With Egypt firmly at the top of the World News agenda last week (and rightly so), another story which could in fact have huge consequences for the Middle East and indeed the whole global economy, was somewhat overshadowed.
The story originated from Wikileaks, and whatever your thoughts and opinions on such releases, the facts laid bare in this one are cause for concern.
Here in the UK The Guardian’s John Vidal wrote a piece entitled Peak oil: We are asleep at the Wheel which was one of many that appeared last week. Here’s the synopsis..
The latest batch of leaked cables report the views of Sadad al-Husseini, a former board member of the national oil company Saudi Aramco and a geologist who headed exploration and production for the company from 1986 to 2004. In a nutshell, Al-Husseini told some US officials that Saudi Arabia was not able to keep up with global demand. That demand is expected to reach 12 million barrels per day. He said that the kingdom might get to 12m barrels a day given 10 years, but before then – perhaps as early as 2012 – global production would have hit the highest level it ever will, and given that demand won’t be abating by then given levels of economic growth in China and India, the oil price will soar.
Oops! Now this basic story is nothing new. Peak Oil as it is known has been hotly debated for some years now, with wildly fluctuating estimates as to when the fateful day will be (or has already been) reached when global oil production starts to decline. It’s almost impossible to predict. Early efforts at prediction didn’t take into account new advances in oil recovery techniques, but then to counter that, who could have predicted the rise of China, India and other Asian economies and their new demand for oil? But what does Peak Oil mean for us?
Firstly, peak oil is not a “theory.” Because oil is a finite resource, it is an inevitability, a done deal at some point. The argument is all around the timing. If and when it turns out that it is clear that we have reached peak oil, then oil prices will spiral out of control as the world struggles to secure it’s supplies. The UK for instance is particularly vulnerable because it has gone from being a net exporter of oil, gas and coal to being an importer, and is becoming increasingly exposed to competition for supplies. The problem is that and oil price leap will affect much more that the price at the gas pump. It’s likely that energy prices will rise significantly, along with the price of many things that rely on oil for manufacture such as chemicals and many plastics. Here are just fifty things that are made from oil.
Of course in the IT world we are pretty well exposed to this threat. We rely on plentiful energy at a reasonable price, and many of our basic tools of the trade rely on oil for manufacture (think motherboards and cables for a start!). So what can we do?
Weather you believe that peak oil has arrived or not, it will one day. So we all need to do more with what we have left, use less and start to think about a future without oil in our lives. 1E technologies are all about reducing waste and increasing efficiencies which is an important step down the post-oil road.
Surely it’s best to use what we have left to transition to an oil free future rather than argue until it’s all gone? And it can be done, as I will explain in my next piece later this week. Until then, think about your next car journey – is it really necessary?