What happens after the oil peak?

Over at Daily Kos, guest blogger Meteor Blades has a great post about the consequences of not having an energy policy. MB talks about the Hubbert Peak, when oil production peaks, and starts to decline. The peak represents the turning point for our modern industrial civilization: after the peak, oil will get only more expensive. Many geologists believe we have hit or are about to hit peak production. A fascinating lecture by petroleum geologist C.J. Campbell on the oil peak was linked to in the comments. You can also watch it in Real Player format (The video of the lecture could provide the text for a whole nother topic: how to nearly ruin a presentation by using Power Point).

Now, I'm a card-carrying member of the Belief in Scientific Progress Society, also known as the Technology Will Save Us Movement. This school of thought (very popular with libertarians and conservatives) believes that when oil is no longer economical to produce, less viable sources will be tapped or alternative energy sources will be developed. For liberals, the idea is typically that wind or solar power will be used for electricity generation and some sort of hydrocarbon will be used for energy storage. (I once lost a junior varsity debate in high school because I let my ideology get the better of my sophistry after my opponent claimed my case would lead to ecologic catastrophe. "Of course not," I claimed. "Economics dictates that we would find new energy sources after we ran out of oil. And besides, there's always the other planets to go to for resources." He turned it around on me, painting a story of a solar system of wrecked planets discarded like so much refuse. I was so angry. Moral of the story: during debates, leave your personal beliefs behind.)

Neither liberals nor conservatives typically envision the need for any sort of energy cut backs after switching to a post-oil economy. But common sense indicates that this is wrong.

Let's say a barrel of "conventional" oil, to use C.J. Campbell's term for oil that is economically viable to extract today, costs $30 a barrel, and obtaining the equivalent amount of energy from wind/hydrogen, turkey offal, oil shale, or whatever costs $50 (actual cost of US light crude oil on Oct. 10: $31.97/barrel).

The economics of this are pretty simple. When the cost of oil exceeds $50 a barrel, it becomes cheaper to get energy from the alternative sources. But the price does not go down. When you've got an economy built around the availability of $30/barrel oil, paying 67% more for energy is not going to be sustainable. Something will have to give. I had not considered this problem before.

Someone who has is James Howard Kunstler, suburban sprawl curmudgeon. In an interview with Global Public Media on the oil peak, Kunstler lays out what he thinks will happen in post-oil peak America. When I listened to this a few months ago, I thought he was being overly alarmist. Technology will save us. Now, I'm not so sure.

Many Americans require a car to live their daily lives. We live in a one car per adult society. How many people are going to be able to afford to drive when the price of gasoline goes up 67%? As Campbell points out in his lecture, hitting the oil peak is not the end of the world. Prices may stay at the same level for quite some time, then only being rising slowly. Unfortunately, America may end up like the frog that got slowly stewed and didn't notice until it was too late.

We need real leadership to get ahead of this problem now. We need to research energy conservation and alternative energy sources. We need to raise CAFE standards and promote hybrid vehicles. But there will be no escaping the fact that alternative energy is going to cost more than pre-peak oil. Our cheap energy lifestyle is going to have to change. We're going to need more urban density, more local food production (to offset transportation costs), less petro-chemical based fertilizers, more public transportation, more biking, and more walking.

All the things I've written are no surprise, and are quite popular with environmentalists. But they touch one of the many third rails of American politics, the cheap energy lifestyle. Even equalizing CAFE standards for cars and SUVs is tantamount to socialism here. But the oil peak is coming, soon. The only questions are: when; and will we be ready? Howard Dean frames energy independence as a defense and national security issue, and I think that's the right way to get started.

I am beginning to think that this is the most important issue of our time.