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What’s Going to Happen When We Run Out of Oil?

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By design or disaster, the age of oil is going to end

It doesn’t look like much. A thick, black, splodgy substance. But locked into oil is massive amounts of potential. Energy potential that is. If it weren’t for our ability to extract energy from this wonder fuel, everything around you, that is, modern society, simply wouldn’t be. The thing about oil though, is that it’s non-renewable — one day it will run out. So what’s going to happen when it does?

To grasp the consequences of running out of the black stuff we need to head back to when the Industrial Revolution was getting started. Pre-industrial societies suffered from ‘the great economic problem’, the struggle to get enough food to eat. A large part of the problem was that humans were responsible for the work. It was humans who toiled the soils, who planted the seeds, who harvested the crop. The human-intensive nature of the process, alongside the never-ending struggle to get enough to eat, explains why pre-industrial economies were dominated by agriculture. 

The revolution of industry changed everything. The revolution was driven by technological advancements that increased our ability to harness the energy stored in fossil fuels. 

When it comes to agriculture, rather than humans performing the work, machines do it for us. Now, machines toil the soils, plant the seeds, harvest the crops, and fertilisers protect crops from disease or pests, greatly enhancing yields. We’ve become so efficient at producing food that we’ve created food abundance — we produce enough food to feed ten billion people. 

It’s technology that solved the great economic problem. It’s technology that has acted as a great emancipator. If it weren’t for technology it’s likely you’d have a crust of soil embedded in your fingernails after a hard day’s toil working on the fields. And none of it would be possible without inputs of energy from fossil fuels. 

It’s the utilisation of energy from fossil fuels that makes “our time wildly different from anything in the human past.” The fact fossil fuels are the energy source that keeps this all going means we’ve become rather dependent on them. Our reliance on fossil fuels to sustain civilisation means that “85 percent of commercial energy, 65 percent of fibres, and most plastics are now produced from fossil fuels.” 

Of particular importance is oil. The global economy depends on oil for transport, fertilisers, plastics, chemicals and pharmaceuticals. Cities have been planned and designed assuming an abundant supply of cheap oil would continue. It’s the lifeblood of modern civilisation because it’s the energy source that keeps it all running. As a result, an increase in the price of oil has knock-on effects on the price of everyday items like the cost of food.

So maintaining a cheap oil price is imperative. That’s why subsidies that hit an estimated $7 trillion dollars in 2022 remain vital to the global economy. If the price of oil goes up, then the price of everything goes up. If the price of oil remains high prices will remain high and living standards will reduce. 

But interwoven with our dependence on fossil fuels is a rather large elephant in the room. 

When you unlock the energy stored in oil you also unlock greenhouse gases (the main gas being carbon dioxide) that would otherwise have been safely stored in that oil. And we’ve really gone to town when it comes to unlocking greenhouse gases. Since the start of the industrial revolution 1.5 trillion tonnes of carbon dioxide has been released into the atmosphere. 

As a result, concentrations of carbon dioxide in the atmosphere have increased from 280 parts per million (ppm) at the start of the industrial revolution, to 420 ppm today. If we continue on a current course catastrophic environmental impacts lie in our wake. 

It’s understandable why oil and fossil fuels are considered a symbol of the climate crisis. Because they are. 

That’s why the continued use of fossil fuels has become so controversial. The more we use, the worse a terrible problem becomes. It’s here where we get to the really grissly part of our relationship with oil. To sustain an economy of this size we can’t just stop using fossil fuels. We’re locked in because while “the development of alternative energy sources is a priority, no currently feasible alternative can sustain the current rate of global economic growth.” 

Our relationship with oil then is complex, to say the least. We can’t live without it, but we certainly can’t live with it. For the time being calls to stop using oil are falling on deaf ears, first because oil companies still make massive profits from selling the stuff, but most importantly, and inconveniently, there is no direct replacement. 

Now, there is an argument that if oil companies were forward-thinking they could use their huge profits to invest in new technologies and become leading players in a low-carbon energy system — but that’s if we were rational. They seem convinced that a time when oil runs out is so far away as to not be a concern.

And here we find ourselves in the elephant that’s in the elephant in the room. We’re going to run out of oil. When we say run out, it’s not like a bathtub where we will suck up every last drop — problems will begin to arise when we reach peak oil. Peak oil is when we reach a peak in the maximum amount of oil we can physically extract, followed by an irreversible decline in production as demand exceeds supply. 

Some argue peak oil has already been hit, others argue it’s around the corner, for example a report published in 2005 predicts peak oil will be hit in the next twenty years, so pretty much now then. What’s undeniable is that peak oil will be hit, it’s a matter of when, not if. In fact, we won’t even have to hit peak oil to experience debilitating impacts. As peaking is “approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented.”

Once peak oil hits, we are in for a world of pain. Cheap oil will be a thing of the past, and as the price of oil skyrockets, so will the price of everything. Higher prices will be followed by shortages of goods and services which will lead to declines in living standards. Simultaneously we’re going to suffer the consequences of the climate crisis, which will see weather extremes that translate into wave after wave of economic shocks and environmental disasters. The combination will debilitate economies and overwhelm the capacity of governments to respond. 

A world of rising unemployment, massive uncertainty and dramatically decreasing living standards will translate into social malaise which will likely see an increase in rioting and radicalisation. Politics will inevitably become more polarised and extreme — it always does when people face suffering.

Whatever way you look at it, a future with oil looks bleak, a future without it looks just as bleak. So what options do we have? Well, three viable scenarios lie ahead that fall under two categories, disaster or design. 

Disaster one (climate disaster)— we continue using oil that quickly burns through the remaining carbon budget. Runaway climate change is triggered and catastrophic changes to the climate lie in its wake. The result — chaos and the collapse of modern society.

Disaster two (peak oil) — in reality, peak oil is connected with disaster one. But even if we isolate our interconnected disasters peak oil will wreak havoc on the global economy, which will lead to mass unemployment that will see living standards fall sharply. The result — chaos and the collapse of modern society.

Design — we recognise that our dependence on oil is leading us towards a catastrophic future. We take the necessary steps to prepare for peak oil, well in advance, by channelling any and all profits from fossil fuels towards funding a low-carbon energy transformation. The result — we reduce our our dependence on non-renewable energy sources while taking a giant step in reducing environmental impacts.

Whatever way you look at it, oil is a symbol of a time gone by. An industrial period that has led to phenomenal growth and exceptional increases in living standards. But post-industrial society requires a post-industrial energy system. As long as we remain locked into the age of oil, it is simply a matter of time before we hit a brick wall. That’s a scenario no one wants, but it seems the scenario that’s most likely because far too many people make far too much money from the black stuff. And when money is involved, rational decision-making goes out of the window.

This Post Has One Comment

  1. David Schwartzman

    Bring it on! Climate science tells us all fossil fuel consumption must end in the next two decades at most, with a 100% global renewable energy transition. So the claim in this article is misleading “The elephant in the room though is that oil is non-renewable.” Fossil oil is of course non-renewable on a non-geologic time scale. Electrification powered by wind/solar energy can substitute for oil for most technologies. Hydrocarbons still needed for society with no net C emissions will be generated by reacting atmospheric carbon dioxide and water powered by renewable energy.

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