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Given this pervasive dependency, the risks of oil depletion for industrial
civilization are potentially catastrophic. A consistent correlation exists
between historic oil price spikes and economic recessions, including the
recent global recession (Hamilton 2009, 2011). If no substitute is found
to match the energy density and versatility of oil – and none is available at present - the peaking of global oil production signals the end of
economic growth and globalisation. Peak oil will likely precipitate economic contraction, mass unemployment and the collapse of government
services and social welfare programmes as the tax base shrinks. Opportunities for investing in alternative energy infrastructure will diminish; and, actual or anticipated social unrest may lead to more autocratic
government.
According to the International Energy Agency conventional oil peaked in
2005-06 (Birol 2010). To meet the continuing growth in global demand
the shortfall is being met with non-conventional oil and gas which are
more expensive, harder-to-access, and more environmentally polluting.
All liquids production has reached a plateau and no longer responds to
rising demand and higher prices (Murray and King 2012). The post plateau decline is likely to be earlier and steeper than mainstream forecasts
have predicted. Depleting conventional fields require more energy-intensive extractive technology, and non-conventional sources also have
very low energy return on investment ratios (EROI) (Murphy and Hall
2010). Low EROI means less energy is available for social and industrial
use. Maintaining economic growth through the transition to alternative
energy is implausible given the unique energy density, transportability
and versatility of oil, and the economic and political constraints on investment in new energy infrastructure in a period of increasing austerity
and capital scarcity. The most likely post-plateau energy scenarios for
industrial societies now lie on a continuum between forced, gradual energy descent and rapid collapse.