Summary: Cheap oil will be totally depleted within 40 years if it continues to be used at the current rate.

Long before then - and unpredictably when, or how many times, and of what duration - wars, cartels, political coercion, and political events will very likely cause 'fear based' panic price spikes unrelated to any physical drawdown of reserves.

While, war, sanctions, blockades, price spikes and subsequent recessions may very slightly draw out the depletion, paradoxically, fear and strategic considerations may force the necessary massive capital re-allocation to within-national-boundary renewable energy.

It is unlikely that all other sources of energy (gas, coal, hydro, nuclear and minor sources) will be able to replace even 50% of current oil use, because the projects are so big they need to have started already; but because oil is presently cheap, they can't be 'justified'. When they can be justified, they will be much more expensive due to the now high price of oil. Economic downturn - due to the high price of oil - will make the vast sums of money needed less readily available.

Because the ameliorating effect of large projects to increase coal and gas production, build more hydro and nuclear plants, install energy saving devices, solarize, and so forth won't be there, energy will be more expensive than it would otherwise have been.

The adjustment will be large anyway. It will be much larger than it might have been if any foresight had been shown by politicians, or if educators had examined the issues in schools and colleges.

When countries 'have to' explore widescale decentralisation, conservation, solar adjunction and a thousand little projects that together might make a relative lot, it will be so close to 'the bedrock' that reaction time may not be long enough, and rather sudden and traumatic adjustment might result.

How much oil prices rise will influence consumption demand, and thus how long oil lasts. It may last many hundreds of years when it is permanently very expensive, and therefore relatively little used.

When these permanently high prices cut in is guesswork. A guess  based on the peak of production depends on estimates of that peak. In the range from 2004 to 2006, a best case says oil won't be permanently expensive until about 2018. A worst case scenario says permanently expensive oil at or about 2011.

Neither case takes into account, on the abnormally high side, temporary price spikes caused by regional political scares, including, but not limited to, regional wars and blockades. Or, on the abnormally low side, short term US overpumping of its Iraqi fields to drive down the price for internal political reasons. Demand fall off (especially in Asia and USA) caused by the inevitable recession that accompanies initial adjustment to higher price plateux, and the consequent steep erosion of the USA dollar as a currency of value .

Is the oil economy starting to fade?
Yes. Here is the argument. The data is from BP Amoco's 'Statistical review of world energy 2000'.

This is the data. Total world oil reserves are 140.4 billion tonnes (US 'billion'). 3.46 billion tonnes are burnt every year - about 95 million tonnes a day.

Simple math - dividing the total world oil reserves by the annual world consumption rate - tells us how long the reserves will last. At the rate that we burnt oil in 2000, world oil reserves will be totally used up in 35 years.

Converting tonnes to tons (~ 3 407 million tons) and using the oil industry rule of thumb of about 7.33 barrels to the ton, we find we were burning about 24,973,000,000 barrels of oil a year in the year 2000 - about 68.4 million barrels a day.

In early 2005, the commonly quoted figure is 83 million barrels a day - meaning world annual oil consumption has actually increased by an additional 5,322,000,000 barrels a year over and above year 2000 consumption levels. Oil will last less than 35 years.

The figure in the table for world consumption is thus now (2005) around 3 467 million tonnes consumed every year.

Will we find new oil reserves to replace the ones we are using?
We will find new oil fields. Oil fields anything near the size of the Middle East reservoirs will not be found. The earth has been relatively well mapped for 'giant' fields such as those of the Middle East. There are no more to be found. In spite of intensive searching, in the past 20 years only three giant fields with more than a billion barrels has been found - in Norway, Columbia, and Brazil. Two of these have passed they peak of production already, the last will in the next few years. Between 1990 and 2000, about 42 million barrels of new oil were found - and 250,000 million barrels were removed by consumption from global reserves. Small fields continue to be found, and will continue to be found (the fields due to come on stream in the next 7 years are all small - around 100,000 barrels a day - with the exception of the Saudi Khurais field, projected to pump at 1.2 million barrels a day starting 2009). But most fields are just that - small.

New small fields make no significant difference to the overall picture. Such is the overall rate of oil use, even a big newly reworked Saudi field makes no material difference to the outcome. Currently, for every one barrel of oil from new finds running into our 'supply tank', there are four barrels withdrawn from it. Oil hasn't run out already only because it is such a large tank. But the level is falling every day - much more is being taken out than is being put in.

What about polar oil?
This article is discussing the end of cheap oil. Polar oil and deepwater oil reserves are excluded from most assessments of available oil reserves for good reason. The Hibernia Oil Development project in the North Atlantic illustrated the point - it is inaccessible, at 195 miles off the coast of Newfoundland. It is reported to have required "450 000 million tons of reinforced concrete" to resist the impact of icebergs that may weigh up to 6 million tons; the project has taken ten years, and around 6 billion dollars of capital expenditure will have been sunk before full operational capacity is reached. Operational costs in such a hostile environment add another about 5 billion dollars in expenses. The project needs, by one estimate, to sell oil at a minimum of about $19 a barrel average over the 19 year life span of the field in order to simply cover building and operating costs. It could not have been built without massive public subsidies from the people of Canada. Hibernia shows that exploiting deep water and semi polar oil fields is possible. It also shows that such oil can never be cheap oil. The field is counted as large for a recent discovery, with about 102 million tonnes of oil, but it is not a giant field.

Can we replace the oil with coal, natural gas, hydro power, nuclear power, solar power, or a mix of these?
Oil shales
What about oil shales? As conventional oil runs out, we can turn to these deposits. Around two thirds of these are in the USA. The Colorado Plateau oil shales for example has 2 billion barrels of kerogen (not oil - the 1% organic component of the rock has not experienced sufficient heat to transform into oil).  Billions have been spent trying to modify kerogen into oil. All experiments have finally been abandoned as too costly, and with too many operational problems. Oil Shales, by one estimate, can't be produced for less than $60 per barrel. The operation also uses enormous amounts of water, and creates very big environmental problems.

Oil sands (Tar sands)
Alright, what about oil sands, then? Canadas Athabasca oil sands alone, for example, contain about 2 billion barrels of oil! They currently produce 500,000 barrels a day. Current new investments hope to bring in an additional 284 000 barrels a day by about 2003. It is a problem of scale, in part. Even creating the plant and investment to scale up by ten times - a huge undertaking - and there is still only 5 million barrels produced a day. The world currently [2005] uses about 83 million barrels of oil a day. In addition only 100 billion 'barrel -equivalents' of the sands can be mined by surface mining. The remainder would be underground extraction, an enormously expensive proposition. Sub surface extraction uses natural gas as a carrier for the tar. Further gas and coke is used in creating synthetic oil from the bituminous sands. From 25% - 30% of the ultimate energy value of the synthetic oil produced was used up in creating it.

Hydro electric power
But what about hydro power? After all, electricity from hydro can be used it to split the water molecule into its constituent oxygen and hydrogen gases. The hydrogen gas can be used directly in vehicles. Or it can be run through a fuel cell and re-converted to electric power to drive an electric motored vehicle.

True. But first, we can't re-direct existing hydro electricty from home and industry supply to splitting water to make hydrogen gas. The power is already committed to existing users. But say we ignored the use of oil to heat homes - coal, gas, wood and better insulation can do that - and tried to replace even half of current oil use - assuming half the oil is used for transport - with electricity to make hydrogen gas for transport. The heaviest energy users, USA and Japan, would need to build enough dams to generate about 16 times more hydro power than currently produced! There simply are not the rivers in existance to dam. Only China is able to significantly increase its hydro capacity, in the Three Gorges Dam project, not expected to be completed until 2010, providing 85 billion kilowatt hours .

Coal
Then there's coal. There are massive amounts of it. But again, we can't re-direct existing coal power station derived electricty from home and industry supply to splitting water to make hydrogen gas. The power is already committed to existing users.

Coal can be heated in a 'coking oven' to drive off 'coal gas'. 60% of the original weight of the coal remains as heat expanded 'coke', which can itself be re-used as a fuel, albeit a poorer fuel than the original coal. The other residues are potent tars and other undesirable pollutant chemicals.

The compressed manufactured coal gas could be put through fuel cells and converted to electricity, which can be used to power electric cars or for home or industrial purposes. But manufactured coal gas has a low 'thermal content' per unit volume of gas - about 100-150 British thermal units/cubic foot. So while coal could be used to manufacture coal gas for use in fuel cells, in practice its fuel inefficiency, and the vast physical amounts that would need to be processed, put it out of the picture.

 It would be far more efficient to burn coal in technologically advanced, non-polluting sound-pulse steam engines, and burn it to generate electricity for short-range, small, battery powered person transport.

But looking at it on a straight oil energy equivalence basis, most countries - that have coal reserves - would need to at least double existing production to replace even half the oil currently used worldwide. Some countries, such as China, have both low oil dependence and large coal reserves with attendant well developed coal based infrastructure. Such countries are relatively insulated from oil price rises and oil shortage. Overall, a great deal more coal will have to be mined, transported and burned is additional electricity is going to be used for battery or hydrogen gas powered personal transport, even at half the amount of  present use miles we do in personal or business vehicles. And at least double the present number of coal burning electric power generating stations will have to be built.

Importantly, the low-hanging fruit is already being picked. Easily accessible, energy dense, low-sulfur, low-fluorine coal is already being heavily mined for existing industrial and electric power-plant use. When we are desperate for coal, it will be deeper, lower-energy, dirtier, and further away. The cost of machinery to get it out of the ground and transport it will be much greater than today. Electricity from coal will be expensive, in money terms and in pollution terms.

And in the end coal itself will run out. Mining additional coal to replace even half our current oil use, plus the current rate of mining for present electricity and industry needs will see the coal run out within 170 years anyway. Presuming coal rich countries were willing to sell their coal to those with few or no coal reserves. In the same way the countries of the Middle East are willing to sell their oil to countries with few or no reserves.

So in a fair and equitable world, well regulated to share supplies, within 170 years oil will be effectively gone, and so will coal.

Natural gas

Petrol and diesel can't be replaced. No other widely available high volume fuel can give a substantial travelling distance without constant refills. This is because petrol and diesel are highly concentrated energy forms relative both to their weight and the space they take up. These liquids are both simple and safe to distribute and store at gas stations, and simple and safe to store in the vehicle. Nothing is as energy dense, safe and portable as petrol and deisel.

Only natural gas comes somewhat close to petrol and diesel as a realistic alternative fuel.

People are quick to point out that natural gas reserves roughly equal crude oil reserves, in terms of  in total energy content. What they omit to point out is that natural gas reserves are being used at a rate about two thirds the rate oil is being used. At current consumption rates (2000) global gas supplies will last about 63 years. But if we try to replace even half our current oil consumption rate (mainly consumed in transport) with the energy equivalent amount of natural gas, the global gas supply will only last 34 years.

As with oil, reserves are unevenly distributed around the world, some countries being gas rich, others with none. The life of gas fields vary considerably. Some are near the end of their life, others will last 5 or 6 years more, others longer still. It depends on the rate of depletion. And the rate of depletion depends on whether there is an infrastrucure, such as a pipeline network, that allows the gas to be used easily. The size of the infrastructure, and the relative cost of oil and electricity also affect how much demand there is for the gas. Unlike oil, gas is much more difficult to distribute. Inland gas fields must distribute their fuel in pipelines that might have to cut across many national borders to reach the end users. Given the very small number of democracies in the world, this means that the pipeline travelling through unstable autocracies is at risk at any time in the future.

The problem can't be solved by making synthetic gasoline from the natural gas, because the point at which it becomes economic to build the very expensive plant - when oil is permanently at $US48 per barrel, by one estimate - is also the point at which natural gas becomes more desirable as a fuel to use directly, and thus more expensive. Therefore the plant is uneconomic until the price of oil is even higher than $US48 per barrel. At which point gas is likely to be nearly as expensive a fuel as petrol will be.

The global outlook is different from the 'per country' outlook.

As long as a country isn't 'locked into' a long term contract to supply natural gas to a foreign corporate or multinational, it can use it's domestically produced gas to either make syn-fuel for local certainty of supply, run it through fuel cells for use in electric cars, compress it and use it as a direct fuel for all petrol motor powered vehicles, or even use domestic fuel cells to produce electricity for home use. For example, countries comprising the former USSR (taken together) with vast natural gas reserves would remain fuel independant for longest. But even in the most implausibly optimistic of scenarios, the gas will be gone within about 100 years.

On the other hand, countries with a similar rate of consumption to the former USSR countries, but with moderate gas reserves, are in trouble. If the USA, for example, only used its own domestically produced gas reserves, it would only last about 7 or 8 years before being all gone. Any effort to use natural gas in fuel cells or to form synthetic petrol will simply use it up that much faster. USA, as with most west Eurasian countries, will have to import gas to use in electric power generation. There is no chance that gas can be imported at a 'cheap rate' to provide 'cheap fuel' for cars.

Global gas supplies will be increasingly expensive as the world turns to gas for power. The same phenomenon will happen as gas runs down and the world turns to coal. The cheap, clean and easy coal is going fast already.

Nuclear Power
Power generated in nuclear power plants would be a very useful energy source if not for the costs of disposing of 'spent' uranium reactor fuel rods. Thats not dollar cost - real as it is. Thats the unnacceptable risk from plutonium in particular, and risk from 'fission products' - new radioactive substances such as strontium 90, amongst others, formed in the process of nuclear fission to make heat for making steam for the turbines that make the electricity. The Chernobyl reactor was a bad design, and modern reactors are much safer. But that is not the issue. The issue is safe long term containment of very dangerous substances that until the first nuclear bomb, did not exist on earth. But are now spread in small amounts around the globe. We must discount nuclear energy because the waste products of 'spent' fuel rods (about 40, 000 cubic feet of spent rods per year from USA reactors alone - each rod being about one third unused uranium), cooling liquid from the 'spent' fuel rod storage baths, and the old decommissioned contaminated buildings persists beyond this generation, the next, the next, and far beyond.

Almost no countries are considering generating electricity from new nuclear reactors (France is the exception, but this is partly a political decision tied to the men in the military wanting to make more nuclear bombs, and partly because it has almost no domestic hydrocarbons of any form). Some are considering 'phasing out' existing nuclear power generators.

The worlds highest consumer of electricity from nuclear reactors is, unsuprisingly, USA. Around 21% of electricity comes from nuclear power generation, just after coal. Even in such a dependent country, it is unlikely that more reactors will be built (there are 109 at the moment) - even if they could be built in time - to supply electricity to split water to make hydrogen for the purposes of fuelling personal transport as petrol becomes very expensive, and then in absolute short supply.

 "An important issue for Canadian nuclear power is the safe disposal of spent fuel. A proposal to bury used fuel fell was rejectedby a federal assessment panel in 1998. The panel did not rule out future possibilities of such "deep disposal," but its decision probably will set back any long-term solutions beyond the year 2030. Currently, used fuel is stored in temporary holding areas. However, Ontario Hydro will need more space to store used fuel, and is proposing to build 1,240 new concrete and steel silos for waste fuel at the Bruce plant to last up to 50 years.

In August 1997, Ontario Hydro was forced to shut down 7 of its 19 operating nuclear reactors due to safety concerns at the plants. To replace this lost capacity, Ontario Hydro will be forced to spend an extra $2.2 billion through 2001 to cover the increased costs of shifting to coal and oil generation. The company also will spend as much as $5.6 billion through 2001 to overhaul a dozen newer reactors that will continue to operate on the shores of Lakes Ontario and Huron."
- United States Energy Information Administration, November 1999

The present rate of oil consumption
Hydro power, coal, natural gas, yes, at first glance they seem reasonable alternatives. Until we discover the scale of current oil consumption. The table below is based on the oil used in 1999. It then takes the scenario that only half of the oil used at that date must be replaced by another energy source. By 2040, effectively all the 68 million barrels of oil a day used (2000 figure, significantly more in 2005) has to be replaced because we will have effectively no longer have oil. It will have been effectively all used up. Forever.

There is slush in these figures - higher oil prices reduce oil consumption, so as oil becomes expensive, the consumption rate drops. In the artificial oil shortage/price rise of 1973, when oil went to $US30 a barrel in 1973 dollars (roughly $US52 in 2005 terms), consumption dropped by about 17%, partly due to artificial supply constraints. There were absolute shortages of supply, with gas stations running out, and long lines of empty cars queing to get to a gas staion forecourt. So consumption will drop. Equally, there are far more motor vehicles now, far more demand, especially from countries that have become more urban, industrialise, and richer. So we may not see such a large demand drop as happened in 1973. Anyway, the table gives a broad indication of the scale of the challenge. More important, it is a reality check. What is theoretically 'possible', and what is actually and practically probable?

For most countries, only coal has anything like a chance of partly replacing oil as it fades. And that doesn't tell the true picture. There are problems with the figures for coal that make it less useful as a partial replacement than the table suggests. And when natural gas is used to power electricity stations, it is 'loses' energy in conversion to another form of power; its full primary energy content is only fully exploited when it is used directly to power vehicle engines.

Its blindingly obvious that Europe and Japan are totally dependant on other countries oil right now; that the USA is effectively totally dependant on other peoples oil; most of Asia and the UK will be substantially dependant within 10 years; and the entire world almost totally dependant on the Middle East, Mexico and Venezuela within 20 years.

In the extremely unlikely event that the Middle East, Mexico and Venezuela share their oil sales equitably around all the countries of the world, rationing the sale on a per head of population basis, how long could the world as a whole continue to burn oil at the 1999 rate? Let's say it one more time -

Will all oil be effectively gone forever within 40 years? Of course not. As supply tightens price skyrockets. As supply skyrockets, demand falls off. As businesses become uneconomic and close, demand falls again. If oil use is halved - to the rate of consumption of the late 60's/early 70's - it will last 80 years. But cheap oil will be gone forever.

When does oil production peak, then start to decline?
Oil production per year is still increasing year on year, albeit at a slow rate- about 0 .75% a year. Some estimate the globally averaged peak of oil production was in 2004, others 2008. All agree the production will fall year on year by somewhere between 2% and 3% after the peak of production. Smaller fields 'run dry', other fields produce less and less as pressures in the fields drop and thus pump pressure and rate of flow drop back.

Can the major oil using countries - and overwhelmingly, America - 'voluntarily' halve (for example) the rate of use? Possibly. But it would be predicated on a series of assumptions. Assumptions about available capital to increase coal production, assumptions about creating gas networks, assumptions about speed of installing coking ovens to produce coal gas, assumptions about the suitability of brown coals for gasifying, assumptions about speed of tooling up to produce small cars and sophisticated steam trains, assumptions about a self sustaining wood supply, assumptions about controlling smokestack acid rain and so on and on. The more assumptions that have to be made, the weaker the arguement. It may not be possible to reduce demand by (say) 50% without a fundamental upheaval in society - decentralization, new industry in coal, steam, gasification, electrification of public transport, end of air based tourism, massive investment in rail, canals, photovoltaic solar panelling, huge energy conservation retro-fitting and design industries, and so on.

What needs to be highlighted is this: oil is the 'only' feasible fuel to power cars. We are really talking about the end of cheap motive transport. Coal provides much of the electricity currently used. Electricity can split water into hydrogen gas for use in cars, but there is no excess electricity available to do this.

Supply is another matter. Clearly, the Middle East countries, Norway, Venezuela, and former USSR have the world 'by the short and curlies'. In fact, the Middle East by itself effectively controls the oil dependent nations. So they can set any price they like. They can supply who they like, in the amount they like. It is their oil. (Apart from the oil seized from Iraq).

"In the past, the Saudis have been able to crank up production to keep oil prices low as a way of building market share. They also have been spending heavily to develop new fields, the "proven reserves" oilmen refer to when describing fields that are at or near the production stage. Some $2.5 billion has gone into the new 500,000-barrel-a-day Shayba oil field in Saudi Arabia. It goes on line in 1999. Yet in the gargantuan mathematics that govern this global balance of supply and demand, what does such a production figure really amount to? In its first year, Shayba's output will provide one-fifth of what is necessary to satisfy the world's additional demand. But as demand rises, that contribution will become proportionately less. We'll need more Shaybas.
Moreover, in the absence of a threat from still-embargoed Iraq, and with national debt estimated to be around $70 billion, Saudi Arabia loses much of its reason to hold down prices. "
Fortune Magazine, October 1995

The question is, how much does the price of oil increase for a given percentage shortage in global production? There are few reliable guides, as politics 'market sentiments', economic cycles and starts and peaks of production cycles in oil fields are so intertwined. Historically, a 2% drop in available global supply has put oil up $3 a barrel. This was a good an assumption as any in 2000 when oil was much lower in price - but no longer.

Oil has increased from around $30 per barrel to around $50 per barrel with no drop in supply - which equates to no drop in demand. Therefore, at this level, for the moment, industries are absorbing structural oil price increases. The increased price is likely to be driven by traders betting on future price increase as the gap between supply and demand closes. Oil prices will increase if demand exceeds ability to supply. Their analysis may be similar to that presented here. Therefore, it is reasonable to guess that while a part of future price rises have been 'built in' by traders taking bets on the price of future supply, prices may initially increase by perhaps 50% (they may drop again as demand slackens and recession set in). We will use this as a baseline to make some informed guesses.

Worst case scenario (assuming political stability and well regulated supply)
In the worst case, all excess (unused) productive capacity will be gone by the end of 2005, as growth in oil use takes up all available slack. Oil consumption demand can be met at about the 2005 level. A drop in available supply of about 100 million tonnes a year triggers a 50% a barrel price increase, and this point might be reached, on current consumption demand, about 2007 or 2008 (several new reasonably large fields coming on stream might have held prices for a while). There will be no unused capacity to increase supply to compensate beyond about 2009. Assuming price had remained at about $50 per barrel until now, oil jumps to $100 a barrel as a stable price point around 2010. If prices increased in $50 increments with each 100 million tonne annual shortfall, it would go to $150 in 2011. Of course, the effect of oil price increases may not be linear. (There may be greater effects, out of proportion to the incremental increase, as prices go higher.) Plummeting consumption is likely to stabilise the price, before or at that price point.

We are discussing the end of cheap oil, which has, in this scenario, arrived about 2010.

It is pointless to try to imagine its ultimate stable price point.

Best case scenario (assuming political stability and well regulated supply)
In the best case scenario, the loss of extra productive capacity won't happen until about 2009. Based on our assumption that oil goes up by $50 for every 100 million tonnes per year shortfall, oil would be $150 in 2010, dropping back to a 'fundamental' base-line as 'luxury' demand all but disappears, and infrastructural and economically viable industry alone supports it. What that price might be is guesswork; it might be in a range between 'better than $60' and 'less than $140'.

Confident scenario
Even in the most politically stable, well moderated supply system, oil will be permanently expensive by 2040. Finally and irreversibly. By 2040 supply will be at about the amount available in 1970 - very approximately half the supply we have been used to.

But whichever way you cut, slice or dice it - even in the best scenario of demand slashed by half - the oil supply will be effectively cut within a hundred years or so. A child born today could conceivably live long enough to see it.

At the optimistic end, that is still only 1 300 000 Megawatts per annum world wide. 40 Megawatts is enough power to serve  20 000 typical western homes. In the most wildly optimistic estimates, wind would provide power to a total of 650 000 000 houses/apartments worldwide.

Wind, unfortunately, is an intermittant source. On calm days there is no power.

Solar
Solar power is effective in heating water to reduce demand from conventional sources. Commercial quantities from 'thermal solar power' comes to a meagre 160 megawatts. It is also dependant on almost constant sunshine.

Small scale home generated photovoltaic power is currently uneconomic due to the high cost of both the photovoltaic panels that collect the suns energy and the deep cycle batteries that store it. Ample power falls on the surface of the earth - the range of average (sunny and dull days averaged over a year) available solar radiation is from a low of 800 kilowatt hours per square metre of surface a year, to 2 500 kilowatt hours per square metre of surface a year.

In a series of nested 'ifs', 'if' the major photovoltaic panel manufacturer would invest heavily in mass production, the cost of such panels could be driven down by 75%.; 'if' enough people chose to cut power costs with these cheaper panels, the strong demand would allow up to 500 megawatts of panel capacity to be produced every year. 500 Megawatts would serve the total electricity needs of 250 000  typical western households. The only caveat is that a photovoltaic system cannot deliver enough wattage to run an electric oven. These households would still need either 'mains' electricity or gas to run the oven.

A  large scale plant capable of producing enough panels (5 million) to capture 500 Megawatts of solar energy every year has been costed at about $US 660 million in capital to set up. If only one plant is set up, then even after 10 years, only 2.5 million households around the world could theoretically be substantially solar assisted.

After ten years of production, 100 plants of this capacity would have supplied 250 million households worldwide. Working on 4 people to the household, in the very heavily coal and oil energy dependant western industrial countries there are 135 million households - 69 million households in the USA, 31 million households in Japan, 20 million households in Germany, 15 million households in France.

In China, using 3 people to a household,  there are 420 million households. 

We have to conclude that massive investment in solar photovoltaics, starting now, is a theoretical solution to reasonable priced home electricity. A minimum of 50 plants are needed to supply photovoltaic panels for the most heavily energy dependant countries. The capital cost would be around $US3,3000,000,000 ($US3.3 billion). The enormous capital cost makes it virtually certain it will remain forever a theoretical solution.

Even if it were agreed in principle to proceed, the investment cannot be made in time to avoid a domestic power crisis.  

There is a danger that the investment needed will be diverted by politicians to centralised photovoltaic production farms, and the electricity used in electricity intensive industries rather than households. Industry needs to obtain power to exist, people need to be employed to afford photovoltaic systems and to renew batteries every ten or twenty years; a delicate balance needs to be struck until there are enough sustainable and clean energy sources to meet both household and industrial needs.

Horse power
Before the auto-mobile, the 'horseless car-riage', we relied heavily on the muscle power of horses to move people and goods. In 1900, the horses in densely populated urban areas like New York City, produced almost 4 million pounds of manure a day. Working horses hauling loads need high energy oats, tieing up large areas of productive agricultural cropping land. Horse power might possibly again be a necessary if tiny part of the blend in the future; but only as a sign of failure to make the transition to other sustainable power sources.

Summary

Cheap oil will be totally depleted within 40 years if it continues to be used at the current rate.

Long before then - and unpredictably when, how many times, and of what duration - wars, cartels, political coercion, and political events will very likely cause 'fear based' panic price spikes unrelated to any physical drawdown of reserves.

Paradoxically, war, sanctions, blockades, price spikes and subsequent recessions may slightly draw out the depletion, with fear and strategic considerations forcing the necessary massive capital re-allocation to within national boundary renewable energy.

It is unlikely that all other sources of energy will be able to replace even 50% of current oil use, because the projects are so big they need to have started already; but because oil is cheap, they can't be 'justified'. When they can be justified, they will be much more expensive due to the now high price of oil. Economic downturn -due to the high price of oil - will make the vast sums of money needed less readily available. Because the ameliorating effect of large projects to increase coal and gas production, build more hydro and nuclear plants, install energy saving devices, solarize, and so forth won't be there, energy will be more expensive than it would otherwise have been. The adjustment will be large anyway. It will be much larger than it might have been if any foresight was shown by politicians (an oxymoron, true), or if educators examined the issues in schools and colleges.

When countries 'have to' explore widescale decentralisation, conservation, solar adjunction and a thousand small projects that together might make a relative lot, it will be so close to 'the bedrock' that reaction time may not be long enough, and rather sudden and traumatic adjustment might result.

How much oil prices rise will determine how long oil lasts. It may last many hundreds of years when it is permanently very expensive, and therefore relatively little used.

When these permanently high prices cut in is guesswork. A guess based on the peak of production depends on estimates of that peak and on oil demand. Demand is much less in recessions; less still in depressions. In the range from 2004 to 2008, a best case says oil won't be permanently expensive until about 2018. A worst case scenario says permanently expensive oil at or about 2010.

Neither case takes into account, on the abnormally high side, temporary price spikes caused by regional political scares, including, but not limited to regional wars and blockades; or on the abnormally low side, short term Saudi overpumping to drive down the price for internal political reasons (at 2005 now looking physically impossible), or demand fall off (especially in Asia and USA) caused by the inevitable recession that accompanies initial adjustment to higher price plateux.

Closing questions
Will we 'overshoot' - reach a crossover point where oil is in absolutely short supply, infrastructure to mine and gasify coal on a massive scale is not in place, and Western industrial economies of the temperate zones recede very sharply, with widespread social dislocation?

Widespread coal gasification needs to be in place by 2040, when remaining available oil is at around half the quantity that is currently used. This would 'hold the line' at late 60's consumption levels as oil drops off further and further. Before thinking, well the resources of the 60's were OK to meet our needs comfortably at that time, consider that we will be back in the 60's economy, but the resources now  have to be spread amongst a population two times the size of that of the 60's.

This would buy us a couple of hundred years - at best - in which to become a committed and irreversably sustainable population.

If we don't reach total sustainability by then, we will have used up all our hydrocarbon 'capital' that is needed to 'leverage' ourselves into that situation. There is no second chance once the cheap oil and coal is spent. We can build a sustainable socioeconomy. Theoretically we can deploy the massive capital resources and sociogeographic restructuring to step across to sustainable living in a timely way.

Any action you take after reading the material here is soley your responsibility - seek advice from others, read critically and widely, don't accept everything you read here. You have been warned! Question everything.