Peak Oil: Security Policy Implications of Scarce Resources

September 16, 2011 | 00:00

Peak Oil: Security Policy Implications of Scarce Resources

Study from the German Army looks into the security consequences of peak oil. It was published last year and has now become available in an English translation. It was made available through the internet by energybulletin.net.

Introduction

In this first part of the study entitled "Armed Forces, Capabilities and Technologies in the 21st Century – Environmental Dimensions of Security", the Bundeswehr Future Analysis Branch addresses the subject of finite resources and their potential security policy implications, exemplary using the scenario in which the global maximum rate of oil production has been exceeded. The second part of the study deals with climate change and demography.

The term "peak oil" stands for the maximum rate of oil production and refers to the point in time at which the rate of a single oil field, of an oil-producing region, or globally reaches its absolute peak. In geological terms, about half of the originally existing resource quantity of oil will be available in underground oil reservoirs at this time. Various measures such as investing in production technologies to develop further resources, economising in oil consumption, or softening existing environment protection regulations, could indeed maintain the production level for a certain period. From peak oil, however, this level will irreversibly decline in the long term. Generally speaking, oil will therefore continue to be available and recoverable beyond the 30-year timeframe chosen in this study, albeit in quantities that are possibly too small to fully satisfy global demands and at considerably higher prices.

In the past already, numerous conflicts were linked to various kinds of raw material deposits. Literature relating to this subject is extensive, and the topic finds broad interest within the security policy community. In most cases, however, such resource conflicts have been restricted to specific regions and have only been of limited relevance to international security policy. In the light of global peak oil, this could change in future with regard to oil as a natural resource: Firstly, a global lack of oil could represent a systemic risk because its versatility as a source of energy and as a chemical raw material would mean that virtually every social subsystem would be affected by a shortage. Secondly, the primarily geographical concentration of the oil deposits and transport infrastructures in the "Strategic Ellipse" (see Figure 1) could lend greater relevance to security policy and generate increased global interest, which amongst other things could result in a shift in geopolitical power.

The precise global peak oil date is controversial and can only be determined with certainty in retrospect. Available data on global oil reserves vary considerably and hardly provide any scope for outsiders to make an independent assessment. The quality of statements about oil production and relevant conclusions for the occurrence of a global peak oil situation depends on several factors: The reserve levels officially specified by the Organization of the Petroleum Exporting Countries (OPEC), for example, can be disputed on the grounds of nontransparent data acquisition and partly politically motivated information. The higher an OPEC member declares its national reserve levels, the higher the production rate allotted by the OPEC and, in turn, the export profits. A further important factor when it comes to estimating reserves is the applied calculating method. In the past, predictions regarding the production development of oil fields based on originally reported reserves were often too low and had to be adjusted upward. Other aspects such as improved production technologies may also positively effect the "reserve growth" factor.

It is a fact, however, that oil is finite and that there is a peak oil. Since this study is mainly focussed on understanding cause-effect relations following such a peak oil situation, it is not necessary to specify a precise point in time. Some institutions claim that peak oil will occur as early as around 2010.10 Depending on the development of globally relevant factors, we cannot rule out that peak oil could have serious security policy implications within the review period of the 30-year investigation perspective chosen for the SFT series. The dimension of the potential effects in conjunction with the above-mentioned ambiguity regarding the existing data on the future availability of oil therefore underpins the necessity to look in more detail at the potential security policy implications for Germany.

Apart from the above-mentioned uncertainty factors regarding exact peak oil occurrence, it is foreseeable that when global peak oil is actually reached – and if transformation towards
post-fossil societies has not been extensive enough or has occurred too late – it will no longer be possible from a certain point to cover the global demand for oil. Against this background and regarding the long periods of time needed for adjustments in the energy sector aiming at a far-reaching energy transition, it is today’s necessity (1) to thoroughly analyse our extent of oil dependence, (2) to identify - based on this information and in time- potential risks , and (3) to discuss alternatives for using oil.

This study is intended to sensitise to the potential security policy consequences, risks and cascade effects that may arise from peak oil excess. The cause-effect relations described are expressly not to be understood as being inevitable. Rather, they are intended to capture the potential interdependences
from different perspectives between the availability of oil and dependence on oil and to thus help to better understand the systemic importance of oil and potential security policy implications that can be derived for Germany.

Chapter 2 at first discusses the importance of oil, oil as a potential conflict factor, and the oil supply situation in Germany. Chapter 3 addresses two potential future scenarios resulting from global peak oil without implying, as already mentioned above, that the situation is inevitable or predicting the date on which the developments might occur. Chapter 3.1 looks at moderate developments that could occur as a result of peak oil. For this purpose, cause-effect relations that could arise as a result of peak oil and that are thought to be highly relevant to security policy have been identified and discussed. Chapter 3.2. addresses a possible special case of peak oil consequences in which a so called economic “tipping point” is exceeded, a situation which could lead to non-linear and partly chaotic developments. Even if in this case it is hardly possible to conduct an in-depth security policy analysis, the purpose is to raise awareness about a worst-case scenario. Chapter 3.3. deals with the oil resource-related conflict constellations that could change and expand as a result of peak oil.

The developments described start from the basic assumption that it was not possible to complete an ambitiously timed and comprehensive global energy transition towards a postfossil economy and society within the investigation period. Accordingly, the study identifies the timely implementation of such a transformation and the development and expansion of systemic basic virtues such as independence, flexibility and redundancy as the central action priorities and proposals for a solution.

The results of the study can only be appropriately interpreted if its methodological approach and basic assumption are clearly understood and if due consideration is given to the fact that the study in part describes a worst-case scenario and, explicitly, not an inevitable development.

Chapter 4 deals with the consequences of the developments described in Chapter 3 for Germany. Chapter 5 summarises the most important findings. The main objective of the study is to raise awareness about the systemic importance of oil and, in turn, the derivable significance to security policy if peak oil is exceeded. The findings and results are expressly not meant to imply that resources will necessarily have to be secured with military assets. Rather, the study is to be understood as an appeal to think things through at an early stage and to develop both preventive and responsive courses of action. It does not aim at anticipating political decisions.

For the full report, including footnotes and graphics, see here.

Story on Energbulletin.net can be found here.

 

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