False Summit

We were wrong about peak oil: there’s enough in the ground to deep-fry the planet.

By George Monbiot, published in the Guardian 3rd July 2012

The facts have changed, now we must change too. For the past ten years an unlikely coalition of geologists, oil drillers, bankers, military strategists and environmentalists has been warning that peak oil – the decline of global supplies – is just around the corner. We had some strong reasons for doing so: production had slowed, the price had risen sharply, depletion was widespread and appeared to be escalating. The first of the great resource crunches seemed about to strike.

Among environmentalists it was never clear, even to ourselves, whether or not we wanted it to happen. It had the potential both to shock the world into economic transformation, averting future catastrophes, and to generate catastrophes of its own, including a shift into even more damaging technologies, such as biofuels and petrol made from coal. Even so, peak oil was a powerful lever. Governments, businesses and voters who seemed impervious to the moral case for cutting the use of fossil fuels might, we hoped, respond to the economic case.

Some of us made vague predictions, others were more specific. In all cases we were wrong. In 1975 MK Hubbert, a geoscientist working for Shell who had correctly predicted the decline in US oil production, suggested that global supplies could peak in 1995(1). In 1997 the petroleum geologist Colin Campbell estimated that it would happen before 2010(2). In 2003 the geophysicist Kenneth Deffeyes said he was “99 per cent confident” that peak oil would occur in 2004(3). In 2004, the Texas tycoon T. Boone Pickens predicted that “never again will we pump more than 82 million barrels” per day of liquid fuels(4). (Average daily supply in May 2012 was 91 million(5)). In 2005, the investment banker Matthew Simmons maintained that “Saudi Arabia … cannot materially grow its oil production.”(6) (Since then its output has risen from 9 million barrels a day to 10, and it has another 1.5 million in spare capacity(7,8)).

Peak oil hasn’t happened, and it’s unlikely to happen for a very long time. A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun(9). The constraints on oil supply over the past ten years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s.” The investments required to make this boom happen depend on a long-term price of $70 a barrel. The current cost of Brent crude is $95(10). Money is now flooding into new oil: a trillion dollars was spent over the past two years, a record $600bn is lined up for 2012(11).

The country in which production is likely to rise furthest is Iraq, into which multinational companies are now sinking their money, and their claws. The bigger surprise is that the other great boom is likely to happen in the US. Hubbert’s Peak, the famous bell-shaped graph depicting the rise and fall of US oil, is set to become Hubbert’s Rollercoaster.

Investment there will concentrate on unconventional oil, especially shale oil (which, confusingly, is not the same as oil shale). Shale oil is high-quality crude trapped in rocks through which it doesn’t flow naturally. There are, we now know, monstrous deposits in the United States: one estimate suggests that the Bakken shales in North Dakota contain almost as much oil as Saudi Arabia (though less of it is extractable)(12). And this is one of 20 such formations in the US. Extracting shale oil requires horizontal drilling and fracking: a combination of high prices and technological refinements has made them economically viable. Already production in North Dakota has risen from 100,000 barrels a day in 2005 to 550,000 this January (13).

So this is where we are. The automatic correction – resource depletion destroying the machine that was driving it – that many environmentalists foresaw is not going to happen. The problem we face is not that there is too little oil, but that there is too much.

We have confused threats to the living planet with threats to industrial civilisation. They are not, in the first instance, the same thing. Industry and consumer capitalism, powered by abundant oil supplies, are more resilient than many of the natural systems they threaten. The great profusion of life in the past – fossilised in the form of flammable carbon – now jeopardises the great profusion of life in the present.

There is enough oil in the ground to deepfry the lot of us, and no obvious means by which we might prevail upon governments and industry to leave it in the ground. Twenty years of efforts to prevent climate breakdown through moral persuasion have failed, with the collapse of the multilateral process at Rio de Janeiro last month. The world’s most powerful nation is once again becoming an oil state, and if the political transformation of its northern neighbour is anything to go by(14,15), the results will not be pretty.

Humanity seems to be like the girl in Guillermo del Toro’s masterpiece Pan’s Labyrinth: she knows that if she eats the exquisite feast laid out in front of her, she too will be consumed, but she cannot help herself. I don’t like raising problems when I cannot see a solution. But right now I’m not sure how I can look my children in the eyes.



1. http://www.hubbertpeak.com/hubbert/natgeog.htm

2. Colin J. Campbell, 1997. The Coming Oil Crisis. Multi-Science Publishing Co. Ltd, Brentwood, Essex.

3. Quoted by Bob Holmes and Nicola Jones, 2nd August 2003. Brace yourself for the end of cheap oil. New Scientist, vol 179, issue 2406.

4. T. Boone Pickens, 9th August 2004. On the Kudlow and Cramer Show, MSNBC.

5. International Energy Agency, 13th June 2012. Oil Market Report. http://omrpublic.iea.org/

6. Matthew Simmons, 2005. Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. Wiley.

7. http://earlywarn.blogspot.co.uk/2011/02/latest-saudi-arabian-oil-production.html

8. See the note at the bottom of pages 4-5, Leonardo Maugeri, June 2012. Oil: The Next Revolution. The Unprecedented Upsurge of Oil Production Capacity and What It Means for the World. http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf

9. Leonardo Maugeri, June 2012. Oil: The Next Revolution. The Unprecedented Upsurge of Oil Production Capacity and What It Means for the World. http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf

10. http://www.oil-price.net/

11. Barclays’ Upstream Spending Review, 2012, cited by Leonardo Maugeri, as above.

12. Maugeri writes (page 47): “In 2011, Continental has estimated the Bakken OOP alone at 500 billion barrels. In terms of oil in place (not all of which is recoverable), both the Price and the Continental estimates would put the Bakken formation ahead of the largest oil basins in the world, making it the biggest one—a sort of Saudi Arabia within the United States. (In 2005, Saudi Oil Minister Al Naimi publicly estimated the OOP of Saudi Arabia to be around 700 billion barrels).”

13. https://www.dmr.nd.gov/oilgas/stats/historicaloilprodstats.pdf

14. Andrew Nikiforuk, 26th June 2012. Canada’s Hard Turn Right.

15. George Monbiot, 1st December 2009. The Urgent Threat to World Peace is … Canada. https://www.monbiot.com/2009/12/01/the-urgent-threat-to-world-peace-is-%E2%80%A6-canada/