Peak Oil and Olduvai Gorge Theory

So petrol prices have gone up by 40% to RM 2.70 per litre. Electric rates will be going up by 18%. Rice – the staple meal of Asia too is skyrocketing.

The average man on the street simply has no idea as to why are prices of everything going up. They blame the government for all their woes. While I would never regard that the incompetent and corrupt Barisan Nasional government has managed the Malaysian economy as well as neighboring Thailand or Singapore, but seriously to blame all that is happening at the moment on the government is really taking things a bit too far. Such blame games would only characterized an uninformed and ignorant individual.


Riot police clash with protestors of high fuel prices outside EU office in Brussels.


British truck drivers jamming up major roads in the UK to protest against high fuel prices.


Spanish fishing vessels lay idle as fishermen protest against high fuel prices.


Mexicans protesting against high food prices.

The average man on the street is too concerned on the impact of rising cost of living to want to understand the underlying issue. Blaming our elected governments is an easy way out. After all, Malaysian men are famed for their idle coffee shop bitching and doing little else.

Back in the United States in 1956, a certain geoscientist by the name of Marion King Hubbert was working for Royal Dutch Shell introduced the Hubbert Peak Theory. Of course, in an age of cheap oil where teenagers emptying their loose change in their pockets could poll together enough money to fill up a tank of worth of petrol, nobody took him seriously and the mainstream geo-scientific community labelled him as some sort of a renegade researcher. Almost 4 decades later, in the oil wars of Iraq and the Middle East, crude oil prices were hitting new record highs almost every quarter, and thanks to the power of the Internet, more people began to sit up and listen about Peak Oil.

In short, the popular peak oil reference website www.lifeaftertheoilcrash.net gives an analogy of peak oil as;

In practical and considerably oversimplified terms, this means that if 2005 was the year of global Peak Oil, worldwide oil production in the year 2030 will be the same as it was in 1980. However, the world’s population in 2030 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil dependant economies will crumble, and resource wars will explode.

The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.

In a similar sense, an oil based economy such as ours doesn't need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.

I have uploaded a short flash presentation on what Peak Oil Theory is about here. Go download it.







More information on the world food crisis.

Proponents of the peak oil theory have long warned of the ramifications of peak oil will extend far beyond higher fuel prices. Oil wars will break out (Iraq?), food prices will shoot up, social instability etc etc.

Then there is another thing that I have been reading – the Olduvai Theory.

The Olduvai Gorge Theory states that the life expectancy of industrial civilization is approximately 100 years: circa 1930-2030. It is defined by the ratio of world energy production and population (e). Four postulates follow:
1. The exponential growth of world energy production ended in 1970.
2. Average e will show no growth from 1979 to circa 2008.
3. The rate of change of e will go steeply negative circa 2008.
4. World population will decline proximate with e.

In short, the rapid economic growth that we see in the past 100 years or so were largely driven by two factors – cheap energy (the discovery of oil) and cheap food. The discovery of oil had an indirect impact of agriculture and food production. Sophisticated farming machinery, most of them fossil fuelled, and petroleum derived fertilizers and pesticides were invented. Increased mobilization from the proliferation of motor vehicles made distribution of just-in-time fresh foods were made possible. In fact, this is the bedrock of our supermarket and food retail chain.

Majority of the world’s electricity needs are generated either directly or indirectly from petroleum. All over the world, fossil fuel provide are the primary sources of energy for electricity generation. Hydropower only provides less than 10% of our electric energy needs.

Our world’s financial system is heavily dependent on the availability of cheap energy. Energy is a key driver of any economic growth. Banks finance large scale commercial projects with the basic understanding that by lending out more money than they actually have on deposit, with the trust that businesses will continue to prosper thereby allowing them to recoup their principal sum loaned up with interest charged as their profit. Without cheap energy economic growth grinds to a halt. A financial meltdown ensues.

Cheap oil, cheap electricity, cheap food and readily available financial funds laid a perfect ground for the most rapid growth of human civilization ever seen in the history of mankind. When cheap oil goes, our modern civilization goes as well.


Listen to this short lecture on Peak Oil and Olduvai Theory.

At this point, I am reminded of a scene in the first instalment of the movie Matrix, where the sentinels refer to 1999 as the peak of human civilization. In the light of all this, maybe this is a time for you to do a bit of soul searching. Are all the things that you are working so hard to pursue really all that worth it?

Having said that, I still want to put hope in the ability of mankind and the resilience of our spirit to satisfy our most primal urge – the preservation of our lives and ensuring our survival. What we need now is a Manhattan Project that works on a global scale, only this time instead of fighting to destroy the Axis powers, this time we are fighting for the very survival of mankind.


In times like this, the Smart fortwo is now my favourite car at this point of time.

Related post : My rebuttals to Datuk Idris Jala.