What I’ve Learned Writing About the End of Oil on Medium
It’s sure looking like the loss of affordable oil will kickstart the economic collapse of modern capitalism
This is beginning to look like a series. Following previous summaries of my writings on American politics and climate change, I thought it would be interesting to summarize what I’ve learned about oil, the master resource of our modern civilization. Among the 75 posts I have written since 2020, seven have dealt with the thorny question of where, when, and why our Age of Oil will come to an end. In this post, I’ll review and summarize all seven.
Envisioning The End of Oil
Inexorably wrapped up with the story of climate change is the story of fossil fuels and the demise of the master fuel, oil. How, when, and to what extent we will abandon fossil fuels is the most important driver of the most important question we face today: Can we limit global warming to a survivable level?
Updated Carbon Budgets Could Reset Our Global Warming Expectations
This post asks the question “How late is too late to quit fossil fuels?” One way to answer that question is to look at the projected temperature thresholds at which various catastrophic climate tipping points might occur. Based on a 2022 report on tipping point probabilities and temperature thresholds, transformation of the Amazon rain forest was seen as the earliest and most consequential impending tipping point, estimated to tip at 3.5°C above preindustrial (likelihood range, 2–6°C), within a timescale of 100 years, both estimates made with “medium” confidence. So by this measure, 3–3.5°C might be considered an outside estimate of how much heat the world’s current ecosystems could tolerate.
A second way to answer the question is to ask “How much carbon are we burning, and how much more can we burn before we raise the planet’s average temp to 3°C above preindustrial levels?” That’s a question scientists have been asking incessantly over at the IPCC. To answer it, they have calculated a measure called remaining carbon budget, defined as the maximum amount of CO2 we can continue to pump into the atmosphere if we want to avoid various peak temperatures with various probabilities. For example, in a November 2022 update, IPCC scientists determined that humanity has a 50% chance of limiting warming to 2.0°C as long as we do not exceed a remaining carbon budget of 1,250 GtCO2 (gigatons of CO2). To increase that likelihood to 83%, the carbon budget would have to be limited to 700 GtCO2. And so on for different temperature thresholds and different probabilities.
The rest of the post asks an obvious but very hard-to-answer question: How many gigatons of CO2 are trapped in all the fossil fuels still in the ground and potentially available to be extracted, processed into fuels, and burned? There is a lot of uncertainly about this question because oil companies and petrostates tend to overestimate (aka lie about) their reserves, but several recent estimates tend to hover around the same general levels. According to a 2021 study by Welsby et al., for example, burning all our remaining oil, natural gas, and coal would emit approximately 3,150 GtCO2 into the atmosphere, about 610 GtCO2 from oil, 310 GtCO2 from gas, and a whopping 2,250 GtCO2 from coal. For context, between 1750 and 2021, humanity released about 2,455 (±275) GtCO2 into the atmosphere (source, p. 4834; note: 1 GtC = 3.67 GtCO2).
Looking at a table of carbon budgets, temperature thresholds, and probabilities (appended to the post), we can see that “burning it all” would use up a carbon budget of 3,150 gigatons of CO2, which in turn would produce a 50% likelihood of reaching 3.0°C of warming above preindustrial levels. There’s also a 33% chance of that budget generating only 2.7°C of warming, and a 66% chance of it not getting hotter than 3.4°C over preindustrial times. This gives us a rough upper limit for additional warming due to burning fossil fuels. Importantly, it is most likely an under-estimate, because it does not include CO2 emissions from other sources, such as massive wildfires, nor does it include warming produced by other greenhouse gases, like methane, which scientists predict may be released in high volumes due to melting permafrost in the Siberian tundra (source).
An Update on Carbon Budgets
The carbon budgets reported in the previous post were updated a year later and I reported the changes in this post. Not surprisingly, remaining carbon budgets shrank considerably between 2020 and 2023, thanks to our continued failure to curb emissions following the slight dip we experienced in 2020 (source). As of 2023, these updates show that achieving a 67% chance of holding global warming to 1.5°C will require limiting our additional CO2 emissions, starting in 2024, to 150 gigatons in total.
These findings allow us to start envisioning some timelines. In a separate analysis of the 2023 update, Hausfather calculates how many years it would take to reduce CO2 emissions to zero, assuming we start in 2024 and decrease emissions linearly every year, all the while emitting no more CO2 than the budget allows. Here are his results:
What this chart shows is that a 66% chance to keep global warming below 1.5°C will require reducing CO2 emissions to zero by 2030. Given that the greatest year-to-year reduction in CO2 emissions we’ve ever seen is the 4.9% decline in 2020, the year of the COVID lockdown, what Hausfather is telling us here is that we will need to triple that rate of reduction, every year, over seven consecutive years, to achieve a 66% chance to keep warming below 1.5°C. There is currently no realistic scenario in which that level of reduction is feasible, given both past history and in-place national commitments. It’s going to get hotter.
Why were CO2 emissions in 2020, the year of the global COVID shutdown, only 5% less than they were the year before?
This post continues the discussion of the previous two posts. Using the 2020 COVID shutdown as a case study, it asks how difficult it will be to reduce CO2 emissions from their current annual amounts to “net zero” levels.
In 2020, the world shut down for six months as the COVID pandemic raged around the world. Cars on the road were reduced by 50%, airline flights were reduced by 90%, maritime shipping was reduced by 27%, and global demand for oil was reduced by 30%. Yet, despite these unprecedented decreases in resource consumption and economic activity, emissions in 2020 declined by only 4.9% compared to the previous year. This decline was quickly reversed in 2021, when emissions climbed back up to a level slightly higher than they were in 2019. From this experience, two important lessons follow:
The first lesson of the COVID shutdown is that the huge economic disruptions we all experienced in 2020 actually had very little impact on overall energy consumption.
The second lesson … It’s going to require much more economic disruption than we saw in 2020, if we want to reduce global CO2 emissions by 43% by 2030 [the reduction required to meet the IPCC’s goal of “net zero” emissions by 2050].
We don’t know for certain that the IPCC’s net-zero goal is unattainable, but we do know from experience to date that every effort to reduce emissions at all has been aggressively opposed and/or coopted by the fossil fuel industry and its political allies. For example, oil and gas interests were able to flex their power within the IPCC to remove any mention of limiting fossil fuel production from the Summary for Policymakers in its 2022 report (source). In the face of this resistance, the net-zero “ask” — that we reduce by 43% the additional CO2 we will be pumping into the atmosphere every year between now and 2030 — seems wildly optimistic, at best:
… instead of emitting 37 gigatons of CO2 per year, as we did in 2022, for a total of 296 gigatons over 8 years, we must emit only 57% of that amount, or 169 gigatons. That means our CO2 emissions between 2023 and 2030 must not exceed an average of 21 gigatons per year. The last year in which we managed to release only 21 gigatons of CO2 was 1987.
In the face of hard data like this, it becomes very difficult to believe we will ever end our dependence of fossil fuels voluntarily. Rather, we will continue to delay and dissemble, we will continue burning fossil fuels and dumping CO2 into the atmosphere, and we will continue raising global temperatures to civilization-threatening levels. Absent a voluntary transition plan (driven by acknowledged pain, a compelling vision, and practical first steps) the only way out of this cycle is through the involuntary collapse of our current global economic/political order.
The Oil Age May Not End the Way You Imagine It Will
This was a surprisingly (to me) popular post, receiving over 2,000 “claps” and 40 thoughtful comments. It compares two possible routes by which we might end our reliance on CO2-emitting energy sources. One is a voluntary route, in which humanity’s leaders collectively agree to phase out fossil fuels on a timeline that will give us a good chance of avoiding extinction-level climate change. The other is an involuntary route, in which we allow the oil industry and petrostates to decide when and where they will stop producing oil and, in so doing, thrust the world into its post-carbon future.
My argument is that we are failing to take the voluntary route, even as we are overseeing a massive buildout of renewable energy infrastructure: solar farms, wind farms, various solutions to energy storage, upgraded power grids, EVs, etc. These efforts have so far added to our energy mix, but they have not replaced our reliance on fossil fuels. Emissions and global temperatures continue to rise and climate catastrophes continue to escalate. We are in a kind of no-man’s land, caught between a rapidly deteriorating climate and a growth-addicted industrial system that seems incapable of curbing its appetite for fossil fuels.
There is of course a deep irony in the fact that while we continue burning fossil fuels to keep our global economy afloat, those fossil fuels continue to heat up the planet and produce climate damage that is equally threatening to our global economy, if not more so.
Once we accept the premise that we will not end fossil fuels voluntarily, we can consider the next question: how, when, and where will the Oil Age involuntarily come to an end? The short answer is that we are pretty sure it will happen within the lifetimes of people living today. But if we want to get more specific, we need to look more closely at what I call “the trail of dwindling oil”.
As we use up existing oil reserves, the oil and other fossil fuels that remain in the earth become harder to reach, lower in quality, and more expensive to process into consumable products like gasoline, diesel, and plastics. Over time, the Energy Return on Energy Invested (EROI or ERoEI) decreases as the energy required to produce a barrel of oil approaches and then exceeds the energy released from burning that barrel of oil. In other words, oil will eventually become financially unprofitable and then energetically unprofitable. It will only stop being produced when it costs more to produce it than it can be sold for. At that point, the business model of the oil industry collapses and those companies (and countries) that produce our fossil fuels today will either go into the renewable energy business or go out of business altogether.
And that, I believe, is how the Oil Age will end. My conclusion:
We could do this differently, but we won’t. If you want to know when fossil fuels will end, my advice is not to listen to government officials or the IPCC. Instead, follow the trajectory of oil, gas, and coal production. Watch the adoption rate for alternative energy solutions, like carbon-free shipping fuel, aviation fuel, or steel production furnaces (source). Look out for the emergence of fossil fuel supply shortages, price spikes, and rationing. Fossil fuels will only end when they can no longer be profitably produced. At that point, whatever alternative energy infrastructure we have in place will provide our only access to energy for the foreseeable future.
We will never stop the fossil fuel industry by banning it
This post begins by asking why the fossil fuel industry doesn’t proactively invest in electrification solutions as strategically smart alternatives to CO2-emitting fossil fuels. The answer is simple: profits. Industry analysts have observed that investments in oil and gas projects are currently rewarding oil companies with returns of 20–50%, while investments in renewable energy projects are yielding only about 5–10% returns.
So it’s a simple business decision for the oil giants. They pursue the path that leads to the highest profits, any externalities or environmental damage inflicted along the way is someone else’s problem.
That calculus would change, of course, if oil companies were held accountable for those externalities and environmental damage. But it is unlikely they ever will be, because political leaders know that if the full cost of fossil fuels were built into every unit of energy delivered, no nation, not even the richest, could afford it.
The post then examines a fascinating recent podcast discussion between oil industry expert Art Berman and climate activist Nate Hagens, in which Berman explains what has been going on with American oil production in recent years, and what this portends for the eventual depletion of oil within the US. Berman illustrates his argument with the graphic below, which shows the rise and fall of US oil production since 1970, highlighting the big surge in “tight oil” production — that is, oil extracted from shale and limestone rock using hydraulic fracturing, or “fracking” — which started in 2008.
Berman goes on to show how this “tight oil” boom is likely to be short-lived, due to the fact that oil companies are over-producing in these fields, essentially sucking 20 years worth of oil out of the ground in 3–5 years. Berman predicts these fields will deplete much faster than the industry is claiming:
The result could be a return to the precarious position the US found itself in back in 2008: panic over the possibility of inadequate supply, a sudden spike in oil prices, a subsequent contraction of economic activity and GNP growth, recession, a steep decline in demand for oil in commercial, industrial, and transportation sectors, and a collapse in oil prices from record highs to unsustainable lows (source).
And this is how the loss of affordable oil is going to kickstart economic collapse in the rich Global North.
As Berman and others (e.g. source) have noted, the fossil fuel industry faces big challenges beyond depletion: declining investor interest, growing regulatory restrictions, and increasing competitiveness of alternative solutions, to name three. As renewable energy production and storage become both more accessible and significantly cheaper than comparable fossil fuel solutions, demand for fossil fuels will continue to weaken, decreasing consumption alongside these expected decreases in production and supply (source).
The post concludes by noting that eventually, probably well before 2050, there is a significant chance the oil and gas giants we love to hate today will either be out of business or will have transitioned themselves into renewable energy companies (source).
Papering over “overshoot”
This short piece highlights the recent rise of the term “climate overshoot” to describe a scenario in which we exceed (overshoot) the IPCC carbon budgets (see above posts on carbon budgets) for limiting global heating to 1.5°C or 2.0°C above preindustrial levels. Rather than acknowledge that exceeding those budgets would risk raising global temperatures to life-threatening levels, oil industry boosters are instead claiming that we can blow through our carbon budgets today, deliberately raising temperatures above target levels, because at some point in the future we will invent new technologies to suck all that excess CO2 back out of the atmosphere, bringing temperatures back down to target levels.
If you want to know who is supporting these carbon capture and removal “solutions”, just take a look at the ads popping up inside any business-oriented web article you might be reading.
These “carbon capture saves the day” scenarios have gained traction in recent years because IPCC modelers have been unable to find a formula for reducing emissions to “net zero” that is compatible with ongoing economic growth (source, see also this excellent piece by Paul Abela). So these models now posit that we can continue to grow and blow more CO2 into the atmosphere, because — rest assured — at some point in the future we will build a planet-spanning array of giant atmospheric vacuum cleaners that will pull that extra CO2 back out of the air, bringing our “overshoot” back down to “net zero”, and lowering warming back down to 1.5°C (source).
The questionable feasibility of these carbon capture and carbon removal technologies to play this hoped-for role in IPCC climate overshoot scenarios has been challenged by climate scientists who are, to say the least, skeptical (see, e.g., source and source). Yet these projects live on with oil industry support, funneling billions of dollars into investments that so far show little sign of achieving anything close to their ambitious goals.
Coopting the term “overshoot” may also have another purpose. It obscures the original meaning of the word, as defined in William Catton’s 1982 book, Overshoot. This may be a coincidence, but it’s fair to say that most political and business elites who are wedded to the concept of unending economic growth would not be disappointed if people stopped talking about the reality of carrying-capacity overshoot, which is as great a threat to economic growth as climate change itself.
CCS and CCR are examples boondoggle climate projects. How and why boondoggles are diverting both private and public funding away from more worthy and practical climate projects is discussed in the next post.
How to spot a boondoggle climate project
This post begins by discussing the original climate boondoggle: ethanol, a biofuel derived from corn and mixed into gasoline, purportedly to promote energy independence and fight climate change. Its real purpose was political, to reward corn farmers in Iowa (an early primary state) with a lucrative market for their crop. As a political gesture, it succeeded: today, 57% of Iowa’s corn crop goes to create nearly 27% of all US ethanol (source). Unfortunately, as a climate change solution, ethanol-infused gasoline is a loser: it consumes nearly as much energy to produce as it yields when burned, it diverts farmers away from devoting farmland to other food crops, and it actually results in greater CO2 emissions along the full field-to-fuel process than regular gasoline.
The post then contains a long section on carbon capture and removal technologies. Like ethanol, carbon capture is predominantly a solution to a political problem, not a climate change problem. Investments in carbon capture have been incentivized in the US by the 2022 Bipartisan Infrastructure Law which, among other investments, commits $3.5 billion to the construction of four carbon capture “pilot” facilities, each of which is expected to remove about one million tons of CO2 per year. Four million tons may sound like a lot, but taking that much CO2 out of the air would clean up only 0.0001% of the 4.8 billion metric tons of CO2 the US emitted in 2023 (source). Scalability alone renders this so-called solution impractical and unattainable. Yet, billions of dollars from both private and public sources are pouring into this sector. Why? Because somebody is making a lot of money. And it has nothing to do with slowing down climate change.
What is the cheapest and most effective way to remove CO2 from the atmosphere? Don’t put it there in the first place.
After discussing a third classic boondoggle investment opportunity — nuclear fusion — the post wraps up with an explanation of how investors are making money from boondoggle projects, even when those projects fail to achieve their ambitious and unrealistic goals. The process has been called venture predation. It involves five steps: (1) early investors pour huge sums into a technology startup, giving it a competitive advantage in its sector, (2) a narrative is constructed as the startup achieves a series of minor milestone accomplishments (all far from the ultimate end-purpose of the technology), (3) a second round of less-savvy investors is convinced to invest on the promise of continued success, (4) the early investors cash out, and (5) the startup is allowed to run its course, leaving those later investors stuck with its eventual losses and closure.
My conclusion: boondoggles are a significant waste of time and money but excellent examples of how the profit motive underlying late-stage capitalism makes it difficult for investors to deal constructively with climate change.
What we are seeing with the rise of boondoggle climate projects like carbon capture and nuclear fusion is a dangerous skewing of the world’s time, effort, and resources away from much-needed practical climate mitigation and adaptation initiatives and toward short-term, money-making distractions unlikely to achieve any measurable impact on climate change. This is a waste of time and money we cannot afford. It is one more reason why our descent into degrowth is looking both more inevitable and more likely to happen involuntarily, not voluntarily.
That’s it. The story of the end of oil is a complex one, but two facts are indisputable: oil remains the master resource powering our civilization, and we are using it up. How long it will last, where it will disappear first, and how we will choose to utilize remaining reserves as the climate continues to deterioriate, are all highly uncertain for many reasons, not least of which is the fact that the oil industry and petrostates are extremely secretive about how much oil they actually have left. Recently, the Norwegian energy consultancy Rystad Energy, for example, determined that “proved” reserves may only be about one sixth that touted by EIA, OPEC, and BP. Humanity is flying blind into a future that is becoming more and more dangerous and more over-determined every day. As with other aspects of our unfolding polycrisis, we will need to remain vigilant for signs of impending collapse of the oil industry, as increasingly unprofitable fossil fuels begin to disrupt our current oil-based global economy.
