What Is Peak Oil and What Are Its Implications for the Main Transport Modes - Case Study Example

Peak Oil What is ‘Peak Oil’ and what are its implications for the main transport modes including cars, trucks, trains, ships and aircrafts. This paper aims to study the concept of Peak Oil which is gaining much recognition in the contemporary world. Its implications in terms of transport modes including cars, trucks, trains, ships and aircrafts will be discussed. Moreover, the economic policy and technical aspects related to the future oil reserves will be studied. This is then associated with the current and future demand of oil and the major oil resources. Questions about the consequences of oil shortage and the substitutes for oil consumption will be addressed. Introduction The oil production and consumption is one of the largest commercial industries in the world (Odell, 2013). Peak oil is basically a concept which emphasizes upon the rapid reduction of oil reserves and its potential consequences. 33 out of 48 major oil producing countries have already reached their peak including Mexico, Kuwait and Russia (Kuhlman, 2005). This suggests that eventually our industrial civilization will come to an end due to the shortage of oil resources. Here, it is important to notify that the earth isn’t losing the oil itself rather it is the human oil consumption which is increasing with every coming day. Research indicates that the present rate of oil extraction can only be sustained for few more years after which the oil production will face a significant decline (Kuhlman, 2005). This can be further substantiated on the basis of the fact that more than 95% of the recoverable oil has already been found. Moreover, geologists confirm that humans have used around 2.5 trillion barrels of oil which constitutes of world’s half oil reserves. Since 2002 onwards no substantial discoveries have been made in regard to greater oil reserves. From the year 1981 the oil consumption has been recorded far more than the rate of its discovery (Kuhlman, 2005). Following figure explains the idea of Peak Oil (Kuhlman, 2005): Implication for Transport Modes Transport industry uses the largest quantities of oil, for instance, in 2006 USA Transportation Sector used 68.9% of the total country’s oil consumption (Jamail, 2011). Hence policy making and planning for transport industry is one of the major challenges for urban economies (Dimitriou, 2011). In order to comprehend the implications of peak oil on major transport modes it is important to first understand the affects of oil shortage on transport system. Transport is significantly dependent upon oil for the energy production. On the other hand transport modes including cars, trucks, airplanes, trains, ships etc. have become the primary need in cities and most of the rural areas. Moreover, the bulk transport of consumer goods, minerals, and other important items is only possible with the help of engines. These engines cannot work in oil shortage (Kilsby, 2007). Aviation industry and the road transport are largely dependent upon oil production. Research reveals that during 2001-2021 around 2.4% yearly increase in transport energy is expected. This constitutes approximately 44% rise in overall transport energy. The major contributor of such intense energy consumption is road fright instead of passenger usage. In addition to this it has been figured out that in 2021 the global oil production would only be two third as compared to conventional oil (Kilsby, 2007). This will have significant impacts over the transport sector and the socio-economic system including defence, agriculture, housing, health, pharmaceutical, mining and tourism will get immensely affected (Kilsby, 2007). In order to meet these circumstances the regular transport modes can be substituted with electricity powered cars. Coal and gas can also be used for public and private transportation. The government will also have to consider nuclear power generation, solar energy, wind power, geothermal energy etc. Moving from oil usage to the renewable energy form would be far beneficial than any other option (Kilsby, 2007). Further implications for transportation will be discussed later in the paper. Technical Aspects and the Economic Policy concerning Peak Oil Basis for the Peak Oil Concept The fundamental concept of Peak Oil is that the nature is finite and that the oil production will eventually reach to its peak. Since there are no quantitative proofs therefore the idea of peak oil is somewhat controversial. However, this can be argued over the fact that governments, oil producing companies or even non-governmental organizations cannot extract oil from the earth more than its ultimate capacity (Hook, 2010). Technically Peak Oil can be calculated through the current rate of oil usage and its reserves. However, peak oil is also referred to the state or point at which the crude oil extraction from the surface of the earth reaches to its maximum rate. Here, it is highly significant to understand the fact that peak oil does not relates to the decline of oil reserves rather it points out the declining rate of oil production (Peak Oil: Background Study, 2010). Another technical aspect associated with the idea of peak oil is that the oil prices are expected to fluctuate extensively in the years 2010 to 2020 (Peak Oil: Background Study, 2010). This would be primary because of rapid oil consumption and slower oil production. The increase in oil prices will subsequently increase the electricity rate and therefore the governments would have to install another energy source for continuing the economic progress. Peak Oil is related with world’s economic policy as most of our businesses, industries and other modes of life are reliant upon oil. Oil gained this important status in the global economy in 1860s when initially it was used as kerosene in domestic lamps. From 1880s onwards it began to boost the transport industry in the form of diesel and petrol. This was the time period when cars, trucks, ships, trains, industrial equipments, agricultural machinery and finally aircrafts became the major contributor of economic development (Peak Oil: Background Study, 2010). Today oil is used in various economic sectors including (Peak Oil: Background Study, 2010): Factories, offices and homes. Agricultural process including cultivation, process and package, transport and cooking. Production of synthetic fibers, lubricants, waxes, fabric, detergents, paints, solvents etc. Oil is also used in pharmaceutical industry for production of medicines. Cosmetics, plastic products including toys are made up of oil. Future Supply and Demand Due to the population growth beyond 7 billion the demand for oil consumption is continuously increasing (Lallanilla, 2013). The demand of oil is also expected to increase due to its non-transport consumption. For instance, today petroleum is used as the major source of energy generation in different industries. Moreover, it is used for the production of plastics and medicines as discussed above. The future supply and demand of oil can be predicted by different indicators including price and policy scenarios. Following graphs are explaining the anticipated supply and demand of oil (The Oil Drum, 2010). Here, price of oil plays the most important role as the oil shortage and its extensive use in transportation industry will actually increase its consumption price. This is substantiated on the basis of Energy Return on Energy Invested (EROEI) (Energy and the Environment 2014). Transport modes in case of oil shortage Aircrafts are most vulnerable in case of an oil shortage because they consume comparatively more petrol and in the present era there are no practical substitutes for aircraft fuel. Then the road transport is vulnerable whereas sea and rail transport are least susceptible in regard to the oil shortage (Kilsby, 2007). Following is the share of consumption of different transport modes (Severance, 2010): Technological and Fuel Alternatives The use of petroleum cannot be substituted but there are certain alternatives which can be used instead of oil in times of shortage. Fossil fuel such as the natural gas, coal, methane and propane can be utilized in transportation modes. However, for this purpose a comparatively complex vehicle structure would be required (Rodrigue, 2013). The oil alternatives are less efficient and therefore they would be required in greater volumes to cover the same distances. The most commonly considered oil alternatives are following (Rodrigue, 2013): Biogas: This usually includes ethanol, biodiesel or methanol which can be obtained from food crops fermentation. It requires large areas for harvesting and the efficiency rate is very low which does not coincides with the requirements of modern transportation sector. Apart from this the production of biogas requires a lot of energy, for instance, the production of single ethanol thermal unit needs the petroleum, coal or natural gas combustion of 0.76 units (Rodrigue, 2013). Hydrogen: It is widely considered as the future energy source. It is made useful for transportation purposes through different steps. These include the hydrogen production through electrolysis or hydrocarbons. This is then compressed or transformed in to the liquid form which is subsequently stored and used for energy production. However, there are number of problems with the use of hydrogen for transportation purposes. Initially it wastes lots of energy during the entire production process. Moreover, it is not cost effective while having very insignificant energy density level. It requires high pressure and low temperature tank for its storage which actually increases the weight of vehicle (Rodrigue, 2013). Electricity: It is largely considered the most appropriate alternative to the petroleum fuel. Electric vehicles are significantly more efficient then the hydrogen ones while on the other hand they are comparatively cheaper and easier to be produced. However, the basic constraints in this regard are the insufficient storage systems which are not able to give speed and extensive driving ranges as compared to the traditional vehicles. Electric cars have comparatively low energy capacity which makes it less competitive. With the technological advancements more efficient electric batteries are expected to come into the market. These would be suitable for urban transportation systems (Rodrigue, 2013). Hybrid Vehicles: These vehicles use liquid fuel for energy generation whereas the engine also provides the option of charging the batteries through a generator. The vehicles are designed in such a way which makes them more fuel efficient. Hence in the times of high oil prices hybrid cars can become a successful development. Moreover, they appear to be the sustainable option in absence of conventional oil reserves (Rodrigue, 2013). The use of non-fossil fuel in transportation industry has some significant limitations. But if the oil prices continue to rise then new technologies would have to be identified. However, the rise in prices of oil will actually cause economic recession subsequently leading to difficulty in technological advancements. Here, coal liquefaction might play an important role as it permits the transformation of coal in to oil. Although its cost effectiveness is yet unknown but this strategy can be used in countries where coal is abundant including South Africa and China (Rodrigue, 2013). Following figure shows the changing balance in the use of oil as new energy sources are emerging (The six essential features of the revolution in the nuclear power decision- making process for the 2010-2020 decade, 2011): Conclusion The above research and analysis indicates that the peak oil will eventually increase the price of available crude oil while also decreasing the amount of oil necessary for transport purposes. This can be further justified on the basis of the fact that oil is a natural resource which one day has to get finished. However, the continuous deduction in the oil reserves will initiate social and economic turmoil as it is the most important source of power generation. Hence governments and technical professionals are coming up with significant alternatives for oil and petroleum. Some of these are discussed above. Although the functionality and efficiency of these alternatives is not up to the mark as compared to the petroleum but still few of them can work well for the public transport system. This signifies that the use of petroleum can be substituted to some extent but to surrogate the entire mode of transport will take enormous amount of time, resources and energy. The rapid rate of technological change might make a difference in future but presently the governments and concerned authorities would have to implement oil storage and carbon reduction strategies. These might be helpful in dealing with future challenges up to a certain extent. References Dimitriou, HT & Gakenheimer, R 2011, Urban Transport in the Developing World a Handbook of Policy and Practice, Edward Elgar Pub, Cheltenham.  Energy and the Environment 2014, Future Timeline, USA, viewed 9 March 2014, Hook, M, Bardi, U, Feng, L & Pang, X 2010, ‘Development of oil formation theories and their importance for peak oil’ Marine and Petroleum Geology, vol. 27, no. 9, pp. 1995-2004. Jamail, D 2011, The scourge of Peak Oil, Future Timeline, USA, viewed 9 March 2014, Kilsby, D 2007, ‘The Impact of Peak Oil on Public Passenger Transport’, Thredbo Conference Series, pp.1-9. Kuhlman, A 2005, Peak Oil: Information and Strategies, Oil Decline, Amsterdam, viewed 9 March 2014, < http://www.oildecline.com/> Lallanilla, M 2013, What is Peak Oil? Live Science, USA, viewed 9 March 2014, Odell, PR 2013, Oil and World Power, Routledge, OXON. Peak Oil: Background Study 2010, Sunshine Coast, Australia, viewed 9 March 2014, Rodrigue, JP & Comtois, C 2013, Transportation and Energy, Hofstra University, USA, viewed 9 March 2014, < https://people.hofstra.edu/geotrans/eng/ch8en/conc8en/ch8c2en.html> Severance, C 2010, How we can end our addiction to oil, Grist, USA, viewed 9 March 2014, The Oil Drum 2010, Oil Demand in the West to Decline, According to the IEA, Oil Price, USA, viewed 9 March 2014, < http://oilprice.com/Energy/Crude-Oil/Oil-Demand-In-The-West-To-Decline-According-To-The-IEA-.html> The six essential features of the revolution in the nuclear power decision- making process for the 2010-2020 decade 2011, LEAP, France, viewed 9 March 2014, Read More