The End of Oil: On the Edge of a Perilous New World by Paul Roberts. Houghton Mifflin, $26, 389 pages.

The News & Observer

August 1, 2004

Not if, but when, the well runs dry

By PHILLIP MANNING


Some respected geologists predict that world oil production will begin to decline in 2005. The United States government takes a rosier view, saying that the decline won’t begin for another 30 years. But even the sunniest optimists agree with the well-is-almost-empty pessimists on one thing: Oil is a finite resource, and production will indeed peak one of these days. When that happens, according to journalist Paul Roberts in his sprawling, fact-packed book “The End of Oil,” oil prices will skyrocket, economies will crumble, and chaos will ensue — unless we begin to prepare for that traumatic event today.

There’s nothing new about this scenario; other books have offered similar gloomy warnings. The American public, however, isn’t buying it. Gas guzzlers still sell well, and the idea of a hefty gasoline tax to stem demand is opposed by almost everybody. Why aren’t we driving small, fuel-efficient cars and turning the thermostat down, as President Jimmy Carter once famously suggested? The answer probably lies in our abiding faith in science and the free market: that when crunch time comes and oil become prohibitively expensive, companies will make alternative forms of energy available. But that mindset underplays the disruptions that will occur during the transition period as we wean ourselves off fossil fuels. Roberts argues that a few small steps now will make the future far less painful. And that is where government can help. In fact, it helped us through a similar crisis 30 years ago.

When the Arab oil embargo began in 1973, the government mandated the auto industry to produce more fuel-efficient cars. The result, according to Roberts: “By 1985, new American cars were averaging twenty-five miles per gallon — up from fifteen a decade before.” But the mandates didn’t stop there. Air conditioners had to be reengineered to use less power. “New building codes required double-paned windows, better insulation, and more efficient heating systems. New refrigerators used only one-quarter of the power that a pre-1970s model had.” Despite a booming American economy, demand for oil dropped, and prices fell to less than $10 a barrel. Government action, coupled with market forces driven by higher oil prices, had worked and required only minor sacrifices by consumers. Improved technology had produced more efficient washing machines, cars, and houses.

However, the conservation successes that began in the 1970s lasted only a decade in the United States. Cheap oil made conservation less attractive economically, and the election of Ronald Reagan in 1980 brought a Marlboro Man approach to energy. According to one official quoted by Roberts, “in Reagan's view, America did not conserve its way to greatness .... It needed more and more energy every year, and the mission of government was to provide that energy.”

Reagan froze the automobile fuel-efficiency standards that had worked so well. Soon afterwards, the auto industry was producing — and consumers were buying — cars, trucks, and SUVs that grew larger and delivered lower gas mileage every year. The current administration, which has many senior officials with backgrounds in the energy business, displays a similar distaste for conservation and a similar desire to provide oil for America. Roberts dismisses the administration’s denials that the invasion of Iraq was about oil as “patently absurd.”

By downplaying conservation and curtailing research into renewable energy, Roberts writes, our government has made us the world’s leading producer of carbon dioxide, the greenhouse gas that most scientists believe is raising the temperature of the planet. It has also made us more dependent on oil from foreign countries. So, what should we do as the wells dry up? Roberts offers no long-term solutions. He believes the market will determine what combination of advanced technologies — such as hydrogen fuel cells, renewable energy sources, and nuclear power — will eventually replace our hydrocarbon-based energy system. He does, however, offer a “bridging strategy,” the adoption of which, he believes, will give the invisible hand time to sort out the options.

First, Roberts wants Americans to reduce their dependence on foreign oil by increasing imports of natural gas, which is more plentiful than oil and burns cleaner than either coal or oil. Next, he suggests that congress impose a carbon tax to encourage industry to reduce carbon emissions. Finally, he wants to dramatically cut gasoline consumption by penalizing buyers of gas guzzlers while offering rebates to consumers who opt for high miles-per-gallon cars.

These proposals are sensible, but Roberts believes there is little chance they will be adopted by a conservative, business-as-usual administration and congress. His pessimism seems well founded. Still, history and logic suggest the possibility for enlightened government action. The key is to remind Americans that we’ve done it before and that the small, almost painless changes made in the 1970s paid handsome dividends.

With gas prices hovering around $2 a gallon, a new interest in conservation is percolating. Hybrid cars which combine gasoline engines with batteries, and deliver 40 or more miles per gallon, are replacing Hummers (11 miles per gallon) as status symbols. Sales of the Toyota hybrid, for example, are up almost 80 percent over last year. Still, sales of all hybrids in the United States is less than 1 percent of the new cars sold. Americans today aren’t responding as eagerly they did in the 1970s.

But they will if oil prices continue to rise. Even at today’s prices, the inflation-adjusted price for gas is lower now than it was in the ‘70s. Consumers know this because they have not yet felt pain in the pocketbook. When the market demands that they change to more efficient cars and better insulated homes, they will. What Roberts reminds us is that we needn’t wait for that inevitable day of reckoning. Instead of simply relying on the market, we can demand that our government take proactive steps today. Our current president will likely never address the nation in a cardigan as President Carter did after he turned the thermostat down, but if oil prices go high enough, his successor might.
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