Peak Oil
Written by Rick Munroe: Peak Oil Adviser National Farmers Union, Member EFO Energy Committee
Peak oil refers to the ‘maxing out’ of global oil production, the point at which oil production reaches its
maximum. For over 150 years, commercial extraction of petroleum has been increasing, with current
consumption of about 86 million barrels per day (86 mbpd), or 1,000 barrels per second.
Since petroleum is a non-renewable resource, the time will come when we are unable to increase
production further, and a peak or plateau will be achieved, followed by declining production. Although
there is some debate about the likely timing of this peak, and whether we will see a sharp peak or an
extended plateau, there is general acceptance that peaking must eventually occur. Peaking has already
occurred in many oil-producing nations, most notably the USA, which peaked in 1970 and now produces
less than 60% of its peak production.
The central warning with respect to peak oil is this: difficulties are likely to occur as growth in production
finally stalls, and as awareness of this reality spreads. In other words, problems will arise not when we
“run out” of oil, but ironically, when we are at maximum (not minimum) production.
The dependence of modern society on affordable petroleum is obvious, especially in North America. Our
food supply chain, urban & suburban infrastructure and especially our transport systems have all been
predicated on cheap, available fossil fuels. It is expected that as oil becomes more expensive and less
available, complex global systems may falter, there may be a loss of confidence in financial markets and
currencies, with the potential for major economic and social distress.
Peak oil has been the subject of recent study by military analysts, most notably by a team of German
military researchers. They warn, “… the energy supply of the economic cycle must be assured. The
energy supply must be sufficient to allow positive economic growth. A shrinking economy over an
indeterminate period presents a highly unstable situation which inevitably leads to system collapse. The
risks to security posed by such a development cannot even be estimated”.
Global oil supply: 11 trends
• Oilfield discovery rates peaked in mid-1960s.
• Oilfield depletion rates are accelerating.
• Net energy/EROEI (Energy Returned on Energy Invested) rates are declining.
• Conventional oil production stuck at 74 mbpd since 2004.
• Unprecedented drilling rates.
• Increasing shift to off-shore & deep-water drilling (despite increasing environmental risks).
• “Grey factor” (veterans retiring, just when technological challenges are increasing).
• “Rust factor” (aging infrastructure).
• Price volatility & increasing cost.
• Export capacity will decline.
• Growing demand (86 mbpd = 1,000 barrels per second).
Some additional trends:
• Increasing acceptance that the “easy oil” is nearly gone.
• Increasing warnings of near-term oil supply crunch (2011- 2015).
• Still no viable liquid fuel replacement.
• Ongoing lack of awareness/concern by politicians, media, the public.
• Ongoing denial by Natural Resources Canada (“There is no imminent peak oil challenge”).
• Ongoing lack of research at Agriculture & Agri-food Canada, OMAFRA and USDA on the effects
to the agri-food sector of “the end of cheap fossil fuels.”
• Ongoing inaction on government plans for liquid fuel emergencies (30 years)