The time of harbingered catastrophes constituted a time of learning, discovery, and experimentation related to the awareness of a civilizational change. Societies were confronted with an epochal shift that represented the dislocation of the core engine of growth from reproducible and universal productive factors toward exhaustible, non-renewable, and unevenly distributed resources. With fossil fuel consumption mounting to unprecedented levels and no clear idea of the remaining stocks underground, there was a growing sense of alarm as to whether the resources might run out in the near future.
Ultimately, the pessimism associated with the first forecasts
sprang from a determinist conception of human action. Determinist is used here
to mean that given an array of initial conditions, no alternative outcomes were
feasible. For depletion viewpoints, not only did all factors push toward the
same outcome, but the unintended consequences of these factors also did so.
Strange though it may seem, the first generation of conservationists did not
foresee (or, at least, failed to mention) that, at a certain point, consumption
would begin to fall if the price of natural resources began rising. The
disregard for every factor that might counteract the lemming-like rush toward “depletion
day” set the stage for the realization of a catastrophic
outlook. With economic growth, technological innovation, population growth, and
social affluence all driving the increase in fossil fuel consumption, the time
would be reached when the last non-renewable resource was consumed and spent.
The striking point in this conception is that peak production fully coincided
with depletion: Fossil fuels would cease to exist precisely when humanity was
consuming the most commercial energy. It is this assumption of rising
consumption trends through to depletion that is largely responsible for the
dramatic, teleological representation of a Doomsday scenario. Central to
such a view is the formalization of reserves-to-production ratios(R/P),
calculated by dividing the estimate of proven reserves by the current level of
production. The result discloses the time remaining before oil becomes
completely exhausted, assuming the current level of extraction remains
constant. Bluntly interpreted, reserve-to-production ratios become the telltale
signs of an impending, unavoidable, threatening deadline.
Notwithstanding the doubts and uncertainties that surrounded the
depletion scenario, the engagement of governments, social interests, and
scientists in a prolonged public debate contributed to ingraining the idea
throughout societies that the valuation of the future entailed choices in the
present. And the more extensive the appraisal, the more justified the change.
Following the theoretical insights made by other social sciences, we make
recourse to the “time discount” concept to assess how people ascribed a present
value to the rewards to be received in the future. Somehow, time discounting
quite sharply reflects the environmental stand toward conservation and how much
people are willing to save or sacrifice their current benefits for the sake of
a more balanced future. According to this concept, a high time discount rate
means that future rewards hold only a small present value so that a higher
discount is placed on potential returns. Low discount rates mean the reverse: A
higher appraisal of what is to be collected in the future. Moreover, it is
assumed that people may either discount utility according to inter-temporal
preferences or set their own discount preferences in line with political and
moral values such as intergenerational solidarity or landscape preservation.
As the Fig. demonstrates, the
environmental point of view held by conservationists is represented by a dashed
line. They perceive access to natural resources as part and parcel of
citizenship and that the market should discount future profits at the same rate
as society would wish to discount the welfare of future generations.
As these natural resources are not just economic goods but the
national heritage of future generations, the closer society comes to “depletion
day,” the scarcer the asset becomes and the higher its present value should
also become. Therefore, the future rewards of present resources tend to evolve
in a hyperbolic slope.
The second perspective is that of political economists and is
portrayed by the solid line. What distinguishes this strand of thought is its
recognition that the current value of fossil fuel resources will tend to
increase in line with the approaching date of exhaustion. The reason for the
future escalation of prices is the “degradation of costs” provoked by
extracting oil (or coal) from deeper, smaller, and thinner reservoirs. Although
technological improvements could contribute to slowing this trend, their
overall effect is offset by the greater costs inevitably incurred as extraction
meets new and more difficult conditions.
Finally, there is the stance taken by oil explorers, companies, and
others involved in the trade and described in the caption to the Fig. as “economic interests.”
Altogether, this group had to face the discourse of impending
shortage and contend with the sheer inevitability of “D-day.” However, it did
seem acceptable to believe that future additions to known reserves might extend
the depletion gap to unimaginable levels and behave as if “D-day” was
completely out of both sight and mind. To underpin this position, they claimed
that the present value of rewards should remain unchanged into the future.
The noteworthy point behind the different valuations of the future
is that all streams of thought shared the same belief toward the forthcoming
time in which the last available non-renewable resource would be spent at the
very peak of production.
Fossil fuels were doomed to disappear precisely at the moment when
they were most needed: peak meant catastrophe.
It took some decades before the refutation of this thorny
perspective emerged. Even nowadays, the idea that total exhaustion coincides
with the moment of maximum production sometimes looms in public comments.
However, in as early as 1956, an American geophysicist working at the Shell
research laboratory, in Houston, made an important contribution that shattered
these preconceptions. His name was King Hubbert. According to Hubbert, peak
production does not signal the exhaustion of recoverable oil, but rather the
reaching of the halfway point on the way to global exhaustion. On the
historical time line, the peak indicates that humanity has extracted half of
the oil that will ever be produced. Thanks to this viewpoint, the whole debate
shifted its course from “how long will oil last?”—a question couched in
reserves-to-production ratios, to “when does the peak of oil production
occur?”—a question grounded in the estimate of the resources still
undiscovered. Henceforth, the size of the unknown offset the accuracy of that
already known.
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