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The dismal truth, Mr Rudd

By Lionel Orford - posted Thursday, 13 December 2007

Dear Prime Minister,

First, congratulations on your historic election win.

You have come to power at a time of a looming worldwide economic crisis; a time when we desperately need “new leadership” to deal with the immense problems ahead of us and an end to the deception, denial and neglect of the Howard era. The news is in and it is very bad news indeed:

  • we have now almost certainly reached peak oil (PO). The highest ever level of worldwide production of all liquid fuels was in 2006. It would now take a minor miracle to raise production above these levels and the rate of decline is almost certain to accelerate over the next few years such that “business as usual” is impossible; and
  • global warming is proceeding much faster than most scientists expected and we do not know how serious the problems will be and how fast they will unfold.

Even though the effects of climate change are likely to be very serious, they are largely unknown and will play out over the coming decades. However, peak oil will have major consequences over the coming years - during your time as Prime Minister.

The unfolding crisis is in several ways analogous to the sinking of the Titanic. We are now at the stage where the ship has hit the iceberg and is already taking on water: its fate is sealed.

The crew is trying to avoid causing a panic among the passengers by announcing “All is well, the ship is unsinkable, there’s no need to launch the lifeboats”. Unfortunately most of the crew are optimists, still in denial of the dreadful truth.

Like the Titanic, this crisis was caused by gross negligence and hubris that led to the belief that the ship was unsinkable. The inevitability of peak oil and its effects have been known for decades, but rigorously denied, based on the belief that our technological prowess has made us invulnerable to reality.

Welcome to the job of Captain of the SS Australia.


Peak oil and the unfolding economic crisis

To those unstudied in PO, it initially seems “no big deal” - something that the market and technical innovation will deal with. The bad news is that the market is completely unable to provide solutions to the demise of its staple food source - cheap energy.

It has been assumed that as crude oil production declines, we will turn increasingly to “alternative” sources of oil. This is a ridiculous assumption based on blind faith; it is completely detached from reality. There are simply no alternatives to oil - no sources that can provide sufficient quantities of liquid fuel fast enough to replace the dwindling supply.

Very soon we will face an oil supply shortfall which will result in a dramatic escalation in the oil price. The result will be a recession, which drives down demand to match supply through “demand destruction”.

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This is a shortened version of Lionel Orford's open letter. The full version can be found here (PDF 97KB).

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About the Author

Lionel Orford is a professional electrical engineer with a long standing interest in renewable energy, energy sustainability and climate change. Lionel has studied the peak oil issue in depth since 2004. See here for further reading on peak oil and other energy and societal issues.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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