Thursday, January 3, 2008

The $100 Question

This would be a good time, then, to take a look at Robert Hirsch's 2005 report for the Department of Energy, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management.

It opens with this bold statement: "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem." If real, peak oil does represent an unprecedented challenge for a society thoroughly dependent on (a society whose foundation is) oil.
A vexing aspect is that peak oil is a risk, not a certainty. There isn't concensus that it is real. If it is real, it's hard to agree when it will, or did, occur. The report makes the case that the downside to doing something if "peaking is long delayed" is that we will mitigate prematurely. The flip side (failure to mitigate) has much heftier consequences.
Oil was $25 a barrel in 2003. It is $100 in 2008.