Is there a peak oil cover up?
Until recently I’ve been agnostic about ‘peak oil’ – I’ve been in the “we’ll only know when it happens” camp, but as the issue has moved steadily from the fringe to centre stage, I’ve started siding with the peak oil brigade. Last year International Energy Agency Chief Economist Fatih Birol stated that production could “plateau” by 2020 and a recent report by the UK Energy Research Centre concluded that a peak could occur before 2020. But then yesterday The Guardian reported allegations that the IEA has been exaggerating the future reserves of oil under pressure from “the US”. One insider stated “we’ve already entered the peak oil zone”.
There is one good reason for this cover-up (if that’s what it is) – to stop panic buying and even resource related conflict, but I suspect that denial and inertia are the dominant drivers. In particular, the oil industry has a massive vested interest in avoiding talk of a peak. If reserves are seen to be depleting then shareholders will dump their shares – the 2004 reserves scandal nearly did for Shell. The sensible thing to do would be to diversify quickly into new energy technologies. The sort of cash that Big Oil could pump into renewables and efficient technology could drive us quickly to a low carbon economy, resilient to both climate change and peak oil, but instead they seem wedded to pursuing expensive and destructive forms of oil extraction like tar sands. If I were an investor, I’d start backing a different horse – and indeed investment in renewables exceeded that of fossil fuel exploration in 2008.
There’s a great political opportunity here. The resistance to cutting carbon emissions in the US and elsewhere is mainly based on a suspicion of the political motives of the green lobby (“an excuse to raise taxes”, “eco-communism”, “red-green alliance” etc). If the world wants to maintain its standard of living once oil has peaked, we’ll need those low carbon technologies anyway, irrespective of your views on climate change evidence. John Kerry has been promoting the business opportunities green innovation to persuade reluctant US politicians to sign up to President Obama’s climate change bill. Maybe he should ask them “what will your voters say if you let the pumps run dry?” instead.