The Hirsch Report

Peaking of World Oil Production

The Hirsch report, also known as Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, was created by Dr. Hirsch by request for the US Department of Energy.


Dr. Robert Hirsch

Dr. Robert Hirsch author of 'The Hirsch Report'

The report describes the impact of peak oil on society and which actions should be taken to prepare the world for the decline in global oil production. It was published in February 2005.


"Peak oil brings an unprecedented risk management problem to the United States and the world. When the decline in global oil production occurs, the price of fossil fuel will increase dramatically. Without proper preparations, the social, political, and economic costs will be unprecedented. Viable alternatives exist on both the supply and demand market, but to have substantial impact, they must start atleast ten years before the peak in global oil production."

Conclusions

The report states that: "The era of plentiful, low-cost petroleum is approaching an end."

Based on that statement the following conclusions were described in the Hirsch Report:

» Global peak in oil production is going to happen, and most likely abrupt.

  • Global oil production will peak and decline thereafter.
  • There are observers who predict peak oil will happen within a decade; other observers claim it will occur later.
  • Peak oil is going to happen, but when is not certain.
"Oil production is already in decline in 33 of the world’s 48 largest oil producing countries."

» Peak oil will have a dramatic impact on global economies, especially on the United States.

  • The United States economy is based on the availability of low-price oil.
  • The impact of peak oil could be measured on a trillion dollar scale for the U.S.
  • Using alternative energy instead of oil could provide substantial mitigation.

» The peaking of global oil production represents a unique challenge.

  • Without massive preparations, the impact of peak oil will be disastrous and long-term.
  • Transactions of energy in the past(wood to coal and coal to oil) were step-by-step and evolutionary.
  • Peak oil will be abrupt and revolutionary.
"In every crisis, there are always opportunities for those that act decisively."

» Peak oil creates a huge problem for transportation.

  • Most vehicles have a lifetime of decades.
  • Adjusting all the vehicles for alternatives of oil is impossible.
  • Important transportation such as airplanes, motors, trains and boats have no alternative energy for oil.

» Preparing the world for peak oil will require much time and effort.

  • Waiting until peak oil occurs would leave the world in an energy shortage for 20 years.
  • Starting a crash program a decade before peak oil occurs would leave the world in an energy shortage of 10 years.
  • Starting a crash program two decades before peak oil occurs, could avoid the world to enter an energy shortage.

» The supply and demand side will require attention to prepare for peak oil.

  • A sustained high price of oil will cause a global recession and unemployment.
  • Production of oil alternatives can and must be supported and encouraged.
  • The knowledge to produce alternatives for oil is available and economically feasible.

» Classic form of risk management.

  • Peak oil is a classic form of risk management.
  • If peak oil is long delayed, preparation efforts earlier than required may be unnecessary.
  • But, if peak oil occurs sooner than expected, peak oil could have a disastrous impact.

» Government intervention is necessary.

  • Both social and economical implications of peak oil would otherwise be disorganized.
  • Major changes to existing administrative procedures may be required.
"Governments will have to take the initiative on a timely basis."

» Economic unrest is unavoidable.

  • Without proper preparation, peak oil will cause a global economic crisis.
  • Existing technology can solve the peak oil problems, but only if the world responds on time.
  • Future technologies will help, but not on a short time scale.

» More research is necessary.

  • Effective preparations for peak oil require more knowledge about the subject.
  • The risks and possible benefits of possible preparations need to be researched.

Possible Scenario's

The Hirsch Report states there are three kind of scenario's that can occur when peak oil happens. These scenario's are:

  • Waiting until peak oil occurs would leave the world in an energy shortage for 20 years.
  • Starting a crash program a decade before peak oil occurs would leave the world in an energy shortage of 10 years.
  • Starting a crash program two decades before peak oil occurs, could avoid the world to enter an energy shortage.

Impact of Peak Oil Beyond the U.S.

The Hirsch Report strongly recommends starting an oil crash program which supports new technologies and implements changes in the behavior of people regarding energy usage in the U.S. Dr. Hirsch urges the peak in crude oil supply is reason to take action immediately.


The Hirsch report states: "Without massive mitigation the problem will be pervasive and long lasting."

Top World Oil Consuming Countries

this table shows the top world oil consuming countries

As for the usefulness of the Hirsch Report outside the U.S, the United States consumed around 25% of the global oil in 2004, while the share of population was around 4.2%. Europe consumed around 10% of the global oil while having a population around 6.7%. An average auto in Germany consumes around 8.0 liter every 100 km, an average auto in the United States consumes around 16.0 liter. This means in the U.S 1 gallon of oil can be used for 23 miles, in Germany the same amount can be used for 45 miles.


Unlike the United States, both European and Asian countries have implemented a part of the changes proposed by the Hirsch Report. Europe implemented changes after several oil crises and introduced a much higher tax on gasoline.


The difference between European countries and the United States are not only the lack of alternative energy use, but also the way people live. The population of the big cities, use of public transport, share suburbs and behavior of the consumer are all better organized in Europe compared to the U.S. When peak oil occurs it will have a much bigger impact in the U.S compared to other countries in the world.


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