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Peter Cochrane's Uncommon Sense: The Oil Crisis of 2003
The biggest challenge for us this year?
Thirty years on from the most famous oil crisis how have our lives and economies changed? Will 2003 be referred to in 50 years as the Oil Peak? Questions and answers from Peter Cochrane...

It is the 1 January 2003 and I am reflecting on the events of the past year and their historical context, trying to formulate a general prognosis. Just what is going to happen? What are the major issues facing mankind? Is there a single dominant issue that will impact all others? Ruling out some super volcano, massive meteor impact, nuclear or biological war that would wipe us from the surface of the planet, I can see just one key and immediate problem - energy.

The predictions for the discovery of new oil reserves - their size, availability and economic viability - indicate global production will peak during 2003 and then start to decline around 2005. But energy demand will continue to expand and may even accelerate as the Second World industrialises.

Also, the richest nations are unlikely to back off their demand, and may even continue current expansion rates. US oil production peaked in 1970, while EU (insignificant) North Sea production peaked around 2001. But both have the economic muscle to respond to higher prices. All the recent evidence is that they will do just that.

For those who think natural gas and 'green' alternatives are going to save the situation, my advice is: don't hold your breath. Supplies of natural gas are in rapid decline and the green alternatives are insignificant, mostly impractical, or insufficiently developed to make a contribution. How long do we have before we face a major global crisis on an irreversible scale? About 10 years!

As far as I can see there is only one developed technology and industrial country in a good position to face such a crisis. France established the largest nuclear power programme and is the closest to energy self-sufficiency. Nuclear power stands alone as the only technology available with a proven ability to fill the energy gap.

The bad news is that it takes a decade to design, build and commission a nuclear power station. While nuclear power output grew around 30 per cent last year, it still only supplies about 16 per cent of the world total. And while 36 new nuclear plants are under construction globally, the planet actually needs hundreds to meet the demand in energy growth and to displace the huge pollution produced by coal and gas. In the US and the EU new nuclear plant construction is more or less zero - and I am not going to address the political and emotional aspects here as they pose a real, and very irrational, showstopper.

Burning hydrocarbons always seemed to me to be a huge mistake as it may cause climatic change and wastes a resource we need for plastics, pharmaceuticals, building materials, infrastructure components and more. The crunch is coming fast. We have to stop burning oil and coal and we have no choice - we can see the choke point (excuse the pun) coming.

What is going to happen as the oil noose tightens over the next 10 years? Without doubt the most immediate and biggest impact will be in the area of physical transport. Goodbye cheap and abundant flights, hello higher petrol/gas prices. Collectively we are all going to travel less in the coming decades.

Next will be heat, light and power. It could become a less comfortable and bright life seeing us more at the mercy of weather - colder houses and offices in colder climates and hotter in the hotter climes.

Is there going to be any sector that will prosper from the coming energy crisis? Telecoms and IT are the only sectors delivering more for less, year on year, and they are in a position to replace some physical travel.

Beyond what we have already we can expect to see video conferencing that actually works, the remote medical monitoring of patients - including drug and medicine administration - plus the teleportation of people and expertise using VR, augmented VR and telepresence technologies. Unlike the energy sector all of these technologies have been developed, tried and tested, and are on the pre-production shelf ready to go.

Can I see a bright light of opportunity? Yes but not this morning. It is cloudy and raining. On average about 1kW of energy falls on every square meter of the planet every day from the sun - but we don't collect it. Enough energy falls on the roof of my house to make it self sufficient for all my family's power needs, only I have no means of collecting or storing it.

Mother Nature has given us an existence theorem - photosynthesis, an efficient photonic-to-biological energy converter. So far we have created the chemical and physical models, new materials and computing power to take on this major and most vital problem. But we have not invested heavily in this direction.

I can see a host of less significant problems looming in the coming decade/s but the technologies are waiting to be discovered and solutions to be created. We have all the basic tools. All we need is the political and financial will.

Since 9/11 the investment in fundamentally new technology has been near zero. When the money tap is turned back on we need to address our future energy needs to both maintain our progress and avert other crisis situations. 2003 and beyond looks like being a fun ride.

This column was typed on my G4 laptop in my home office on a very rainy first day of 2003 and dispatched to over a high-speed link. Despite all the problems of the world, it is good to be home with the family and good to see so many new prospects for the future.