Atack.

If you want evidence that the oil industry really is in dire straits, there is a myriad of signs that can’t be denied. According to Hart it is an industry virtually working at full capacity now. It’s being pushed to its limits. He can tell by the number of oil tankers travelling around, the number of seismic vessels gathering seismic data for oil companies, as well as from the number of oilrigs in use. At present, the world can produce about 84 million barrels of oil a day at the most. Over 82 million barrels per day are being used at present and there’s an increasing demand for more. The world economy grew by 5.1% in 2004 — the fastest in nearly three decades. Among the leaders was China, (that has about 1.3 billion inhabitants), expanding at 9.5 %, Argentina at 9 % and India at 7.3 %, (that has around 1.08 billion people). Projections for the fourth quarter of 2005 indicate that 86 to 87 million barrels of oil a day will be required and this won’t be met. Although the biggest oil companies, ExxonMobil, ChevronTexaco and BP talk about there being “plenty of oil” and being able to produce more, their production figures are actually going down every year.
While the oil industry can function well at the moment, it won’t in the imminent future. Compounding the oil availability problems is that for the last 20 years the industry has failed to attract enough new personnel. The principal reason for this being that many of the graduates needed opted for the computer business instead, as the widespread downsizing and company mergers led people to perceive the oil industry as a beast in its death throes. As perhaps it is.
Managing editor of the Oil & Gas International journal, Dev George, writes in the May 2005 issue: ‘It seems as though every major petroleum industry conference these days has at least one session devoted to bemoaning the critical shortage of new blood, the lack of young professionals — engineers and geologists and geoscientists as well as business and industry generalists — entering the industry.’ Hart says the lack of young blood coming through the ranks spells doom for the oil business, because the ability to successfully locate and drill for oil is highly dependent upon having an employee base with extensive work experience.
“In 1985, the average age for a member of the American Association of Petroleum Geologists was 38. The average age last year was 53. This shows that at this critical time when the industry really needs experienced employees, they won’t be there. It is really a dreadful situation we face,” offers Hart despondently.
The American Association of Petroleum Geologists has been providing videos and encouraging its 31,000 members to speak in public forums about the possibility of future oil shortages for the past 15 years. Hart began making presentations to various civic and business groups in New Zealand several years ago in an attempt to alert the public to the coming end to cheap oil, but finds it difficult to disseminate the message because the public is chiefly “unbelieving.”
Some people think that “peak oil” is nothing but evidence of a greedy oil industry trying to talk up the oil price. This is not so, says Hart: “Why would the industry manipulate prices so high that they drive away the very customers that are required to keep them in business? The last thing the oil companies want to see is a chaotic global event [peak oil] that destroys their carefully cultivated consumer base. If there was anything the producers — especially OPEC and petroleum companies could do the slow the price juggernaut, believe me they’d be doing it now, not tomorrow.”
At the end of 1999, oil was trading for around US$10 a barrel. Since then it has risen by about 29% per year. Simply extending the trend means that oil will be at about US$100 a barrel in 3 years and US$160 in 5 years. While such a rise won’t impact on the lifestyles of the very wealthy, it could those on low incomes, who may have no option but to alter their way of life.
Hart says it’s the plight of his own 4 children that motivates him to inform the public about peak oil, because while he can educate them on the impending oil crisis, without the cooperative efforts of the rest of the community and nation, their entire livelihood is threatened by the coming dilemma.

Dr Peter Ballance, formerly Associate Professor of Geology at Auckland University, specialized in sedimentary and oil geology and holds a Doctor of Science from the University of London. He contends that the threat of peak oil should be taken very seriously. “It’s a physical fact. One which we may reach this year or in 10 year’s time,” he warns.In regard to whether commentators such as Leighton Smith and Owen McShane are correct in claiming that there is plenty of oil, Dr Ballance states: “People who say there’s plenty of oil are right in one sense, but in the sense of plenty of the ideal oil, they’re wrong. Much of that remaining oil will be in tar sands, oil shales, deep-sea locations and Arctic locations. All of that’s very expensive and environmentally damaging to extract.”
McShane’s logic is worth following just to illustrate where it falters. The peak oil skeptic writes: “Although the wells are distant, refining is complex and fuel is subject to huge taxes, the petrol powering your car is cheaper than a litre than most bottled water — including New Zealand water.”
He’s right as far as he goes. But if the inference readers are supposed to draw is that oil will stay plentiful because it is cheaper than bottled water, McShane is in for a shock.
The cost of oil is not the real issue. The availability of oil is. It is currently cheap because we are extracting fuel from easy fields whose technical infrastructure was put in place and paid for decades ago. When those fields, sooner rather than later, prices will rise.
It is commonly suggested that technological advances will play a role in finding meaningful quantities of more oil. Unfortunately, according to Hart, while technology has and will continue to enhance the oil industry’s ability to locate significant new accumulations of petroleum, it cannot compensate for the huge amounts of cheap oil we are chewing our way through.
“Anyone who believes that technology will “save the day” like the plot of a Hollywood blockbuster is not facing up to reality. Technology alone cannot replace the amounts of cheap oil [less than US$10/barrel to produce] we are currently consuming on a global scale. It’s going to take a conservation effort too,” he asserts.
On ACT’s weblog, RodneyHide.com, one blogger summed up the mood of many ACT supporters by suggesting that oil depletion was not a concern because “the market will take care of it and develop new alternatives.” Such wishful thinking, whilst also correct to a point, still ignores the reality that markets rely on plenty of advance warning and new discoveries, not magic wands, and that if another chemical existed that could replace oil as a fuel, or in plastics or any of the other myriad uses for oil, we ought to know about it by now. And we don’t. And on a worst case scenario those “markets” may only have another five years to find the mystery new alternative, test it and produce it.
Yes, solar power can help reduce some of the dependence on oil, but currently we use oil to create solar generating capacity. The power and telephone lines into our homes are manufactured from oil. Computers are dependent upon oil. Many pharmaceuticals and health products require oil. For markets to truly “take care of it”, planning has to begin immediately.

Some still refuse to face the possibility of a world with less oil, however — like those who believe Thomas Gold’s theory that oil is abiotic. This theory, which appears to have many followers, judging by the profusion of Internet pages devoted to it, proposes that oil is being produced within the mantle of the earth, from where it continually moves upward, to provide an unlimited supply. Dr Ballance says that sadly there is no substance to Gold’s theory. “It’s one of the many myths on which people build hopes,” he says. Correspondingly, Hart says the theory of abiotic oil is like clutching for straws, while he’s out gathering the wheat.
Although the oil industry has repeatedly proven that oil is biotic, meaning that it is derived from the degeneration of organic plant and animal remains from which the carbon molecules have been converted to complex hydrocarbon molecules through pressure and time, the Gold theory has retained many believers for a number of reasons.
There are genuine accounts of oil wells refilling and drilling at levels deeper than 10,000 meters, which some say is evidence that has supported Gold’s theory. It does not however on close inspection. Dr Ballance says the reason the wells have been refilling is not because oil is being magically produced deep within the earth — it is because oil moves through permeable rocks in response to a pressure gradient. It can continue to move after a well has ceased to provide economic quantities of oil. Thus, it’s to be expected that old wells will in some cases, refill with oil, but in no where near the quantities that will make any difference to a world that uses over 82 million barrels a day.
Likewise, the drilling beyond 10,000 meters does not lend support for the abiotic theory either because when hydrocarbons are subjected to the temperatures and pressure that exist below 9,000 metres, they are generally destroyed says Hart.
Former industrial chemist Kevin Moore, who has an Honours degree in chemistry from the University of Surrey, has studied the abiotic theory and says its proponents are asking us to accept a process that defies the laws of chemistry. “Until the proponents of abiotic oil present a plausible theory, and they’ve presented none to my knowledge, it’s just junk science,” says Moore.
The deepest bore to date was drilled by Russians in the Kola Peninsula to 12,262-meters from 1970 to 1994 and cost more than US$250 million. However, it was not drilled in order to search for oil or natural gas, but to study the nature of the earth’s crust. “While there’s no ultradeep oil except in a couple of unusual fields, there is ultradeep gas in many places. No matter where people get their information from, they can be assured that petroleum is not generated in the mantle. And if Russia which passed peak production in the late-1980’s, has all of this deep oil, why isn’t it selling it on the world market?” queries Hart.
In times like ours when relentless changes can leave one feeling that one is trapped on the mouse wheel of consumerism, it’s not surprising that there’s resistance to acknowledge that the substance that we’ve built our lives upon, oil, is itself not unlimited.
Thus far, the only countries that have made serious preparation for peak oil have been the United States and the United Kingdom, who are using the excuse of terrorism to invade countries with large remaining oil reserves and ensure they are in control of that oil. Obviously, this is not an option for New Zealand. According to Green Party co-leader, Jeanette Fitzsimons, whom it has been suggested could be the Energy Minister in the next coalition government, what we should be doing now is a thorough analysis of each sector of the economy to understand how vulnerable it is to oil prices and shortages and what can be done. For example, can our food be grown closer to where it is eaten? How do we maintain soil fertility without nitrogen based fertilizers — which are made from fossil fuels?
Fitzsimons argues that we need to invest now in expensive infrastructure that will be hard to afford when oil is expensive — like rail, wind turbines and solar technologies. We need to stop the import of gas-guzzling vehicles and allow in only the most fuel-efficient. “There’s a lot we could do now to make it easier to cope later, but we need to act. There is no room for either fatalism or complacency,” she asserts.
At present New Zealand has 3-5 oil and gas fields being developed and 12 producing fields, which supply only about 7% of the oil we consume, and this is declining each year. We are competing against the world for a limited amount of liquid energy. As long as oil demand outstrips the industry’s ability to supply oil, the prices will continue to rise. When global oil production does peak, and it soon will, the disparity between demand and supply will continue to grow and the situation will so worsen. It’s not a case of if, but when. Hope and pray all you wish that gigantic new sources of petroleum will be found tomorrow, but if the majority of people working in the petroleum industry are correct, this won’t happen and continuing our gas-guzzling ways is only going to add to an already critical situation.

Investigatemagazine.com July 2005


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