Aftermath of the Age of Oil—Can Industrial Countries Survive?
Business + Economy

Aftermath of the Age of Oil—Can Industrial Countries Survive?

Dire predictions of low supplies may cause global turmoil

Oil is the backbone resource of industrial society, but the Oil Age will come to an end, someday. The pessimists say the world reached maximum oil production in 2008. Middle-of-the-road optimists say peak oil won’t occur until 2030. Either way, production is already past its peak and on a terminal decline in 54 of the 65 largest oil-producing countries in the world, including Mexico, Norway, Indonesia and Australia. It’s been declining in the lower 48 states of the United States since 1970.

What will happen when cheap oil is no longer available and supplies start running short? In an interview, Jörg Friedrichs, a lecturer in politics at the University of Oxford, examines how different parts of the world would likely react to a peak oil scenario. His examination of the global energy crunch was published in an issue of Energy Policy.  A shortened version of it can be viewed online.

Q: In your study, you ask, “What is likely to happen if peak oil occurs?” When do you think that will be?

Jörg Friedrichs (JF):  This is a question for geologists, engineers and possibly economists, some of whom believe that the world has reached the peak of the Oil Age, or is about to, in this decade.  My question instead is, “What if?”  I see this as a social scientific research challenge.

Q:  Why do you think the U.S. would cynically choose “predatory militarism” in the face of future resource shortages?

JF:  Why compete for a scarce but vital resource in markets when you have a military option?  Why negotiate with people like Hugo Chávez if you have a military stick?  We have sometimes seen this pattern in the past, and we are likely to see it more often after peak oil. 

Q:  What about China, another country heavily dependent on oil imports?

JF:  China would be more desperate than the U.S. because their access to foreign oil is militarily less secure.  But they would also be less tempted: Their navy and air force is no match for the U.S. The Chinese military could hardly control the shipping lanes from Angola to China, or even in the Straits of Malacca.  But they may perhaps be tempted to launch predatory military operations in Central Asia.

Q:  What would other entrenched dictatorships likely do if their imports of oil were severely reduced?

JF:  When the Soviets stopped delivering subsidized oil to foreign “comrades,” the North Korean elite basically screwed its own population.  Elite privileges were preserved, while hundreds of thousands of ordinary people starved.

Q:  You offer a third, less shocking scenario, one in which “local solidarity” and urban “self-help” agriculture gets people through a period of severe fuel shortages, as in Cuba after the collapse of the Soviet Union. What countries might take this route?|

JF:  The Cuban experience offers an interesting contrast to what happened in North Korea. Despite a similar crisis, there was a period of considerable hardship, but no mass starvation. This was possible because, unlike North Korea, Cuban society preserves a lot of social glue and traditional knowledge.  Developing countries are more likely to be in this category than developed countries. 

Q: Why don’t you think the West would be a good candidate for “local solidarity”?

JF:  After several generations of individualism and affluence, Westerners will have a hard time accepting that they need to rely on communities and must revert to a sustainable lifestyle.

Q: What about Europe?

JF:  Unlike the U.S., Europe is not a particularly promising contender in case of a military scramble for resources. And unlike North Koreans, Europeans are not likely to accept a totalitarian “solution” to the problem of how to slice up a shrinking pie. After peak oil, probably the best hope for Europe is populist regimes that might mobilize residual national solidarity to weather the crisis. Western Europe has invested more in energy conservation and sustainable energy than any other part of the world; and railways offer a fallback position for transportation that is not available in most other places.

Q: Why do you dismiss the possibility of a smooth transition from oil to other sources, such as solar and wind power or a new, improved generation of nuclear reactors?

JF:  I do not dismiss this possibility. The ideal solution would be to electrify everything from road traffic to heating systems, and then produce electricity with whatever energy source is available. Such a technological fix would take a lot of time and investment. Unless the energy descent after peak oil is very smooth indeed, there may simply not be enough time. Alas, technological crash programs are much more difficult under crisis conditions.

Q: You say that coal would become a more important energy source for at least a couple of decades, with dire consequences for the climate. What about clean coal and other technological innovation?

JF:  Most clean coal technologies, as well as many other innovations, are currently at the experimental stage.  Clean coal technologies, such as carbon capture and storage, require energy and thereby reduce efficiency. You basically siphon off energy from productive purposes to reduce carbon emissions. 

Q: After peak oil, how does the world realign itself? Which countries come out on top?

JF:  If the criterion is the ability to gain military access to energy resources, then I’d say the U.S. If it is the capacity for peaceful adaptation, then I’d look at developing countries that are not too overpopulated. If the criterion is political stability, then countries with a recoverable authoritarian tradition are likely to work better than liberal democracies. This sounds like a dismal criterion, but stability will be highly valued in times of crisis when entire countries fall apart.

Q: What happens to global oil corporations such as Exxon and Shell?

JF:  In the transition, they are likely to lose further ground to the state-controlled companies of oil exporting countries such as Saudi Aramco or the Nigerian National Petroleum Corporation. As a consequence, even oil importing countries would increasingly rely on state-controlled companies. This is already happening in the case of the China National Petroleum Corporation.

Q:  Instead of collapse, you forecast a “slow and painful” adjustment to peak oil, lasting a century or more. Is there anything people can do right now to prevent that from happening?

JF:  There is a difference between slamming into a brick wall and crashing into a haystack. Peak oil is not likely to be a haystack, but it doesn’t have to be a brick wall — if, that is, people take appropriate measures to prepare themselves and smoothen the descent.

This article originally appeared in and has been adapted for The Fiscal Times. Copyright 2010 Used by permission.

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