Weekend movie: A Crude Awakening: The Oil Crash


I admit, all movies about peak oil are designed in such a way as to alarm the viewer. But is that a bad thing? Oil is the “bloodstream of the economy.” When oil prices are low, the economy thrives. When it is high, like it is now, the economy tanks.

A Crude Awakening was released in 2006 – it was made well before the super-spike in oil prices in 2008. In fact, when this documentary was made, oil prices were about $40 a barrel. When it was released, many people ignored the message, saying that it was crazy to think that the price of oil would go up dramatically. After all, for most of our lives, oil has been cheap an plentiful. So it was easy to ignore peak oil.

Oil is now hovering at around $100 per barrel. In real terms, it now costs $3.25-$3.50/gallon to heat your home with oil. Back when the movie was made, home oil prices were about $1/gallon. Gasoline prices have similarly changed. This is not some abstract concept, this is our daily reality.

Back in the early 2000’s, I began to study peak oil, and its potential effects. I was shaken enough to change my path and dedicate my time to helping others to conserving energy. But back then, documentaries like A Crude Awakening didn’t exist. So when I gave a presentation to the local school board, trying to convince them not to build the new school around an oil burning heating system, I was ignored. The facility manager scoffed at my projections of $2-$3/gallon oil. “We’re paying $0.78/gallon he said proudly – I’ve got the price locked in for a year!” When I asked about the projected life of the school, he said “20-30 years.” So what’s the lifetime cost of heating that building? What’s your oil budget five years from now? Ten years? Have you figured that into your calculations?

I was met with blank stares. Why install a “more expensive” ground source heat pump when oil is cheap?

Today, I get angry when I pass by the school and think of the severe budget shortfall in the school district and our rising taxes. Short term thinking and blind belief in the status quo had saddled our township with a dinosaur, and now the residents were forced to pay. I hate being right about this type of thing.

Unfortunately, it is human nature to ignore long term trends until well after they are obvious. At first, there is denial. We think “We’ll find more oil. There’s always been lots. Besides, we’re so technologically advanced, we’ll figure it out.” Then there is anger: “why are prices going up? It must be market manipulation!” We’re still in that phase. Amazingly, the majority of the population still thinks of peak oil as a theory. Folks, wake up! It is not a “theory” – it is undisputed scientific fact.

How can I be so certain? Because peak oil is simply a description of a physical fact – any time there is a limited amount any resource, there will come a time when you’ve used half – this is the peak. After you’ve used half, you are using a diminishing resource. No matter how fast you pump or how many wells you drill, you cannot “make” more oil. Yes, you can discover more, and you can use better drilling techniques. You can even utilize alternative oils, like the oil sands in Alberta. But there’s a limit. And as these additional sources come on line, you are depleting existing wells – pumping them dry.

And it gets worse. Think about the world economy over the last twenty years. The use of energy is accelerating. Huge populations in China, India and elsewhere are raising their standards of living. Standard of living is directly related to energy use. Imagine that. Billions of people moving up from relative poverty. Billions of people using more energy. More oil. So at the same time that world oil supplies are peaking, we’re increasing the number of consumers. It’s a recipe for disaster.

Most people assume that well think our way out of the problem. “We’re smart, we’ll figure it out.” – in fact, I believe this. At some point, we’ll figure it out. But how long will it take? 10 years? 50? What happens in the meantime? In fact we are now living through this “what happens in the meantime” period. Economic hardship and decreased standards of living. Wars. Rising food prices. This is our new reality.

Graphic credit: Wikimedia commons, S-Kei

Currently, there are billions of dollars bring poured into trying to “figure it out.” China has gone from zero to the largest producer of solar panels in under a decade. Meanwhile, we in the United States are hamstrung by a tight economy so alternative energy and conservation programs are being cut back. Instead, we need to invest more money into these programs if we are to have any chance of meeting our energy demands.

In addition, we have to seriously consider our existing infrastructure. There are millions of existing cars on the road that use gasoline or diesel fuel. Even if we had enough solar electric capacity, this doesn’t make gasoline to run our cars. We would have to replace our cars with smaller, more efficient electric vehicles. While technically possible, this won’t happen over night. In all likelihood, the process will take decades.

This is the same for every other system that depends on oil. What will happen if we don’t transition away from our reliance on oil? At the very least, we will experience significant inflation because virtually everything in our society depends on oil. From fertilizer for our farms, to plastics, to transportation, to medicine – it all depends on oil.

While these are sobering, even depressing thoughts, we can’t give up. We owe it to ourselves and our children to keep fighting  to reduce our dependence on oil.

For those of you remaining skeptical about Peak Oil

If you still think that Peak Oil is just a theory, I urge you to read this page entitled: “Is the North Sea Oil Production Bonanza Approaching Twilight?”

The vast oil fields discovered in the North Sea are exhibiting a textbook Peak Oil scenario, with oil production now down significantly from it’s peak in the mid 1990’s. Even optimistic sounding articles, like this Huffington Post article: “North Sea Oil Reserve ‘Still has More %han 20 Billion Barrels Left’“, are direct admissions that those fields are past their peak. There are two quotes that tell the story:

“Mr Ewing said around 39 billion barrels have been extracted from the North Sea since large-scale production in the 1970s.”

and

“He told MSPs experts had forecast oil and gas production can continue until at least the 2040s, adding that industry body Oil and Gas UK has estimated that between 15 and 24 billion barrels remain.

This tells us that the total amount of oil contained was about 60 billion barrels, two-thirds of that has already been extracted since the 1970’s. If extraction continues at the current rate, there’s no possible way for production to last longer than another twenty to thirty years. While this may seem like a long time, there are many ramifications of being on the decreasing side of this curve. It means oil gets increasingly expensive because it’s getting scarcer and harder to find.

It gets worse. You can’t literally pump these wells dry. The lower you pump them, the more other junk is contained along with the oil which means an further increase in production costs.

For further information on North Sea oil, see this Wikipedia article.

Admittedly, North America’s oil production is on the rise, largely due to the cultivation of shale oil and oil sands and similar unconventional oil sources. Keep in mind that the production costs for these oils are vastly higher than the old oil wells that simply pump oil from the ground. Diminishing world supplies of easy to pump (inexpensive) oil is why oil prices are guaranteed to continue to rise. For an overview of this, see this article: “North American Oil Production On the Rise

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