Finding Hope in a Post-Oil Society

As the American public continues sleepwalking into a future of energy scarcity, climate change, and geopolitical turmoil, we have also continued dreaming. Our collective dream is one of those super-vivid ones people have just before awakening. It is a particularly American dream on a particularly American theme: how to keep all the cars running by some other means than gasoline. We'll run them on ethanol! We'll run them on biodiesel, on synthesized coal liquids, on hydrogen, on methane gas, on electricity, on used French-fry oil...!

The dream goes around in fevered circles as each gasoline replacement is examined and found to be inadequate. But the wish to keep the cars going is so powerful that round and round the dream goes. Ethanol! Biodiesel! Coal liquids...

And a harsh reality indeed awaits us as the full scope of the permanent energy crisis unfolds. According to the U.S. Department of Energy, world oil production peaked in December 2005 at just over 85 million barrels a day. Since then, it has trended absolutely flat at around 84 million. Yet world oil consumption rose consistently from 77 million barrels a day in 2001 to above 85 million so far this year. A clear picture emerges: demand now exceeds world supply. Or, put another way, oil production has not increased despite the ardent wish that it would by all involved, and despite the overwhelming incentive of prices having nearly quadrupled since 2001.

There is no question that we are in trouble with oil. The natural gas situation is comparably ominous, with some differences in the technical details -- and by the way, I am referring here to methane gas (CH4), the stuff that fuels kitchen stoves and home furnaces, not cars and trucks. Natural gas doesn't deplete slowly like oil, following a predictable bell-curve pattern; it simply stops coming out of the ground when a particular gas well is played out. You also tend to get your gas from the continent you are on. To import natural gas from overseas, it has to be liquefied, loaded in a special kind of expensive-to-build-and-operate tanker, and then offloaded at a specialized marine terminal.

Half the homes in America are heated with gas furnaces and about 16 percent of our electricity is made with it. Industry uses natural gas as the primary ingredient in fertilizer, plastics, ink, glue, paint, laundry detergent, insect repellent, and many other common household necessities. Synthetic rubber and man-made fibers like nylon could not be made without the chemicals derived from natural gas. In North America, natural gas production peaked in 1973. We are drilling as fast as we can to keep the air conditioners and furnaces running.

What's more, the problems of climate change are amplifying, ramifying, and mutually reinforcing the problems associated with rapidly vanishing oil and gas reserves. This was illustrated vividly in 2005, when slightly higher ocean temperatures sent Hurricanes Katrina and Rita slamming into the U.S. Gulf Coast. Almost a year later, roughly 12 percent of oil production and 9.5 percent of natural gas production in the gulf was still out, probably for good. Many of these production platforms may never be rebuilt, because the amounts of oil and gas left beneath them would not justify the cost. If there is $50 million worth of oil down there, why spend $100 million replacing a wrecked platform to get it?

Climate change will also ramify the formidable problems associated with alternative fuels. As I write, the American grain belt is locked in a fierce summer drought. Corn and soybean crops are withering from Minnesota to Illinois; wheat is burning up in the Dakotas and Kansas. Meanwhile, the costs of agricultural "inputs" -- from diesel fuel to fertilizers made from natural gas to oil-derived pesticides -- have been ramping up steadily since 2003 to the great distress of farmers. Both weather and oil costs are driving our crop yields down, while the industrial mode of farming that has evolved since the Second World War becomes increasingly impractical. We are going to have trouble feeding ourselves in the years ahead, not to mention the many nations who depend for survival on American grain exports. So the idea that we can simply shift millions of acres from food crops to ethanol or biodiesel crops to make fuels for cars represents a staggering misunderstanding of reality.