Post-oil era – how will humanity look like?
by Eyal Zucker
Energy is not only a natural resource, it’s a social and a cornerstone in the shaping of modern industrial society. Recognition in that may lead to an understanding that solving the problem of ‘black gold’ is not looking for replacements, but a deep change of our priorities.
On 12 July 2008 the world market oil price rose to 147 dollars a barrel, an all time record. Two months later, on 15 September of that year, U.S. investment bank Lehman Brothers collapsed, an event that marked the beginning of a global economic crisis, which we are still deep in. This is not a coincidence. Economic stability has always been influenced by major oil crisis’s. After the oil crisis in 1973 and 1979 when the previous high oil price records were set – the global economy found itself in a deep and prolonged recession.
Are we experiencing another oil crisis? The answer is probably yes. Between the years 2003 to 2008 oil prices rose steadily by hundreds of percent and remained high even today. However, while the oil crises of the 70s were owed greatly due to geopolitical events in the Middle East that created great public resonance, the current crisis apparently has no such connection, so few are aware of it at all. What then causes the crisis and what are expected to be the consequences?
Supply is not catching up with the demand
Significant economic growth over the previous decade, especially in East Asian countries, greatly increased oil demand, when supply can not catch up. World oil production is currently approximately 89 million barrels a day, when demand for oil is expected to arrive in 2012 to 90 million barrels per day and beyond.
However, despite pleas and pressure from the United States and President Barack Obama himself, the major oil exporters fail to boost productivity. The reason for this is that there is a geological constraint on global oil production capacity, which apparently is reaching its peak. Productivity of existing fields is diminishing, while simultaneously pumping cost is more expensive. As new discoveries are not enough to cover the growing gap between supply and demand, oil prices jump.
That does not mean that the Earth’s oil is running out – proven reserves are still very large in scope, but there is not enough supply of oil available and cheap enough to feed the growing global economy and thirst for fuel. Therefore, the immediate impact of the oil crisis is a deep economic crisis and widespread, that we experience today.
Oil is the basic raw material in all branches of production and the demand is solid. You cannot currently produce and transport any product without the use of oil. Rising costs makes it difficult for the industry and companies in the economy to continue to grow over time, resulting eventually in collapse and a chain reaction throughout the global economy. It brings today most of the industrialized countries to a hopeless situation, when they experience recession and high unemployment on the one hand, and inflation in the prices of other farm products.
Desperate finance ministers, bank governors and economists are trying to use every means at their disposal to halt the deepening crisis, but to no avail – as it was not a monetary crisis but a crisis concerning the limited Earth resources, exploited to the limit.
There is no telling how widespread and dramatic consequence of the oil crisis, although the events of the past year alone can be used as an indicator of the future. First, shrinking economies and a decline in global trade, a jump in unemployment, inflation of prices, riots and social unrest strongly undermines the foundations of government. Even in countries such as Britain, Spain and the United States, bankruptcy of states and regimes to fall into anarchy.
How then can we deal with the oil crisis? First you must of course recognize it. Dominant discourse among economic leaders and decision makers still prefer to ignore the facts, claiming that there’s more than enough oil for use by future generations.
Revolution on the way?
Solar energy domain has been stuck for a long time, despite government promises. Although oil accounts for only 40% of the world’s fuel basket, the share in the transportation sector is more than 95%. This is because the global vehicle fleet – now numbering more than 800 million passenger cars and commercial vehicles – and the airline and shipping industries, based on internal combustion engines, there is no substitute for oil.
Even though renewable energy such as solar and wind – which occupies a central place in the future global energy market, can not replace oil, because it does not supply liquid fuel source to generate electricity. However, a future scenario in which a fleet of electric vehicles is supported by electricity generated by renewable energy is certainly possible.
But despite the huge investment and technological progress in recent years, the amount of energy produced in these sources is still negligible, and it seems that this solution is not a significant scale application in the coming years. At the same time, various chemical processes allow to produce synthetic liquid fuel replacement for coal or natural gas. However, this is the most polluting processes and the amount of energy resulting is little energy in comparison to the investment it requires to produce it. Therefore it is not expected to take a significant role in fuel generation in the global energy economy.
Post-oil era
During hundred and fifty years – a very short period in historical terms – oil changed fundamentally the face of humanity, and of course it became addicted to it. Since oil in itself has no substitute, the global economy will have to undergo a sharp and painful withdrawal, which will be reflected in a change in lifestyle and quality.
Just as it was impossible to predict the depth of the oil’s influence on human society as it started using it, it’s hard to know how to adjust to a life in modern society with declining supply of oil. Obviously people will not return to the caves, but there is no doubt that they will apply far-reaching changes in the structure of government and economic systems in the world. The onset can be seen today – the far-reaching social changes in Europe and the US, the revolutions in the Arab world and economic processes experienced by European countries.
After an era of unprecedented wealth humanity has enjoyed, we are in transition to post-oil era. The oil crisis can not be prevented, but the recognition that energy is not only raw material but a fundamental social factor in the shaping of modern industrial society, may lead to an understanding that the solution to the crisis is not looking for alternatives to oil, but social and environmental change in a deep and thorough way.
Such a change includes over thinking and sustainable lifestyle that reduces the environmental impact, such as using for example local self-made wheat instead of having it imported from abroad, thus saving the transportation and waste of resources. It also includes a lifestyle less industrial and more local, creating an economic system locally replacing the economy of globalization and culture of consumption and growth.
by Eyal Zucker – co founder of Ecowizer
