The end of cheap oil 

What will happen when global oil production hits its peak?

By Russ Cooper

Judith Patterson this past fall at her cottage near Algonquin Park in Ontario. Magnifying glass

Judith Patterson this past fall at her cottage near Algonquin Park in Ontario.

Associate Professor of Geology Judith Patterson wouldn't be considered a rude person, but she doesn't shy away from crude argument.

“At a conference earlier this month in Washington, I was part of a discussion with the heads of huge oil companies and plenty of big industry players, and they were talking all about how the future is going to be rosy and the outlook is great. I got up and put the question right to them: ‘I don’t see you talking at all about peak production.’ They were shocked,” she laughs. “They didn’t give me the microphone back after that.”

The idea of ‘peak production’ is central to Patterson’s research into ‘the end of cheap oil’ – the hypothesis that world oil production will soon reach its apex and begin a decline in future days. In her research, Patterson is examining the aviation industry and its impact on the environment. And, in recent years, Patterson has been gaining a reputation as one of the foremost voices on the changing role of oil in our society.

On Jan. 15, Patterson attended the 88th Annual Meeting of Transportation Research Board (TRB), an international U.S.-based organization researching better transportation methods. She also serves on the TRB’s Aviation and Environment committee and its Aviation Sustainability and Aviation and Climate subcommittees.

As well, this past October, she was part of a panel at the European Regional Airline Association Annual General Assembly in Manchester, U.K. talking about aviation fuel and fuel pricing.

It’s no wonder she’s quite busy. The wildly fluctuating price of oil and the bubbling fear of the world’s peak production have caused havoc throughout all facets of business and, by proxy, the general way of life around the world.

Patterson uses the example of last spring’s request from George W. Bush to Saudi Arabia, the daily producer of 9.5 million barrels or 11% of the global supply, to pump more oil in the hopes of bringing down the bloated price per barrel.

“The world consumes roughly 86 million barrels a day. Saudi Arabia agreed to pump another 300 000 a day. That's peanuts!” she says. “Now, the question is, did they agree to give such a small amount because they wouldn’t or they couldn’t pump more? When Saudi reaches their peak production, the world's supply will go downhill and it’ll get more expensive."

As for us here, Canada is the world leader in non-conventional oil production (ie. the Alberta tar sands), but these sources are far more expensive to produce. The sands require two tonnes of tar sand and four to five barrels of fresh water to produce one barrel of oil.

"It's the main thing holding up our economy,” she says. “Canada is going to have to ask itself what’s more important; the environment or oil.”

Regardless of all the alternatives emerging, Patterson doubts fossil fuel will ever be completely eliminated. But, for her, it’s about recognizing where we can be most efficient and developing the infrastructure to make it part of everyday life.

“There are some modes of transit that can't function without it, such as the airline industry for example,” she says.

She points to the underuse of energy-efficient rail to transport freight. She also points to Canada’s status as the only G7 country without a high-speed rail system and one of the only countries in the world without rail access to any of its major airports.

As for the roller coaster of world oil prices, Patterson believes the ride will slow down eventually.

"We have a pricing system that's completely out of equilibrium now. I think that what we're going to see the price of oil balance out at $75 to $100 a barrel, which is not cheap,” she says. “There are far better ways to do things. We just have to recognize them and choose to use them."

 

Concordia University