CounterPunch

By RICHARD HEINBERG

Over the past few months controversy has raged over the timing of Peak Oil: the moment when global oil production will reach its all-time maximum and begin its inevitable descent.

Oil optimists say the event won't occur for twenty years or more, and that market forces will result in an imperceptible transition to alternative forms of energy. "The Stone Age didn't end for lack of stones," say the optimists, "and the Petroleum Age won't end because we run out of oil"-but because we find something better and cheaper with which to fuel our society.

Pessimists point out that global oil discoveries have been plummeting for decades and that supply and demand are now closely matched (hence the run-up in oil prices over the past few months); moreover, there simply isn't an alternative energy source available that can take oil's place in the near term. They say we may be at peak now, and that the consequences will be staggering.

In short, oil pessimists spin out end-of-civilization scenarios while optimists insist that there is nothing to worry about.

Evidently the US Department of Energy is interested enough in the Peak-Oil debate to commission a report on the subject. Released in February this year by Science Applications International Corporation (SAIC), and titled "Peaking of World Oil Production: Impacts, Mitigation and Risk Management," the report examines the likely consequences of the impending global peak. It was authored principally by Robert L. Hirsch (bio: www.d-n-i.net/fcs/hirsch_bio.htm), and is as remarkable for its subsequent reception as for its content.

The report's Executive Summary begins with the following paragraph:

The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.

The report's authors were not asked to assess when the global peak is likely to occur; however they do survey the range of forecasts from optimists and pessimists alike, projecting a peak date anywhere from 2005 to 2037.

The Hirsch report examines three scenarios: one in which mitigation efforts are not undertaken until global oil production peaks; a second in which efforts commence ten years in advance of peak; and a third in which efforts begin twenty years prior to the peak. Each scenario assumes a "crash program rate of implementation." In the first case, the study concludes that peak will leave the world with a "significant liquid fuels deficit for more than two decades" that "will almost certainly cause major economic upheaval"; even with a ten-year lead time for mitigation efforts government intervention will be required and the world will experience a ten-year fuel shortfall. A crash program initiated twenty years ahead of the event will offer "the possibility" of avoiding a fuel shortfall. The report emphasizes repeatedly that both supply- and demand-side mitigation options will take many years to implement and will cost "literally trillions of dollars"; it also notes that "the world has never faced a problem like this."

The Hirsch report concludes that substantial mitigation of the economic, social, and political impacts of Peak Oil can come only from efforts both to increase energy supplies from alternative sources and to reduce demand for oil. With regard to the claim that efficiency measures by themselves will be enough to forestall dire impacts, Hirsch et al. note that, "While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required." Further, "Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large." Hirsch, et al., also point out that "The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance."

Oil optimists often say that efforts aimed at mitigating the effects of Peak Oil undertaken too soon would entail a cost to society. The SAIC Report agrees. However, it concludes that, "If peaking is imminent, failure to initiate timely mitigation could be extremely damaging. Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive than delayed mitigation."

Optimists also insist that the market can take care of the problem: high oil prices will stimulate more exploration, the development of more efficient cars, and the deployment of alternative energy technologies. Interference with market mechanisms would be harmful, they say, and so the government should steer clear of the problem by avoiding setting higher efficiency standards, subsidizing renewables, and so on.

The report's authors dismiss these claims. Price signals warn only of immediate scarcity; however, the mitigation efforts needed in order to prepare for the global oil production peak must be undertaken many years in advance of the event. Hirsch, et al., maintain that, "Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy."

Here, then, is a significant report produced by an independent research company for the US Department of Energy, warning of a global problem of "unprecedented" proportions with economic, social, and political impacts that are likely to be extremely severe. The authors forecast "protracted economic hardship" for the United States and the rest of the world. It is a problem that deserves "immediate, serious attention."

Yet, half a year after its release, the Hirsch report is nowhere to be found. For several months it was archived, in PDF format, on a high school web site (www.hilltoplancers.org, Hilltop High School in Chula Vista, Calif.). On July 7 the report disappeared from that site. The Atlantic Council (www.acus.org) is considering publishing the Hirsch report; however there is no projected date of release. When contacted, Dr. Hirsch replied that the document is "a public report, paid for and released by DOE NETL, and that it therefore could be reposted at will." Project Censored has now posted the report in full.

If the content of the Hirsch report is to be believed-and there is every reason to think it should be-then this is a document that deserves the close attention of every leader of government and industry in the US. Newspapers and newsmagazines should be running excerpts and summaries. Instead, there is nearly total silence. In late May Robert Hirsch presented the substance of the report at the annual Workshop of the Association for the Study of Peak Oil (ASPO) in Lisbon, Portugal to an audience of about 300 (www.cge.uevora.pt/aspo2005/abscom/Abstract_Lisbon_Hirsch.pdf). That event received virtually no press coverage in the US.

Meanwhile oil is hovering around $60 and is likely to head higher, and analysts look to the fourth quarter of 2005 unsure whether supply will be able to keep up with burgeoning demand.

Richard Heinberg writes for the Museletter. He can be reached at: rheinberg@igc.org