The idea that seized the imaginations of the bien pensant chattering classes in the Noughties – “Peak Oil” – is no longer relevant. So says the commodities team at Citigroup, and policy-makers would be wise to examine the trends they’ve identified.
“Peak Oil” is the point at which the production of conventional crude oil begins an irreversible decline. The effect of this, some say, is that scarcity-induced prices rises would require huge changes in modern industrial societies. For some, Peak Oil was the call of Mother Earth herself, requiring a return to pre-industrial lifestyles. One example of this response is the “Transition Towns” network, a middle-class phenomenon in commuter belt towns in the UK.
But in a must-read research note [PDF] issued this month (which is also implicitly critical of the industry) this is premature.
“Rely on the sun and the other eco-friendly things that Mother Earth has given us. We need to stop being dependent on the corrupting effect that is oil now!”
– HuffPost Super User “ProgressivePicon86”
The next energy revolution is coming – and promises the biggest disruption since the industrial revolution.
Today we assume that oil is a finite resource. The “Peak Oil” argument, for example, is not that it runs out, but that conventional sources run down, and it becomes prohibitively expensive. This obliges us to think about re-ordering society. The other assumption is that the exploitation of fossil fuels creates the rapid release of carbon dioxide into the atmosphere, changing the climate. Along with this, too, are arguments for re-ordering society. But with the next generations of fuels, these assumptions go out of the window. Policies based on these assumptions lose their relevance and appeal.
This promises a fundamental change in how we think about man, industry and nature. Just as Karl Marx anticipated a future of machines, where manual labour had been replaced by automation, we need new political thinking.
Replacing oil, however, isn’t so simple. The problem is that oil is a terrifically energy-dense material, and useful in many other ways. Entire industries are founded on the byproducts alone, such as fertilisers and plastics. We tend to take this for granted.
But what if oil could be created in your backyard? Or by your children as a school project? What if we thought of oil as a renewable energy? What if it was a low-carbon renewable? With cheap hydrocarbons it becomes just that, and within 15 years much of our oil will be produced this way: it’s simply an open bet on who’ll get there first. Continue reading “Synthetic renewable oil: what’s not to like?”