Catalyst - Real Oil Crisis  

Well, I was at the pub so I missed Catalyst's peak oil segment this week - it looks like a reasonable job based on the transcript. One of the main interviewees was Jeremy Leggett, whose book "Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis" I noticed in the bookstores yesterday.

The world's largest petroleum company is ExxonMobil – Esso. It employs 20,000 scientists to generate their own exhaustive data sets.

In their Melbourne 3D seismography room, I meet head of exploration, geologist Dr Doug Schwebel.

Doug Schwebel: OK this is a 3 dimensional image of the geology offshore Bass Strait in Victoria.

Narration: Doug acknowledges oil will run down eventually, he just vigorously disputes when.

Doug Schwebel: Well people have been predicting for over a hundred years that we’re going to run out of oil. It hasn’t happened. We don’t think it’s going to happen in the near term.

Narration: Exxon calculates twice as much oil left in the world as the so called 'early peakers' - placing peak oil decades away.

Doug Schwebel: I mean we’re talking at least out to 2030 with what we know today. And then potentially another 20 – 30 years beyond that with technologies that we can envisage might exist. You know if we can improve technology by only 10% then we can recover an additional 600 – 800 billion barrels of oil.

Narration: If this majority view is correct, we have plenty of time for a smooth, market driven transition to alternatives via hybrid cars.

Cruising in the balm of this reassuring future, it's tempting to dismiss the 'early peak' camp entirely, as a small bunch of vested interest doomsdayers.

But it’s not that easy.

Petroleum giant Chevron is now running these startling advertisements.

And here in Australia, some surprising people have come out in the early peak camp.

Earlier this year, Eric Streitberg asked an extraordinary question at the Australian Petroleum Production and Exploration Association conference.

Eric Streitberg: I asked them to put up their hands if they thought that we had reached peak oil. Fifty percent of the people in the audience put up their hand saying that they believe we’re at peak oil and these are practicing petroleum industry professionals.

Narration: So what if they’re right?

This is what the early peak camp are terrified of – an apocalyptic gulf between dwindling supply and rising demand from the voracious east.

Jeremy Leggett: It’s panic that causes collapses in markets. People start selling their shares. That’s what happened in October 1929 and it just snowballs.

Eric Streitberg: Rationing - people having to queue for three days to get a tank full of petrol, people not being able to afford to heat their houses.

Peter Newman: Getting to 2 to 3 to 4 dollars a litre you really are grinding to a halt.

Narration: But couldn’t we just switch to alternatives – like solar cars or hydrogen?

Professor Peter Newman should know. He’s been trying to prepare his home town of Perth with a post-petroleum transport system - which includes Australia’s first hydrogen buses.