I’m a peak oil agnostic, more or less – obviously something of the kind has to happen eventually, but I’ll let people who know more about geology than I do argue about whether it’s in the far future, the near future or (as some maintain) has already happened.
Still, I was struck by an essay on The Oil Drum making the case that if peak oil does eventually arrive, we may not have the luxury of sliding gently down the declining side of Hubbert’s Peak, planning sensibly along the way, but may instead end up very suddenly in the post-oil economy – much faster than the amount of oil remaining in the ground would imply. His whole argument is worth looking at, but it can be summarized by the idea that when the water hole dries up, the animals look at each other differently.
IIRC, David Strahan also mentions this scenario in his book. (Strahan has a theory of the Iraq war which is based entirely on peak oil, which I found interesting.)
1. Return on Investment: Increased scarcity of energy, as well as increased prices, increase the return on investment for attacks that target energy infrastructure. Whether the actor is an ideologically driven group (al-Qa’ida), or a privateer(youth gangs in the Niger Delta), the geologically-driven declines increase the ROI for attacks on energy, which will drive both decisions to act, as well as targeting decisions for that action. This is a positive feedback-loop because attacks on energy infrastructure and supply drive up the price, which further increases the ROI for such attacks…
2. Mercantilism: To avoid the dawning “bidding cycles” between crude oil price increases and demand destruction, Nation-States are increasingly returning to a mercantilist paradigm on energy. This is the attitude of “there isn’t enough of it to go around, and we can’t afford to pay the market price, so we need to lock up our own supply.” …
3. “Export-Land” Model … In a regime of high or rising prices, a state’s existing oil exports brings in great revenues, which trickles into the state’s economy, and leads to increasing domestic oil consumption. This is exactly what is happening in most oil exporting states. The result, however, is that growth in domestic consumption reduces oil available for export.
4. Nationalism … the territories of nations and states are rarely contiguous. As a result, it is often the case that a nation is cut out of the benefits from its host state’s oil exports. This will be especially apparent when the “export-land” effect reduces the total size of the pie to be divided. As a result, nations or sectarian groups within states will increasingly agitate for a larger share of the pie.
5. Privateering: Nationalist insurgencies and economies ruined by the downslide of the “export-land” effect will leave huge populations with no conventional economic prospects. High oil prices, and the willingness to make high protection payments, will drive those people to become energy privateers. We are seeing exactly this effect in Nigeria, where a substantial portion of the infrastructure disruption is no longer carried out by politically-motivated insurgents, but by profit-motivated gangs.
Geopolitical positive feedback-loops … do not act like logistic curves. They are positive feedback loops that are both self-intensifying and intensified by geologically-driven declines in production. While the geologically-dictated baseline in oil production decline may exhibit a long tail of ongoing production, geopolitical forces may abruptly chop off that tail. Commercial oil production requires some threshold level of security, rule of law, etc. to operate at all. Below that threshold, oil production does not gradually decline, but rather stops completely.