Sliding down the Hubbert Curve

There have been numerous TV shows and countless newspaper and internet articles on the subject of peak oil.  As someone with an interest in writing SF  the world beyond peak oil is thought provoking. (I happen to believe that SF should have some resemblance to historical analysis to the extent that we try and look at how technology/economy changes society. )

The oil experts agree that world oil production will follow a bell curve. Above is the Hubbert prediction from 1956. Beyond the peak of production, which predictions say we are now close to, although oil is still plentiful, costs start to rise.

Above is a graph of inflation adjusted oil prices (1946 - 2010). The effects of two oil crises appear as perturbations on the graph. It might be tempting to think that peak oil will be nothing more than another perturbation. And yet the price history we have seen, with a year 2008 maximum followed by a recession lead slump, is only the behaviour of prices on the upslope of the Hubbert curve. The upslope is a time of increased production where economies of scale are reducing real production and distribution costs. 

The characteristics of the upslope of the Hubbert oil curve are the enabling of new technologies that depend on hydrocarbons. The upslope brought mechanised agriculture, car ownership, agrichemicals, plastics, mass airtravel. And a new, much larger middleclass. The nature of the 20th century is bound to the upslope of the Hubbert curve. 

What we don't know is what the downslope will bring. Maybe the reverse?

In Britain petrol is now costing over 6 pounds per gallon. Even now, before we start our slide down the Hubbert curve, this is  nearly 3 times the cost of eqivelant off-peak electricity.  (1 gallon of petrol is approximately equivalent 43.7 kw/hour. 1 kw/hour cost 4.95 pence, off peak) 

Modern agriculture is very energy intensive. A recent documentary stated that about 100 calories of energy in hydrocarbons is needed to produce 1 calorie of food energy. And this is not counting transportation and packaging. Modern farming is highly mechanised and artificial fertilizers and insecticides are derived from hydrocarbons. High energy agriculture  has made the developed world very efficient in labour terms. (In Britain now only 1.4 % of the workforce work the land. In the USA it's 1.9%.)

So, can this kind of agriculture be sustained against rising prices for hydrocarbons?

After the fall of the Soviet Union Cuba went through an agricultural crises.
Cuban Ag crises Suddenly it found itself unable to grow food in the previous, high energy, fashion that its alliance with the Soviet Union had permitted. It had to back pedal. Currently, in Cuba, over 20% of the workforce are involved in agriculture. This amount of labour is caused by Cuba's inability to afford high energy agriculture.
The Power of Community: How Cuba Survived Peak Oil

We might have to change the way we do agriculture and go back to labour intensive farming. Not that this is entirely a bad thing. Organic farming produces healthier, tastier food. It is less energy intensive and eliminates many agrichemicals. Moreover, fresh locally produced food is mandated when high energy transport and preservation is not possible.

What else?

In Germany it is claimed that 1 in 7 of all jobs are car industry related. This is the kind of argument that has allowed the German car industry to lever about a billion euros in tax credits out of the taxpayer towards developing alternate fuelled vehicles. (BMW have just claimed the largest profits in the company's history. Free market fundamentalists may explain, if they can, why these car makers need to be given a state hand out to enable them to develop the technology to stay in business.)  Never mind, it is technically possible to develop renewable energy cars. Within ten years or so, the technology for renewable energy cars, (electric or hydrogen) and as good as petroleum powered, in terms of range, performance and general reliability will likely be developed.

A more interesting question is, will the market for mass volume cars still be around? If agriculture is restructured to be labour intensive somebody is going to have to be working the land. Agricultural work never was well paid. And we cannot easily go back to the farming of earlier times. Farms are much larger now, and ownership is not widely distributed. The efficiency gains of the last 60 years caused many small farms to consolidate into larger ones. The agricultural jobs of the future will be for employees, not owner occupiers.

What if we go to Cuba levels of agricultural employment?

Not since 1931 has 20% percent of the US labour force been employed in agriculture.

The 20th Century Transformation of U.S. Agriculture and Farm Policy 

The 1930s were not a time of high car ownership. The wealthy middle classes could afford them, it helped if, say you were a doctor and you needed one for work. But for an agricultural worker car ownership was totally out of the question. 

By 1930 agriculture had become somewhat mechanised, we didn't yet have the efficiency gains due to agrichemicals. As we slide further down the Hubbert curve we might expect further enlargement  to the the agricultural labour force if mechanisation becomes too expensive to sustain. (In 1900 41% were employed on the land. In a sense the early mechanisation of agriculture made the huge standing armies of the First World War possible. Those people were freed from the land for the battlefield.)

So where will these additional agricultural workers come from?

The service sector includes air and road transport which are vulnerable to fuel costs. And the new labour intensive agriculture will be local sold, we don't expect to shift food huge distances any more. Airtransport and numerous supplier businesses will also suffer. Despite the fantastic efficiency of combustion engined airliners the increasing cost of fuel will limit demand. (Electric powered mass airtransport is unlikely.) 


Food will cost more which means less disposable income. This will further hit service sector jobs and the car market. Expect fewer jobs in  manufacturing as well. In short, there will be no shortage of formerly well paid middle class types  to work the land.

But there will be some new jobs. Mass transportation systems that lend themselves to electric power will be in demand once more. Electric power, from nuclear or renewable sources will continue. Just don't expect it to get cheaper.

However, one way or the other, it seems likely that the middle classes, as a percentage of the population, are set to grow smaller. A reversal of a trend that's been under way for all of the twentieth century, in short, this could get very interesting....