Sun, Apr 22, 2007 - Page 18 News List

Well, are the oil wells running dry? It's a question of when, not if

The debate about whether an oil crisis is looming continues to rage with Duncan Clarke taking David Strahan's apocalyptic with a pinch of salt

By Larry Elliott  /  THE GUARDIAN , LONDON

The Battle for Barrels
By Duncan Clarke
256 pages
Profile Books

Back in 1956, an American geophysicist called Marion King Hubbert came up with a startling prediction: that production of oil from the continental US would peak within the next 10 to 15 years. Few paid any attention. This, after all, was the era when the car was king and king-sized; when James Dean was racing in the streets in Rebel Without a Cause and former US president Eisenhower was investing billions of US dollars in the interstate network.

Yet Hubbert's prediction proved unerringly correct. Peak oil — as it was known — duly arrived right on cue in 1970, and since then the US has become more and more dependent on imported crude to meet growing demand for energy. There was, however, another dimension to Hubbert's analysis. The same model, he said, could be used to estimate when peak oil would arrive, not just for the US, but for the entire globe. That moment, he said, would come in about half a century; round about now, in other words.

Hubbert's many champions have used his work to construct a theory of just about everything. Peak oil explains why oil prices are so high; it explains why US President George Bush invaded Iraq and why there is a new scramble for Africa. As the world's oil wells start to run dry, there will be recession and war. After a century or more in which modern industrial societies have been built on seemingly unlimited supplies of oil, the lights are about to go off.

In The Last Oil Shock, David Strahan argues that we ignore the warnings at our peril. Modern industrial societies, he says, are dependent on oil, but over the past 50 years it has become evident that all the big fields have been discovered. Oil companies are busily exploring inhospitable parts of the globe and using the most up-to-date technologies to extract more crude from existing fields, but sooner or later we are going to have accept the inevitable: supply will be unable to keep up with demand.

Even worse, Strahan sees no possibility that alternatives to oil will be developed in time to prevent a full-scale economic crisis. The Last Oil Shock dismisses the idea that we can move seamlessly into an age of hydrogen-powered cars, biofuels and wind farms. Instead, we all need to be changing our lifestyles: buying smaller cars, driving less aggressively, taking our rucksacks to the shops to avoid using plastic carrier bags, spurning apples that have been shipped halfway round the world.

Duncan Clarke's The Battle for Barrels says we should take warnings of impending armageddon with a pinch of salt. The peak oil theorists take an overly deterministic view of the world, he argues, and far from being imminent, peak oil may be decades, perhaps even a century, ahead. His argument is that it is far too simplistic to extrapolate, with any degree of precision, when the world will reach the point of maximum oil production from Hubbert's 50-year-old study of the US.

Clarke, who has 25 years of experience in the oil exploration business, says the flaw in the peak oil argument is that it ignores the basic rules of economics: that when the price of something goes up, either supply increases or demand falls. It doesn't make financial sense to explore particularly inhospitable parts of the world when oil prices are US$10 a barrel; but it is quite a different story when a barrel of crude is changing hands at US$60 a barrel.

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