Peak oil is here: German think tank

What will 2010 be remembered for? According to a leaked report from a German think tank, this could be the year that witnesses the arrival of peak oil: that is, a global maximum in petroleum production levels to be followed by a steady — or precipitous — decline.

The report from the Bundeswehr Transformation Centre, described in Spiegel Online, was prepared for the German military but not intended for release. The study warns of security impacts likely to develop as global oil production peaks and then dwindles. Among those effects, which — according to the report — could be felt within 15 to 30 years:

• Rising prominence of oil-exporting countries: As petroleum becomes harder to come by, those nations with any supply to spare will be able to flex more global muscle and expand the scope of their influence;
• Less free market, more politics: Growing competition for dwindling oil supplies will likely bring a return of more of the “privileged partnerships” last seen in petroleum markets before the 1973 Middle East oil embargo;
• Price shocks, shortages, rationing and collapse: With nearly every aspect of modern society — from agriculture and transportation to medicine and communications — dependent upon oil, declining supplies could lead to a global chain reaction of economic and political crises.

The German report echoes the analysis offered by a similar study released in March by the US military. The “Joint Operating Environment 2010” document, prepared by the US Joint Forces Command, warned that the world’s “surplus oil production capacity could entirely disappear” by 2012. Such an energy shortfall could lead to food shortages, regional breakdowns in security and a growing risk of petro-dollars being siphoned into terrorist networks, the report found.

Leaders in the UK have also recently been wrestling with the spectre of looming energy shortages. Earlier this year, the UK Industry Task Force on Peak Oil & Energy Security warned an oil crunch could begin hitting Britain hard within five years. And the Guardian recently reported that UK officials, while in the past dismissive of the peak oil concept, appear to be closely guarding documents related to the issue from public release.

As the late and greatly missed oil industry analyst Matthew Simmons once noted, peak oil is “one of these fuzzy events that you only know clearly when you see it through a rear view mirror, and by then an alternate resolution is generally too late.”

If those experts in Germany, the US and the UK are right, we might find ourselves peering into that rear view mirror sooner than some expect.