As with the global financial crisis, governments, particularly national governments, are sleepwalking their way towards a Peak Oil crisis.  Publicly, perhaps only Sweden has a Peak Oil strategy.  Undoubtedly, many more national governments and their security councils have privately prepared Peak Oil reports for the highest levels of political leadership.  The failure to engage the public in Peak Oil discourse is a mistake that will only result in a more polarizing debate if left until the crisis is upon us.  And a Peak Oil crisis could have far greater repercussions than the global financial crisis.

The lack of public engagement and action on Peak Oil at the national government level is astounding.  It was in December 2005 that Swedish  Prime Minister Goran Persson in a speech announced that the the threat of Peak Oil required action to mitigate its effects.  Persson formed a committee tasked with preparing a strategy for making Sweden fossil fuel independent by 2010.  I've searched but can find no other national government that has taken official action on this scale.  A few have commissioned studies and legislators in a some countries have formed study groups or similar bodies.  Of note:

- The Irish government in 2008 commissioned what it calls a "baseline review" to assess the country's vulnerability

- The Welsh National Assembly published a report in 2008

- there is a Peak Oil caucus in the U.S. House of Representatives

While national political leaders have been silent, local and regional governments around the world have engaged in the Peak Oil debate and have even responded with action.  Post Carbon Cities and  Bristol Green Capital list several sub-national governments that are taking action, including municipal and regional governments in the U.K., Europe, Australia and the U.S.  In Vancouver, where I'm based, the last mayoral election included a debate dedicated to Peak Oil in which all three candidates participated.  These activities on the local level are driven by concerned grass roots activists who have formed awareness and action groups in their communities.  You can do a google search to find a local group in most any reasonable sized city.  It's well past time that national governments acknowledged these grass roots efforts and engaged in a national and international debate on Peak Oil.

Peak Oil is no longer a tin foil hat theory.  While national governments have mostly declined to publicly and officially address the issue, Peak Oil advocates have pushed the debate far enough into the mainstream that public officials and those advising them have been forced to address the Peak Oil issue in at least a limited way:

- Matthew Simmons, of Simmons and Co., a leading Houston based investment bank that serves the energy industry, has vociferously spoken out on the threat of Peak Oil for more than a decade.  Notably, Matthew Simmons advised President George Bush and Vice President Dick Cheney on that administration's energy task force (See Washington Monthly archives).

-  In November 2009 two International Energy Agency (IEA) whistleblowers told The Guardian newspaper in the U.K. (hat tip to peakoil.blogspot.com) that the world has "entered the 'peak  oil' zone".  The IEA is an international organization that represents the national governments of the major western oil consumers.  A second whistleblower stated that the IEA oil production forecasts are inflated due to pressure from the United States and fear that publicly announcing the severity of oil production challenges would result in market panic.  Nevertheless, the IEA's 2008 World Energy Outlook acknowledged that a field by field analysis of oil production revealed significant and increasing production declines at existing wells.  For the first time for a World Energy outlook report, the IEA acknowledged Peak Oil may be a possibility, although it put the date at 2030.

- In March 2007, the U.S. Government Accountability Office (GAO), the non-partisan investigative arm of the U.S. government (a watchdog organization), issued a report urging the development of a strategy to deal with Peak Oil, although it dated Peak Oil up to 2040 by most estimates it examined.

- In March 2010 Glen Sweetnam, an official at the U.S. Department of Energy (DOE) indicated the world may experience a production decline between 2010 and 2015, according to Le Monde, a Paris based newspaper.  The U.S. DOE for years has denied the existence of Peak Oil and even now instead of acknowledging the issue and beginning a discussion, it maintained the Peak Oil denial position despite its statement that production may hit a ceiling sometime between now and 2015.  The Obama DOE states that it believes we may reach an undulating production plateau.  Translation:  the DOE believes production will fall by 2015 from current levels and thereafter will fluctuate within a range.  It's not made clear where new supplies will be found to replace the expected increasing decline rates at existing production wells the world over.  While even the Obama administration may not be willing to engage in a public Peak Oil debate, it may be reasonable to conclude that it believes the issue deserves attention in light of the recently announced increases in vehicle fuel economy standards.  While the media viewed the new mileage standards only through a global warming prism (and that is how the Administration presented the new rules), it should be noted that the new standards require a significant 33% improvement in fuel economy by 2016, which will represent the most significant such move in the U.S. in decades.  It's strange that this announcement did not garner significantly more attention (part of the reason is that the domestic automakers were resigned to its inevitability).

The absurdity of national governments' lack of action on Peak Oil becomes yet more obvious when once considers that certain big business players are engaging the issue.  In February 2010 the U.K. Industry Task-Force on Peak Oil and Energy Security released its second report, "The Oil Crunch: A Wake-up Call for the U.K. Economy".  Six companies joined together to present the report at the Royal Society:  Arup, Foster and Partners, Southern Energy, Solarcentury, Stagecoach Group and Virgin.  The report urges the country not to be caught unprepared for Peak Oil as it was for the financial crisis.  Quoting Sir Richard Branson, the Guardian newspaper printed "founder of the Virgin Group, whose rail, airline and travel companies are sensitive to energy prices, warned then that the coming crisis could surpass the credit crunch. "The next five years will see us face another crunch: the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," he said.

Lord Hunt, the U.K. energy Minister, was forced to address the issue, as the task force report garnered significant attention in the British media.  The guardian states:

"The government had previously played down the risks arising from peak oil after the Wicks review in the summer in effect dismissed the idea that global demand for oil could soon outstrip supply.

A spokeswoman for the Department of Energy and Climate Change confirmed last night that Hunt and a range of energy-policy civil servants would be holding "private and behind-doors" talks at the Energy Institute. But she played down the significance of the session, saying the government had always taken supply issues seriously and met different parts of industry on a regular basis. "We do this all the time; it is just a normal stakeholder meeting," she insisted, adding that there was no "marked" change in ministerial policy.

The issue of peak oil arose last November when whistleblowers inside the International Energy Agency alleged the problem had been deliberately downplayed over a long period. BP and other oil companies insist that there is little danger of the world running out of oil because new areas such as Brazil, and more recently Uganda, are always opening up to development. BP chief executive, Tony Hayward, believes demand will fall as prices move up., pushing back any major peak-oil dislocation".

Read the full story from the Guardian here.

The U.K. Industry Task for on Peak Oil and Energy Security is not alone among businesses that seek to address the Peak Oil issue.  Even senior executives within the oil industry acknowledge the potential for an oil crisis, although they couch their concerns in language that implies the production challenge is due to the western oil companies' lack of access to the remaining vast oil reserves, which are mostly controlled by national oil companies in the Middle East and Russia.

- At an October 2009 Money and Oil conference John Hess, chairman of Amarada Hess, delivered a warning that the world faces a devastating oil crisis, according to upstreamonline.com.

- The CEO of Petrobras, the Brazilian oil company, warned in a February 2010 that world oil capacity will peak in 2010.

- Sadad Al-Huseini, a former Aramco executive (the Saudi national oil company), stated in 2007 that oil production would begin to fall within 15 years.

- Christophe de Margerie, the CEO of Total, the French oil company, has state that he does not believe oil production can ever exceed 89 million barrels per day (December production was 86 M barrels per day), according to Business Day.

It remains to be seen whether national governments will honestly and openly address the Peak Oil challenge before the crisis hits.  While many experts have brought their experience to bear in assessing the Peak Oil risk, the international oil production and reserve data is notoriously incomplete.  Part of the problem is that much of the information required for assessing Peak Oil is in the hands of Middle East national oil companies who have been unwilling to share their confidential data.  Only national governments, working in an international effort, can make a true Peak Oil assessment.  If such efforts do not begin soon, we may face shocks from an oil crisis that will have far greater repercussions than the global financial crisis.

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