Oil-mageddon
By MICHAEL HANLON
Last updated at 23:06pm on 11th May 2007
For the Greeks and the Romans, it was the plentiful forests, marble and other building stones found around the Mediterranean.
The heart of British power was first oak and then iron.
Without these two treasures, we would have remained a two-bit power in a windy corner of the Atlantic.
But for a century or more, a new natural resource has driven the greatest civilisation the planet has ever seen.
For our fractious, First World global village, that resource has been oil.
Petroleum, the fossilised, compressed and geothermally baked remains of sea creatures and organisms that lived hundreds of millions of years ago, drives just about everything we do - from our cars, trucks, aeroplanes and buses to power stations and central heating.
Oil is not just a fuel, it is the basis for that other defining material of modern life: plastic.
The truth is that without oil, humanity - all six and a half billion of us - would be catapulted back into the steam age. And the results would not be pretty.
Now, a new book says that the age of oil is about to draw to a close and that the post-petroleum era is already upon us.
Unwittingly, the author states, we are sleepwalking into a crisis that will make current fears about global warming look like a sideshow.
The petrol shock of 2000, where anti-tax protesters nearly brought Britain to a halt, was just a dress rehearsal for the misery to come.
According to this thesis, in just a few decades - perhaps sooner - the world will change.
The liquid which drives and lubricates our world will become so expensive that our way of life will collapse. Only a dramatic and painful change in our lifestyles will save us.
Now, it must be said that the idea that "oil is running out" is not new.
I remember being taught in school in the Seventies that the mother of all energy crises was just around the corner.
This was, remember, the time of the coal strikes, the three-day week and queues at the petrol pumps.
The Arabs had just discovered that they could hold the world to ransom, thanks to the black gold that flowed from under their sands.
Imagining a world without oil, back then, was all too easy.
By 1990, I recall having been told as a child, petrol would cost not 90p, as it did then, but £10-£15 a gallon.
Fuel would be rationed to the extent that we would shiver in winter and go hungry, be unable to fertilise our fields or afford to import supplies from abroad.
By 2000, we were told, humankind would be facing global collapse.
Well, like so many of the doomsday predictions made in the past 50 years, it didn't happen.
Like the population explosion, the non- existent millennium bug and the impending Ice Age (remember that?), the Great Oil Crisis evaporated into the sands of Araby.
In fact, petrol is now cheaper, in real terms, than it was in 1970 - and that was before the Saudis put the price up. Food and electricity are also cheaper.
As a result, we can afford to consume energy, much of it derived from oil, like never before. Crisis? ... what crisis? it is tempting to ask.
So why should we take warnings of a new oil shock any more seriously now than we did 30 years ago?
According to David Strahan, a respected business journalist and author of the new book, the early warnings of an oil crisis were correct in every respect, save their timing.
In the next couple of decades or so, he argues, our civilisation will have crossed a point where the peak of oil discovery and production has been reached.
From then on, the story will be of dwindling supplies and rising prices.
Is he right? Well, he marshals some impressive arguments. The rate at which we discover oil has indeed been falling for 40 years.
In the Sixties, geologists found some 55 billion barrels a year. Today, the figure is down to just 9 billion barrels.
Most worryingly, we now consume three barrels for every new one discovered, and out of the 98 oilproducing nations, 60 (including the UK) are now in terminal decline.
Tax revenues here are dropping as North Sea oil production declines.
Indeed, Britain will become a permanent net importer of oil next year - according to The Oil Depletion Analysis Centre - and then our balance of payments and energy security will begin to deteriorate.
Strahan says: "It's the end of a gravy train for Britain."
The scenario gets worse. If every person on the planet consumed oil at the rate of the average American, the world would have to produce not 86 million barrels a day - as at present - but 450 million.
As a result, we would run out of oil in just seven years.
"It is unarguable that oil is a finite resource," Strahan says.
"We have been finding less and less of it for more than 40 years. We have only been able to carry on as we have because for many years we discovered more oil than we consumed.
"But that situation reversed in the 1980s and, since then, the deficit has grown ever wider.
"We are deep into unsustainable territory - living off the fat laid down in the years of plenty, now long gone."
Strahan goes on to argue that we have reached that point now, as a result of a series of false assumptions and lies.
This, of course, isn't the first harbinger of doom. Back in 1956, the Texan geophysicist Marion King Hubbert predicted that the peak of U.S. oil production was just 15 years away.
"Peak oil" did, in fact, arrive, in 1970. And ever since, America has been increasingly reliant on imports.
What was wrong with those early pessimistic forecasts was simply the timing. A growing number of economists now believe that in a few years we really will be in trouble.
And Hubbert's analysis suggested that world "peak oil" would be in 50 years' time - or about now.
On the other hand, there is hope. Technological advances mean that it is now possible to pinpoint where potential new oilfields can be found - instead of wasting huge resources looking in inhospitable terrain.
There are about 700 of the right kind of sedimentary rock basins around the world where oil might conceivably be located.
We have not explored all of these, and some may contain vast untapped reserves.
But the fact remains that despite huge amounts of cash being spent by oil companies (between 2000 and 2005, they increased their capital expenditure by a quarter of a trillion dollars), we are now discovering less oil than at any time since 1945.
This is extraordinary, considering the sophisticated technology, such as satellite mapping, that geologists have at their disposal.
There is evidence now that the OPEC cartel, which controls most of the world's oil production, has been systematically inflating its claimed reserves to keep share prices up.
But even within the oil industry, there are worried voices.
Thierry Desmarest, chairman of Total, the world's fourth-largest oil company, says global production will peak "in around 2020".
Sir David King, the British Government's chief scientific adviser, says that the peak will come "in ten years or less".
So, the scenario goes, at some time in the 2020s or possibly sooner, oil production will begin an irreversible decline and oil will become a deadly, zero-sum game. What then?
Well, geopolitical conflicts will undoubtedly sharpen. China and the U.S. are already at odds over Iranian oil.
The former, which is oilpoor but cash-rich, has been wooing the Persians and Arabs for some time, and investing heavily in African countries which have confirmed, or possible, oil reserves.
Iran has the secondbiggest oil reserves in the world and has recently agreed a $70billion, 25-year deal to supply the Chinese.
Iran, Islamic yet relatively stable compared with its neighbours, becomes an increasingly important power.
"In these circumstances," says David Strahan, "any little incident, such as the capture of 15 sailors, could quickly escalate."
It might pay us to be on good terms with this troublesome regional superpower and to keep a wary eye on the rising economic star in the East.
A post- oil world will be one of rampant inflation and recession, and perhaps war.
Indeed, Strahan believes that the invasion of Iraq was 2all about oil2.
In the very week, in 2002, that George W. Bush and Tony Blair agreed to topple Saddam Hussein's regime in Baghdad, the two leaders agreed a "U.SUK energy dialogue", whose main aim was to secure "energy security and diversity".
This, Strahan maintains, was part of the strategy that led to the invasion - an episode of Western sabre-rattling in the Middle East that was intended to remind other oil giants what was in store should they lose their friends in the West.
In the future, if oil prices soar, there won't just be queues at petrol stations but at the supermarket as well.
It is not generally appreciated how little food Britain and other "rich" countries have in store - a few days' worth at the most.
For every calorie of food we consume, about ten calories of fossil fuel energy have been expended to bring it to our plate.
No oil means no food - or at least hugely expensive food. Never mind £15 for a gallon of petrol, what about £5 for a loaf of bread?
Strahan says our entire way of life will have to change - dramatically. Forget buying a Prius hybrid car. The future is two-wheeled, and human powered.
This is a gloomy forecast and we have, as we have seen, been here before. But the truth is that oil reserves are indeed finite.
Most of the "black gold" we are burning now was laid down over a period of about 500 million years.
It takes many millions of years to produce an oil-bearing rock formation, and there is no way that natural oil production will replace the resources we are already taking out the ground at the rate we are using it.
But the big question is: how long will this take? Here, the terrifying thesis that our civilisation is about to collapse starts to find itself on rather more shaky ground.
While it is true that oil discoveries appear to have peaked, there is an awful lot of our planet left to survey.
New North Seas and new Arabias might yet be found, and in Canada alone, huge deposits of oil-bearing shale may keep us in cheap(ish) petrol for decades to come.
And it is true, as sceptics have cynically argued, that we always appear to be a few decades away from "the end of oil", simply because it is not worth the oil companies spending huge amounts of money to discover oil fields they will not need to exploit until their shareholders are all dead.
The first predictions of an impending oil crisis were actually made not in the 1950s but in the 1870s.
There is also the unarguable fact that oil is still relatively cheap - not what you would expect if it were on the verge of running out.
Last year, oil prices rose, but then they started falling again.
In any case, the price of products such as petrol has little to do with the price of crude oil.
Even if oil went to $150 a barrel, we would be paying only a few more pence per litre at the pumps, as it is taxes that form the bulk of the price of our fuel.
Most importantly, we must not forget the march of technology. Not only will it help us to discover more oil, but it will also enable us to use what oil we have more efficiently.
Strahan believes that the only solution is to stop driving, and to turn the heating down - and hope that diplomacy keeps a new wave of energy wars at bay.
If he is right, we will have no choice.
But we may be lucky. When Britain ran out of oak forests in the 18th century, the fathers of the Industrial Revolution discovered new resources - iron and coal - to power a new age of steam-driven prosperity.
We can only hope that the postoil age will come about not because we have run out of black gold, but because we have found a way of doing without it.
The Last Oil Shock: A Survival Guide To The Imminent Extinction Of Petroleum Man, by David Strahan, is published by John Murray at £12.99. To order a copy (p&p free), call 0870 161 0870.
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