A Citizen’s Guide

Alaskan politics is currently dominated by issues concerning oil and gas. How can we build a natural gas pipeline? What is the appropriate tax on the oil industry? Should we build expensive bridges? And, should we open the Arctic National Wildlife Refuge to oil development? These are important questions, but a general understanding of the current state of global oil supplies is often lacking from these discussions. These decisions need to be made in the context of an impending decline in global oil production and with an understanding of the incredible importance of oil in our economy.

When oil production first started on a large scale in Pennsylvania in 1859, it started a massive transformation of the global economy. Suddenly we had a massive influx of cheap, safe and transportable energy, representing solar energy accumulated over hundreds of millions of years (some estimates place the energy content of a barrel of oil as equivalent to the work of eight people for an entire year). This bonanza was unprecedented in human histor yand was largely responsible for rapid industrialization, an increased standard of living and drastic changes in transportation, agriculture and geopolitics. This cheap and abundant energy also allowed us to isolate ourselves from our food sources, create petrochemicals to increase food production, develop a system of global trade and move increasingly long distances from our places of work. Unfortunately, these adaptations also had the unintended effect of making us increasingly reliant on oil. The U.S. uses 25 percent of the world’s supply, making us particularly dependent on oil. And, because our economy is based on constant growth, we not only need oil, we need larger amounts every year.

After 150 years of oil production, we have nearly reached the point at which the oil supply can no longer meet the demand. Based on extremely optimistic estimates of future oil discoveries, the federal government estimates that oil production will peak in 30 years. But many independent analysts have concluded that the peak will actually occur in this decade and, in fact, ma yhave already occurred.

In 1956, geologist M. King Hubbert examined oil production and discover ycurves and predicted that Lower 48 oil production would peak in about 1970.

His predictions were largely dismissed at the time, but U.S. oil production did peak in 1970 and has been declining steadily ever since. Using similar techniques, many independent oil industry analysts have predicted a global peak in oil production between 2005 and 2010 (see www.peakoil.net). In fact, 33 of the 45 top oil-producing countries already have declining production.

Regardless of the exact date of the oil production peak, it is clear that we cannot continue to use 84 million barrels of oil a day indefinitely. And we cannot drill our way out of this crisis. Because most of the globe has already been intensively explored, there is little chance of finding man ymajor new fields. The optimistic estimate of 10 billion barrels in ANWR amounts to only about 16 months of U.S. consumption.

Global oil discovery peaked in the late 1960s and has been declining ever since. In 2005, despite high prices, we used six times more oil than was discovered. As oil prices increase, tar sands, oil shale and synthetic fuel from coal may slow the decline, but they can’t replace cheap oil.

What will be the effect of declining global oil production? In the short term, it will lead to volatile but increasing oil prices, suppl ydisruptions, economic decline and more resource wars. In the long-term, we will have to find ways to live with lower energy consumption. This means more local agriculture with fewer petrochemicals, more local industry, increased alternative energy use and limited mobility. Our future standard of living will largely be determined by our ability to do more with less energy.

The transition to a post-oil economy will take at least a decade and cost trillions of dollars. Time and money we may no longer have. It is imperative that we use our current energy wealth to make the transition to an alternative energy economy. We cannot afford to burn all the cheap oil without making real progress toward this goal.

Alaska is lucky to have abundant coal, oil, and gas, but we are also especially dependent on fossil fuels for our heat, transportation and food.

We would be wise to consider the global energy situation in all our decisions regarding our resources.

Alex Prichard lives in Fairbanks