It’s been quite a while since the last big fuss about ‘peak oil’: hardly surprising, once oil fell from its pre-crash peak. A guy who made a lot of that fuss is back giving his post-crash perspective in a video. He believes the ‘local vs. global’ balance could be about to change
On stage answering questions from moderator Paul Waldie with Jeff Rubin is Andrew Nikiforuk, author of Tar Sands: Dirty Oil and the Future of a Continent.
Hey, am I imagining it, or does Jeff have a speaking style here that’s more than a little reminiscent of actor Jack Nicholson?
Rubin’s just too good at this: he could probably get away with saying just about anything and still sound pretty convincing, but his book Why Your World is About to Get a Whole Lot Smaller: Oil and the Death of Globalization won this year’s Canadian NBA Business Book of the Year award (former winners include Naomi Klein‘s best seller No Logo) so perhaps it’s worth paying attention.
Directly relevant to Rubin’s express concerns is the frequently cited Death of Distance, a book by Economist editor Frances Cairncross, originally published in 1997 and revised in 2001. It initially focussed upon the impact of the telecommunications revolution.
For a while after the 2008 financial crash, it looked like Rubin’s dire predictions (that the spiralling oil price would resurrect the spectre of distance by increasing the transport costs of imported goods) had been at best premature.
In the panel session in this video he argues that the crash itself was the result of the impact of oil prices on inflation (whose formerly low rates had, up until the crisis, prevented subprime mortgages from being revealed as unsustainable).
He is convinced that only another further recessionary plunge will now prevent the oil price quickly reaching his projected ‘distance resurrecting level’ of hundreds of dollars per barrel. He believes that expensive oil will inevitably ‘send us off the road’ and force us to ‘go back to local’ and to buy, make and use things much closer to where we live.
Objections to dire peak oil scenarios have pointed to mostly untapped oil resources such as sand and shale extraction, which offer sufficient abundance to be able to keep us almost indefinitely supplied.
In response to these objections, Nikiforuk goes into detail on the extent to which disproportionately high extraction costs, both in financial and environmental terms, of all the currently unexploited oil sources, would mean that whilst they would certainly guarantee the continued availability of oil, they would not be able to prevent the price from rising as the world’s existing ‘easily accessible’ oil sources approach their limits.
If you accept their view, only a reduction in demand, resulting from a further economic decline, could delay or prevent Jerry Rubin’s pre-crash ‘rebirth of distance predictions’ from being reborn.
This event, a session called The Future of the Oil Economy was part of the 2010 Globe and Mail Open House Festival, held on Friday, April 30 at the Rotman School of Management in Toronto, Canada.