Elephant in room becoming more apparent

There’s an elephant in the room right now in regards to the future of the economy in its present form and that elephant is energy.

There’s an elephant in the room right now in regards to the future of the economy in its present form and that elephant is energy.

The Provincial and Federal Governments don’t seem to be too concerned, in fact they’re exacerbating the problem by fire selling our resources.

So it’s now up to our local leaders to stare reality in the face and do what they can.

If you go on the US Energy Information Administration website and have a look at the history of conventional oil production worldwide what you see is a steady climb in production up until 2005 then a plateau all the way until last month.

It’s what’s known as the bumpy plateau in peak oil theory. The International Energy Agency and other energy think tanks warn that we may hit peak oil production within the decade. In Texas or Oklahoma in 1930s you could spend the equivalent of $400,000 in today’s money, drill down a bit and have a well that would produce thousands of barrels a day, with a decline rate well under 10 per cent per year.

That was cheap easily accessible oil. The tight hole shale gas deposits in the U.S. are not cheap easily accessible oil.

The supposed 100 year supply is a fraud, the cost to drill the majority of these tight wells falls between three and six million dollars, they produce 80 to 100 barrels a day and have a decline rate of 40 to 60 per cent per year with some wells declining up to 90 per cent.

With those decline rates companies are forced to drill more holes thus investing bigger chunks of capital and energy into extraction. Current estimates have the supply of shale gas peaking within the decade.  Shale gas, offshore deep water drilling and the oil sands don’t disprove peak oil theory, they confirm it.  Peak oil doesn’t mean running out of oil, it means running out of cheap, easily accessible oil, the very lifeblood of growth economics.

If you look at the history of economic growth you find it’s correlated with the growth in energy production. When oil is easy to get at, the energy invested to energy return is very high. So little energy is spent to get a lot of energy in return and all that excess energy for the past 60 years has been used to expand goods and services.

But we’ve picked all the easy low hanging fruit on the energy tree and now have to expend more energy to climb higher up the tree to find fruit. What that means is growth economics in it’s current form is finished.

Now instead of using that excess energy and capital to expand goods and services such as infrastructure, health care, transportation, education, arts entertainment and renewable energy, society has to use it to find, extract and produce energy.

Of course the costs of exploring, extracting and producing all these unconventional, dirty and difficult to get at sources are going to go up as cheap conventional oil production peaks and declines. The costs will be passed from the producer on to the consumer so be prepared to pay a lot more for everything.

There are ways we could mitigate the hardships this new economic and energy reality will impose on us but we won’t do that because we’re human. The majority of us lack the discipline to be proactive because as a species we’re hard-wired to react to threats.

But here’s some things you can do: buy more local food from the farmers market, walk or bike to work more, conserve energy and water, plant a big garden, learn how to can, buy locally made goods and properly insulate your house.

These are just some of the ways you can prepare for the energy crunch. You should also lend support to any Transition Town Initiatives and the Penticton Urban Agriculture Association. The response to peak oil is going to have to come from the ground up.

The people running our provincial (LNG) and federal governments (pipelines) lack the intellectual and emotional capacity to deal with a problem of this magnitude. So I’m calling on our local government to create a peak oil committee (if they haven’t already) to help study and design a response to the coming energy crunch.

Cody Young

Penticton BC