A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.Uofficial translation of actual report: Consumer Energy Report: Leaked Study on Peak Oil Warns of Severe Global Energy Crisis:
1. Introduction[Bold added by me.]
In the past, resources have always triggered conflicts, mostly of regional nature. For the future, the authors expect this to become a global problem, as scarcity (mainly of crude oil) will affect everybody.
2. The Importance of Oil
regional conflicts can always at least partially be attributed to resources, such as in the Caucasus region, the Middle East or in Nigeria, or they fuel conflicts due to the wealth they create (such as in Africa).
The report sees – within a timeframe until the year 2040 – a changed international security layout based on new risks (including transport risks for fuels) and new roles of actors in a possible conflict around the distribution of increasingly scarce resources.
focusing on the key suppliers of oil: Russia, Norway and the U.K. It is noted that both European partners are already past their peak and that Germany is increasingly dependent on Russia, which currently is reliable but not necessarily so in the long term.
3. Possible Scenarios After Global Peak Oil
The Middle East is identified as a very dangerous region with high external involvement from many players and thus a very unstable overall situation.
Overall, the report expects a reduction of the importance of “Western values” related to democracy, and human rights in the context of politically motivated alliances, which increasingly are driven by emerging economies such as China – likely leading to double standards. Emerging economies are equally expected to receive higher recognition in international organizations, particularly those with strength in resources (such as Russia).
New conflicts are potentially arising from oil exploration in international or disputed ocean waters, where multiple issues arise, particularly around the arctic circle, with further geopolitical risks for conflict.
Also, the shift to natural gas is reviewed as an extension of the “oil age”, because it might be able to replace crude oil as a bridging source until new solutions are found. The risks for problems from transporting gas (pipelines) and the related issues (as seen between Russia and its neighbors during the past years) are highlighted.
Equally, nuclear power as a potential source is highlighted – emphasizing the risk for safety and the proliferation of nuclear technology. This would also require an increasing shift towards electricity.
Damaging infrastructure through hostile acts (sabotage, war) might become an attractive target for groups or countries with a tendency to use violence. The same is expected for electricity and natural gas-related infrastructure – they all might require higher protection.
Generally, the focus of risks is expected in the region which the authors consider the “strategic ellipse” (a term used for the region East of Europe reaching from Saudi Arabia in the South to Russia and former Soviet Union countries in the North), because a majority of oil reserves are located in this area.
High oil prices would further affect almost all aspects of society, as it will also influence the cost of chemicals and all products derived from them, which might substantially alter the nature of value chains and make certain things uneconomical – ultimately leading to higher unemployment during a transformational phase away from an oil based economy.
the changes and likely reduction in standard of living might render societies less stable and make them more attracted to extremist political positions and even trigger changes in government systems, as trust into key actors in politics will diminish. This might be a particular risk for the relatively young democratic countries in Eastern Europe.
more expensive transportation and increasing problems “at home” might reduce the ability of larger countries to intervene internationally (politically and/or with military action), and also lower the readiness to provide help to poorer countries. The focus will be more on a country’s egotistic (energy) interest and not so much on an ideal of transferring Western values. The gap will likely not be filled by NGOs, as they will be affected by similar limits.
Overall, international institutions will be weakened, as they will have less resources to provide help and support, and it becomes equally possible that help will be attached to direct (energy) needs of the donors.
4. Challenges for Germany
Armed forces would also be significantly affected by fossil fuel limits, as they are very dependent on oil products. Significant investments in alternative energy procurement technologies (biofuels, coal-to-liquids – Fischer-Tropsch) and applications (electric and hybrid vehicles) would be required, with long transition times. Further, local energy-independence of stationary troop infrastructure (like military bases) using more renewable sources would be beneficial. Long term objective would be to fully convert Germany’s armed forces to only use renewable energy sources by 2100.
British politicians are considering similar warnings according to The Guardian / Peak oil alarm revealed by secret official talks:
"[Government] public lines on peak oil are 'not quite right'. They need to take account of climate change and put more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market."
Last year the Guardian revealed that the IEA [International Energy Agency] was also riven with dissent over the issue with senior staff members privately telling newspaper they thought the official numbers on future global oil supply were over-optimistic.
an internal IEA source said: "Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible, but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources."
Kjell Aleklett, a professor of physics at Uppsala University in Sweden and author of a report The Peak of the Oil Age, claims crude production is more likely to be 75m barrels a day by 2030 than the "unrealistic" 105m projected by the IEA.
Also discussed at New York Times Environment Blog / German Military Braces for Scarcity After ‘Peak Oil’, Peak Oil and the Bundeswehr, Energy Matters / Peak Oil In 2010 - Leaked German Military Think Tank Report, Digital Journal / Secret German analysis warns of peak oil and coming energy crisis, PhysOrg.com / Are some governments taking 'peak oil' seriously?.