The concept of Peak Oil was developed by M. King Hubbert in the 1950s. All oil fields are observed to peak and decline in output; the same process happens with entire nations. Global oil production will peak at some point as well, after which a steady decline in global oil production will occur.
The arrival of Peak Oil signals the end of an era of cheap petroleum. Whereas throughout the twentieth century the world experienced mostly consistent yearly increases in the available supply of oil, after reaching Peak Oil we must learn to live with declining annual supplies. Though the world will not run out of oil upon reaching Peak Oil — there are still many billions of barrels of petroleum available for extraction — there will be significant changes to our daily lives, some sooner and more drastic than others. However, if mitigation efforts are undertaken in an appropriate and timely manner, we will be better prepared for those changes and much better prepared to adapt.
Our addiction to cheap oil paired with the degree of the world’s dependence on it for everything from transportation to food production to plastic means that every sector of every society will be affected.
Unless population and economic growth plateau, or are curtailed, demand for oil will continue even though there will be less available for consumption. As stated in a study prepared in 2005 for the US Department of Energy, entitled The Peaking of World Oil Production: Impacts, Mitigation and Risk Management, (also known as the Hirsch Report), industrialized nations will experience:
increased costs for the production of goods and services
reduced demand for products other than oil
lower capital investment
As less-industrialized nations strive to attain the level of economic and social prosperity of industrialized nations, the demand for cheap oil will increase. But when the supply levels off and starts to diminish, this will mean that further industrialization based on easy petroleum will be impossible; meanwhile, the already industrialized nations will be challenged to maintain existing levels of economic activity.
Forecasts for the timing of Peak Oil range from essentially now until around 2030. Currently only about 1 barrel of oil is being discovered for every 5 or 6 extracted, and according to the BP Statistical Review of World Energy, 30 of the 54 significant oil-producing nations worldwide are experiencing declining production. Statistics like these underscore the importance of developing mitigation measures now to effectively address the issues that will arise as a result of reaching Peak Oil. With the numerous uncertainties surrounding Peak Oil forecasting, and given the graveness of the consequences, it is imperative that near-peak forecasts be seriously considered — especially since we will not be able to determine the exact timing of Peak Oil with certainty until it is in the past.
By adopting the Oil Depletion Protocol, nations, cities, and individuals will be expected to reduce their oil dependency by a certain percentage each year. It will be up to each signatory nation or region to develop alternative forms of energy to replace the amount of oil energy that has been reduced. As each region is unique, different combinations of alternative energy sources will be necessary, and conservation measures will vary across nations and regions. Individuals who adopt the Oil Depletion Protocol will pair their individual efforts with national and regional efforts. As a result of these changes, cleaner, more renewable technologies and energies will be developed, as will stricter conservation methods.
Preparing for and responding to Peak Oil will require intense, sustained effort and enormous investment. However, according to The Peaking of World Oil Production, early mitigation will be less expensive (financially, socially, and geopolitically) than delayed mitigation efforts. The sooner we act to address the inevitability of Peak Oil, the better off we will be.