Lawrence Solomon: Forget the old Peak Oil theory, now the oil industry’s doom will be its everlasting supply

Peak-oil theorists – they’re those who predicted $300-a-barrel oil, because new discoveries wouldn’t materialize – were fundamentally immediately after all. So they say.

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No, not about the $300 price tag. Oil has become around US$30 a barrel and may stay there indefinitely, but that detail, they explain, only helps prove their point. And no, not about the failure to find new oil: The good thing about their theory, modestly revised, is it doesn’t depend on ever-diminishing supplies. On the contrary, peak-oil theorists first got it right, kind of. Oil will still peak and individuals will still abandon oil, simply not because we run out. On the contrary, the oil industry’s doom is going to be its everlasting supply.

For those who have trouble understanding this horror scenario, here is a short course from instructors for example Bloomberg Business and Thinkprogress’s Joe Romm, crowned Hero of the Environment by Time magazine. If you don’t have US$41 billion worth of savvy, as Bloomberg Business’s owner does, or a PhD from MIT as Romm does, you might need to read this explanation twice.

The peak-oil theory applies, they explain, if peak oil is thought in terms of demand, not supply. As the supply of oil won’t peak, demand for oil will, and shortly, since no one really wants oil. The proof is abundant and obvious – everything’s trending that way – once you consider it. Go ahead and take automobile.

The oil industry’s doom will be its everlasting supply

Electric vehicles now account for a mere one-tenth of one percent from the world’s one-billion cars and, according to OPEC, is only going to account for one per cent in 2040. But that estimate might be way off, Bloomberg Business announced this week in “Sooner Than You Think,” its series that “examines a few of the biggest transformations in human history that haven’t happened quite yet.”

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“By 2020, some electric cars and SUVs will be faster, safer, cheaper, and much more convenient than their gasoline counterparts,” leading people to abandon gas vehicles in droves. A Bloomberg New Energy Finance chart shows world oil demand peaking about 2025 due to this “transport transformation.”

Even earlier, by 2023, electric cars could displace two-million barrels of oil each day, developing a glut that will cripple the oil industry in the same manner the arrival of shale oil resulted in a crippling glut of two-million barrels of oil a day. (Still beside me?)



But it gets better (or worse, if you’re rooting for the oil industry) because more and more barrels get displaced as the electric car takes over from the gasoline vehicle, in the same manner colour TV took control of from monochrome. By 2030, eight-million barrels a day get displaced; by 2040, when half the earth’s cars are electrified, 18 million barrels. If you feel the oil industry is on the ropes now, imagine it after 2030. How many black-and-white TVs do you see at Best to buy?

The imminent demise of the gasoline vehicle joins other trends that make peak oil inevitable, peak-oil enthusiasts note, like Millennials’ rejection from the car culture and the imminence of the breakthrough in car batteries that will let them propel vehicles 200-300 miles on one charge.

Absolutely key to all this was the Paris global warming meetings, explains Romm, where world leaders promised to leave the majority of the world’s fossil fuels in the ground. As evidence that they will succeed, he cites that exemplar of environmental responsibility: China. “China understands the near future is low-carbon after which zero-carbon – so it intends to end up being the world leader both in the development and employ of battery electric vehicles, just like it already has both in solar and wind power power.” Besides, global governmental action “is inevitable within the 2020s because the reality of skyrocketing global warming becomes increasingly obvious.”

Put each one of these imminences and inevitabilities together and something else becomes inevitable – the embrace by environmentalists of the new Peak Oil Theory.

Lawrence Solomon is executive director of one’s Probe, a Toronto-based environmental group. LawrenceSolomon@nextcity.com.