Editorial

The End of Oil

It is a strange coincidence that the world is running out of oil just as discarding oil as an energy source has become a global imperative. 

Unfortunately, the end of cheap and abundant oil offers no easy relief from the perils of global warming, even as it threatens major social disruption.

Peak oil, the theory described by Mark Floegel in this issue, holds that the world will soon see the peak in oil production, correlating with having consumed half of ever-existing reserves. There is not that much in dispute about this theory, at least from a policy point of view. There is a widely held belief among experts in the area that the peak is coming, though there is disagreement about when. From a policy vantage point, this makes some, but not much, difference: the world still needs to shift, rapidly by any historic measure, to other energy sources.

Andy Rowell’s article explains how Big Oil is responding to the impending arrival of peak oil, as well as the phenomenon of rising oil nationalism: through the search for more oil in new, extreme frontiers. Even if the peak oil theory is off base, what is indisputable is that easily accessible oil is quickly going, and new reserves are to be found in more extreme environments, where the costs of drilling will be much higher, and where the local ecological risks are often even greater than in conventional drilling.

In a worst-case economic scenario, diminishing oil supplies will lead to price spikes with chaotic effects around the world.

But an alternative scenario may be more plausible. Higher prices will make possible the development of low-quality oil deposits, embedded in tar sands and oil shale, in places like the Canadian West and Venezuela. High gasoline prices may spur as well a more rapid transition to electric cars than now seems likely.

This will avert economic chaos — only to speed the ongoing rush to climate change disaster. Burning oil from the tar sands contributes as much to global warming as using conventional petroleum, but the process of extracting the oil itself takes three times as much energy. Electric cars offer a hopeful future, but only if the electricity on which they rely is derived from renewable, non-climate change-inducing sources — and that will not happen on its own.

Thanks in no small part to Al Gore, there is much broader awareness in the United States, as well as elsewhere, of global warming. Even Big Oil has largely abandoned its effort to deny that global warming is real.

But awareness is just a first step. Saving ourselves from the catastrophic future that awaits will require much more. And although individual action is necessary, it will require much more than everyone doing their part. Averting the most apocalyptic developments that may befall us in the face of inaction will require wholesale shifts in technology, major reorganization of economic life, significant cultural transformations and massive investments in research and development.

As profound as these changes must be, there is very good reason to believe they are achievable.

Save for one fact.

As Antonia Juhasz mentions as an aside in her interview on the nexus between oil and the war in Iraq, the United States permits energy corporations to exert as much control over its energy reserves — and its energy policy — as any country in the world.

Corporate control of energy policy and energy resources, especially in the United States, the country that consumes more energy than any other, is the single greatest obstacle to slow and hopefully reverse the world’s headlong rush to disaster.

This issue of Multinational Monitor is the first of a two-part examination of the Political Economy of Oil. Our aim is to examine industry strategies and weaknesses, to expose the damage from the oil multinationals’ everyday operations as well as their forays into new frontiers, to investigate how oil addiction is fueling war, and to explore ideas for restraining Big Oil’s power, and weakening its influence and ultimately dislodging its control.