Upside to rising price of the black stuff

By Mathew Dearnaley

Spiralling oil prices are a necessary inconvenience, says visiting American ecologist Richard Heinberg, as the world faces a double-headed monster of climate change and sinking fossil fuel reserves.

"Yes, it causes hardship for some people as the price goes up, but I think we've been cursed with cheap oil," he told the Herald in Auckland, en route to the third national Ecoshow held in Taupo at the weekend.

"It has lulled us into complacency about using this non-renewable resource at ever-increasing rates and we simply can't continue to do that - if it takes high prices to change our behaviour then so be it.

"For the last couple of centuries we've been doing something incredibly stupid - developing economies on the ever-increasing consumption of non-renewable resources."

Mr Heinberg is revered as a leading educator on the concept of Peak Oil, the point at which world production begins a slippery slide from an all-time high, sparking what its proponents warn will be shortages and widespread conflict between or even within nations unless the international community can agree on quotas for curbing demand.

For him, that landmark is already in his rear-view mirror. He says production from oil wells peaked in 2005 at 74.2 million barrels a day and supplies extracted from all sources have declined since July last year.

Oil has meanwhile hit a record price above US$83 ($107) a barrel - more than three times higher than in 2004 - and he predicts an escalation to between US$100 and US$120 by this time next year and "on and up from there".

The black stuff will continue to be discovered but in ever-smaller amounts in increasingly inaccessible parts of the world, such as the Arctic Circle, where extraction will be more likely to damage fragile ecosystems.

Although Mr Heinberg and his books, such as The Party's Over, have been attacked by oil giant Exxon-Mobil as unfounded scare-mongering, even the International Energy Agency predicts a supply "crunch" by 2012, followed by an inability to satisfy unabated demand fuelled by tiger economies such as China and India.

Mr Heinberg acknowledges climate change as a problem of "much greater consequence" for the world.

"But I would say oil depletion is a problem of much greater urgency, because the consequences to human societies will come faster and thicker."

He believes an "oil depletion protocol" by which communities and countries could take greater control over their futures by reducing consumption by about 2.6 per cent a year - equal to his estimate of the depletion rate of world oil reserves - would be easier for the public to grasp than the Kyoto Protocol against climate change.

"It is simpler because everyone is in the same boat. The only way you can reduce vulnerability to supply shocks is to reduce your dependence on oil."

For cities like Auckland, that means intensification of public transport initiatives such as rail electrification and of land use changes to encourage people to live closer to where they work or can catch buses or trains.

And for countries like New Zealand, Mr Heinberg says it means building communities which are more self-reliant and in which more food is produced for local consumption and less for export.

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