David Strahan is a British journalist and documentary film-maker who has produced and reported for the BBC. The Last Oil Shock examines the issue of oil depletion and its possible effects on the global economy from a variety of different angles. The result is a mostly successful book that well integrates its many themes into a coherent whole.
Major Subjects The Last Oil Shock Discusses
The War in Iraq. Strathan shows that vice president Dick Cheney knew a considerable amount about the dull prospects for future global oil production. Control of Middle Eastern oil was an underlying reason for the invasion of Iraq. On the weekend that George Bush and Tony Blair forged a pact to invade Iraq, they also set up a diplomatic liason called the US-UK Energy Dialogue.
Furthermore, Saddam Hussein could not be left in power due to oil deals that had been set up with Russia, China and France. If the UN had lifted sanctions it was the US and UK who would be excluded from any lucrative deals.
Peak Oil Theory. The theory of peak oil is explained in simple and easy to follow language. The famous American geophysicist, M. King Hubbert, who predicted American oil production would reach its peak in the early 1970s, based his theory of peak oil by examining the history of individual oil fields, and extrapolating their performance onto a broader model. In short, all oil fields follow a similar productive arc.
The Tightening of Global Supply. While it is estimated that there are 1 trillion barrels of oil left in the ground, this oil is getting more difficult and costly to get out of the ground. The additional discoveries that are being made are small compared to some of the big discoveries of the past. Added to this is growing demand from China and India.
Spare capacity also looks to be in retreat. When hurricane Katrina hit in 2005, it destroyed billions of dollars worth of oil infrastructure in the Gulf of Mexico. The International Energy Agency (IEA) had to step in to satisfy this gap in production. When Saudi Arabia was approached, they could not provide the spare light, sweet crude that was needed. They could only provide only ‘sour’and ‘heavy’oil, both of which are costly and difficult to refine.
The Hydrogen Car. Many see the development of hydrogen energy as the great hope for replacing the world’s transport needs, yet Strahan argues persuasively that this is not likely. It costs one million dollars to buy a new hydrogen car today. These costs could be reduced to $100,000 per car within a decade of commercial production.
Other complications are the fact that hydrogen cars are very inefficient. Hydrogen is not clean either, as it is made from either coal, oil or natural gas. The sheer volume of hydrogen that would have to be produced makes it prohibitive.
Oil and Economic Growth. Many economists have preferred not to look too closely at how modern economic growth is tied to oil. Typically neoclassical economists have not taken energy into account when assessing the productivity of economies. The Last Oil Shock argues that the impact of energy on economic growth has been underated. As the supply of oil tightens, and demand increases, economic growth will inevitably go into reverse.
Oil Companies and Their Dwindling Reserves. In 2004 Shell had to admit to the stock exchange that it had overstated its reserves by nearly 4 billions barrels, or per cent. Furthermore, many oil companies are delaying their oil reserves peaking by simply taking over other companies. As production analyst Art Smith says, “Companies with near term peaks are often driven into the aquisition market because theyr’re trying to patch a near term problem, it tends to drive their strategy.”
A Minor Criticism of The Last Oil Shock
David Strathan slightly mars an otherwise excellent and well researched book by devoting a chapter to lambasting former UK energy minister Malcolm Wicks. When Strathan asked him about global oil peak production at an event in 2005, he was given a fatuous and condescending answer. This in front of a group of other journalists. The intention was obviously to ridicule. By spending a chapter giving a backhander to Wicks, the author reduces his argument to something personal. The reader wants facts, not personal animosity.
This is a minor point though. Overall, The Last Oil Shock provides a wide array of information presented in a thoughtful and considered manner. David Strahan has the knack of asking the unthought of question, and then seeking answers. His book provides a valuable contribution to the subject of peak oil.
The Last Oil Shock: A Survivial Guide to the Imminent Extinction of Petroleum Man, by David Strahan. Published by John Murray, 2007. ISBN: 978-0-7195-6423-9
Chris Saliba - Chris Saliba is a freelance writer. Read more of his workplace articles at chrissalibafreelancewriter.blogspot.com
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