Article Image

IPFS News Link • Oil

The Narrative Problem After Peak Oil

• by Tim Watkins

The shock was all the more profound because, with the earlier exception of the USA, all of the developed states had completed the transition of their economies from coal to oil during the unprecedented boom years 1953-1973.  In Britain, for example, the national coal-powered rail network which might have mitigated the impact of the oil shocks had it followed Europe and been electrified was savagely cut in 1963.  Instead, Britain followed America's lead; building a new network of three-lane motorways and building a massive fleet of freight lorries to replace much of the rail freight.

The switch from coal to oil had primarily been driven by the huge value provided by both the additional energy-density of oil and by the storage and transportation benefits of liquid fuels.  Unspoken though, was the assumption that oil reserves would – for all practical purposes – be infinite.  If one oil field ran dry, geologists would find another while engineers provided the means to extract it.

This appeared to be the story of the 1970s too.  Yes, the economies of the developed states took an inflationary hit.  But the increased cost of oil paved the way for new deposits in Alaska, the North Sea and the Gulf of Mexico to be opened up.  And while prices never quite fell back to their pre-1970s level, they fell sufficiently by the mid-1980s to allow a new round of economic expansion to begin.

Free Talk Live