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OIL DEPLETION -
THE HEART OF THE MATTER
Imagine an impartial Inquiry into the future production of oil and gas and the likely scenarios for mankind.
  -C. J. Campbell

1. Peak Production:

The Inquiry finds that the World production of Regular Oil will reach a peak during the first decade of the 21st Century, and that the production of all liquids will do likewise around the end of the decade. Such a peak reflects the immutable physics of the reservoir and the rate of past discovery, being virtually immune to economic or technological developments.

2. Subsequent Decline:

The Inquiry finds that economic and technological developments may affect the rate of post-peak decline and stimulate the entry of substitutes from so-called renewable energies, including safe nuclear energy.

3. Conflict

The Inquiry notes that the uneven distribution of future production and demand gives serious grounds for conflict as consumers vie with each other for access to supply, principally from the Middle East.

4. Economic Impact

The Inquiry notes that a decline in the supply of cheap oil-based energy will have an unavoidable and far-reaching impact on the economic prosperity of the World, especially in respect of trade and food supply. It may on the other hand have a positive impact on the environment generally. For example, climate change concerns might evaporate from reduced emissions, and fish-stocks might recover when trawling gave way to less energy-intensive drift netting.

5. Options

The Inquiry concludes that the World had three main options in addressing the issue. Two are short-term options with negative attributes, but in the longer term all three paths come together to reflect the eventual depletion of oil, which is far beyond Man’s control, being imposed by Nature.

a) National Profiteering

Under this option, oil resources remain within the national jurisdiction of the producing countries, allowing them to profiteer from the scarcity value of their oil as World shortages bite in earnest from 2010 onwards. It is feared that such profiteering could lead to excessive military expenditure, or reinvestment in foreign industrial countries, leading to large-scale transfers of ownership, which would be causes of predictable tension. Furthermore, the profiteering would likely cause World recession that might indirectly act to the detriment of the profiteer. National profiteers would also suffer in the longer term because they would be less prepared to meet the consequences of the inevitable exhaustion of their natural inheritance.

b) Profiteering by War

Under this option, one or more major consuming countries use their military might to take control of oil production, wherever it might lie, with a view to profiteering from such control, both directly from the sale of conquered oil and indirectly by stimulating their home economies with cheap energy. If world production were stepped up under this arrangement, the global peak would be higher and sooner, meaning that the subsequent decline would be steeper, making a bad situation worse. While this too might convey short-term benefits, it left the conquerors less prepared to cope with the inevitable decline imposed by Nature, which would be even steeper as a result of the higher near-term level of production.

c) Consumer Restraint

The third option contemplates a Depletion Protocol whereby the importers of oil would curb their imports to match the global Depletion Rate, as imposed by Nature, which is currently running at about 2.5% year. By matching demand with supply, World prices would remain in reasonable relationship with production cost, removing profiteering, which was held to be morally wrong. It would mean that the poor countries would be able to afford their minimal requirements. It would also means that the massive destabilising financial transfers arising from particularly Option a) would be avoided. The importing countries could manage their allocations as suited their particular environments and inclinations. They might auction the supply to the highest bidder under open market principles; they might tax oil higher with corresponding reductions of other taxation; they might ration supplies, such rations being perhaps tradable; or they might employ a combination of such measures.

The Inquiry concluded that this option provided the smoothest transition to the new world of reduced energy supply. It would encourage the avoidance of waste and provide for the entry of renewable energies to the maximum extent possible. It further concluded that there would be many indirect consequences leading to the encouragement of local communities and markets which might carry hidden benefits in that people would find themselves in better harmony with themselves, each other and their environments with scope for a spiritual re-awakening.

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