The elephant (oilfield) in the room

I can't find a major American news outlet that has published what is surely one of the biggest stories of 2008: the International Energy Agency's ominous about-face on the issue of peak oil. The report is admittedly heavy reading. George Monbiot in UK's Guardian cuts through the technocratese and provides essential context. The bottom line, as Monbiot writes, "we're in deep doodah."

The IEA has long soft-pedaled peak oil, saying world supplies wouldn't peak until 2030 (as if that gave us a lot of time to prepare for the transition). For the first time, however, the agency did a more in-depth inventory of the world's oilfields. Now it says peak could come in 2020. I think we're already there. But either way, this is an issue that will dominate our lives more than terrorism, Iraq, Afghanistan, the financial meltdown or even global warming — and it is intertwined with all of those. There is no bigger national security issue. But Americans aren't talking about it.

As longtime Rogue readers know, peak oil is reached when half of all the world's oil has been burned away — and the dinosaurs aren't making any more. The remaining half will be of poorer quality and located in places "where people don't like it," as President Bush put it in one of his allusions to the gathering crisis. With the entire world dependent on petroleum, and demand rising fast in developing nations such as China and India, it won't take another 150 years to draw down the remainder. One oil CEO estimated it could take as little as 30. And he's bullish. That's the blink of an eye if the world is to retool its economy for a post-petroleum future.

In reality, the big elephant fields that the world depends on are already past, at or near peak. Mexico's Cantarell field is dropping much faster than expected. New discoveries can't replace these big fields, the last of which was found decades ago — and many of the new finds are questionable at best. Global production has been stagnant for several years, despite (until recently) skyrocketing demand. More exporting countries are withholding oil for their domestic needs. Domestic "drill, baby, drill" could only replace a tiny fraction of American demand. Bet you haven't read any of this in your local Lite newspaper.

This gathering storm has been cloaked by several factors, among them the secrecy of the Saudis concerning their actual reserves and production; poor reporting by the American media; a fundamental misreading of the recent drop in oil prices; wishful thinking about oil shale and hydrogen cars; trumped up reserves by the major oil companies, and most of all the inability of most Americans to consider such a fundamental disconnection from the automobile past.

Peak oil came in the U.S. in the early 1970s, not coincidentally along with a major economic upheaval. It taught us that you usually only see peak in the rear-view mirror. This time we've had much more warning from respected oilmen and geologists. We'll still have oil — but it will be much more expensive. Most alternatives overpromise — they will be costly and depend on the platform of petroleum to produce. And none of them will allow us to continue the "American dream" of sprawl, exurbs, hundred-mile commutes and endless single-occupancy car trips. (This is only one reason why Phoenix's old economy is dead).

We're probably past the point of "running out of time." Now it's a question of whether we will choose to mitigate the shock and transition relatively soon — or keep trying to sustain the unsustainable, whether through bailouts or overseas military adventures? Peak oil will be accompanied by economic contractions and global tensions as the great powers rush to lock up the remaining reserves. At its best, it won't be pretty. But America has a chance to make a new start, a chance to leapfrog into the 21st century and ensure its safety and prosperity — but only if it starts the transition now.

That leads to the biggest question of all: Will Barack Obama tell the people?