Peter does not talk about "Peak Oil" but about "the coming oil break point”. Exactly how these terms differ from one another is not easy to know, and one may speculate about the reason(s) for Tertzakian to avoid the more conventional/well-known term. My guess is that it is not easy for someone who works in the energy industry - and is richly rewarded for his efforts - to undermine or create too much suspicion about the sustainability of the current system. You may discuss the challenges ahead in terms of "enormous changes", but you must also strive to find the right tone and a balance between your concerns and your utmost confidence that we can and will cope with these problems.
It is a bit strange though, because Peter describes exactly the same grim picture as more conventional oil peak advocates do when he talks about today's energy realities: that oil production in the United States peaked in 1970, that our oil thirst is unquenchable and unsustainable, that all the major oilfields in the world have been discovered and that the trend is that we find less and less oil each year. Today, a newly discovered "large" oil field satisfies the global need for oil only for a few days or weeks. One example is the Hibernia oil field off Newfoundland, Canada. It is one of the major oilfields discovered during the past 30 years, but the total (estimated) amount of oil there is equal to only 11 days of global consumption.
The "break point" that Tertzakian referers to is one of four phases in a cycle that each dominant source of energy passes through: Pressure buildup, Break point, Rebalance and Growth and Dependency. The oil crisis of the 1970s marked a break point which caused a nearly fifteen year long period of rebalancing. We are now, since 2001, in the pressure buildup phase, and this time the break point and rebalancing phase will be more dramatic, longer and more difficult, since there are no easy solutions, no new technologies and no suitable energy substitutes that can solve our current problems.
A recurrent theme in Tertzakian’s book is that changes in our energy infrastructure take time. The size and shape of our infrastructure and of the energy industry today is the result of decisions made one or more generations ago. He compares this with the "abrupt" and smooth transition from whale oil to kerosene, a shift that took "only" 20 years during the second half of the 1800s:
"Changes in the world of energy are measured not in months, not in years, but often in decades. The abrupt transition from whale oil to kerosene took less than two decades. In the history of energy substitutions, that’s a duration of time akin to an eye blink."
This "quick" shift can be compared to the transition from wood to coal, a shift that took 75 years (1825-1900) despite the fact that coal is in many ways superior to wood (it contains more energy per unit volume, burns hotter and does not rot). The more we build on and refine our current solutions (the "Growth and Dependency" phase), the more difficult the transition to some other form(s) of energy:
”Recasting consumer habits is a large undertaking, but the primary obstacle to real change comes from the inflexibility of the technological standards and physical infrastructure that are placed up and down the energy supply chain. For example, our oil-fed energy supply chains have developed over a 145-year-old growth cycle […] We are dependent on this multitrillion dollar global infrastructure as much as we are dependent on the petroleum that feeds the entire supply chain.”
Since the development of new energy sources and technologies in the energy field takes decades from experiments to scalable applications, Tertzakian emphasizes that during the next 10-20 years, there is no radical new technology ("no magic bullet") that will solve the problems we face today.
On the contrary, oil has many attractive properties that no other energy source has. Oil for example contains a lot of energy per unit volume, is easy to store, easy to transport and easy to scale up. Unlike previous transitions, the coming transition will be a switch "down" to energy sources that in some respects are "not as good" than oil. This makes the problem of finding replacements even more challenging, and the transition more difficult, longer and harder to get going. Exactly because oil is such a flexible and powerful energy source, we have found so many uses for it, and at the same time made ourselves completely dependent on it. According to Tertzakian, gasoline and diesel are nothing less than "the Microsoft Windows operating system of the transportation world."
“The better and more robust a fuel is, the more we put it to work in our daily lives. In turn, the more successful a fuel is, the more necessary it becomes to the well-being of the overall economy. This creates a dependency that grows deeply rooted over time.”
Tertzakian reproduces an imperialistic quote in the spirit of harsh realpolitik that Richard Nixon uttered in the midst of the oil crisis of 1973. Nixon pinpoints the positive aspects of increased energy usage (which goes hand in hand with increased economic growth), but completely misses the negative aspects of increased dependency and increased vulnerability:
”There are only seven percent of the people of the world living in the United States, and we use thirty percent of all the energy. That isn’t bad; that is good. That means we are the richest, strongest people in the world and that we have the highest standard of living in the world. That is why we need so much energy, and may it always be that way.”
The only thing Nixon forgot for the quote to be “perfect” - completely updated and adapted to Bush-speak - was to ask God to bless the United States... In the early 1970s, the U.S. imported 10% of its oil, but 35 years later that figure has risen to over 65%, and the country is now so stuck in that trap that it has to go to war (Iraq) in order to secure its oil imports.
How many new sources of energy have been introduced over the past 100 years, Tertzakian asks rhetorically. The answer is one (1) and that power source is nuclear energy which currently accounts for approximately 6% of the world's total energy production (about one-sixth of the oil's share). Renewable energy sources (solar, wind, geothermal, wave energy) are this far insignificant and associated with theoretical and practical problems that make it difficult for them to play a major role in the industrialized countries' energy mix for at least the next 10 years. Tertzakian claims that they may be useful in the rebalancing process after a break point, but they will not in any meaningful way replace oil or avert the coming break point (energy crisis). Another example of the long lead times to develop new energy sources is Canada's oil sands. To my surprise I learned that the history of mining oil sand in Alberta started already 40 years ago – and only recently reached substantial volumes.
In the book's first chapter, Tertzakian tells the story of our hunt for whales. In 1751, it was discovered that spermaceti oil from Sperm whales (and later whale oil) was valuable. Every Sperm whale may carry up to two tons of spermaceti oil in its skull and the function of this oil is still not completely understood. But humans know what the oil may be used for - namely to produce candles. Since these candles were better than any comparable alternative, the whaling industry expanded in the subsequent decades. 100 years later, whales had become scarce and you had to go to the ends of the earth and back again on trips that lasted up to four years in order to find the whales (a chapter in the book is actually called "To The Ends of the Earth"). Just in time before the whales got extinct in the mid 1800s, the fossil fuel kerosene took over the task of illuminating our homes and our growing cities.
Tertzakian makes a point of the observation that our quest for oil today is just as desperate as the hunt for whales was a few decades into the 1800s. Today we hunt for oil in every corner of the world and we head off to the most inhospitable environments, the deepest oceans and the most politically corrupt and unstable countries in our quest for more oil. Unfortunately, the good oil -- "light sweet crude" – is becoming harder and harder to obtain:
”For light sweet crude, the evidence strongly suggests that we are very close to Hubbert’s peak, and that we have reached the stage […] where we must start exploiting secondary and synthetic sources to prolong the onset of the overall oil peak.”
It is impossible to get any closer to the theory of peak oil without actually embracing it. As the "good" oil is running out, we must now turn to the worse, "sour" oil that contains more sulfur, costs more to refine and is more harmful for the environment. Other alternatives are even worse, for example Canada's oil sands - a source of energy that no one would have considered if the better options had still been easy to exploit. After the lowest hanging fruit has been picked, we should from now anticipate more expensive oil. This has implications far beyond more expensive transportation, since our entire society and everything we consume directly or indirectly depend on oil and petroleum products (for example plastics).
Thus, it is obvious to Tertzakian that we approach the mother of all break points and that the effects will reach into every household and every home. The four phases of the break point are 1) complaining and paying up, 2) conserving and being more efficient, 3) adopting alternative energy sources and 4) making societal, business, and lifestyle changes. This process could easily last for decades. Regarding the fact that we currently do nothing or very little to prepare for the coming break point, Tertzakian writes:
”At a break point […] lifestyle changes can seem like painful sacrifices until we readjust. It is the pain of those sacrifices that makes any political administraion reluctant to tell the whole truth about our energy situation. Until the evidence of the need for change is more obvious to all citizens, it will be difficult politically to make the necessary tough choices.”
Tertzakian soberly notes that today's politicians have nothing to gain, but much to lose by trying to act proactively. Since there are no quick solutions with immediate positive effects and no political gain in making decisions which make sense only in the long term, politicians prefer the (non-)strategy of “wait-and-see”.
An example is the issue of raising taxes on gasoline in the United States. Such a decision would be very wise in the sense that it would "encourage" people to make the "right" personal financial decisions. But it would also be political suicide. In the United States, the individual's right to buy the car (or SUV) he or she wants is just as holy as the right to own a gun - and there are a lot more car owners than gun owners in the U.S… There are also many practical problems with a high petrol tax. In order for such a tax to be efficient, there must be functioning alternatives to using a car in the form of public transport. In addition to high costs for expanding public transport, it is also exceedingly difficult to make it work in the United States after 20+ years of emigration to suburbs which have been spreading in all directions around American cities.
At the end of the book, Tertzakian paints himself into a corner in his attempts to propose solutions that on one hand will have some effect, and on the other hand will be "lifestyle neutral". There are big savings to be done regarding personal transports (cars), but it all ends up in a few weak proposals about smaller and lighter cars, lower speed on the roads and other bits and pieces of plaster on these open wounds. On the whole, however, the book is a nice read. Its main merit is to give an understanding of how difficult, challenging and time consuming it is to switch away from the oil infrastructure we have been building piece by piece for more than 100 years. The author’s analysis is good, but the concluding recommendations are a bit too weak to stand on par with the size of the problem. A review of the book which draws attention to completely different aspects can be found here.
Since I bought this book, Tertzakian has published another book: “The end of energy obesity: Breaking today's energy addiction for a prosperous and secure tomorrow".