Originally published in PC Plus magazine

We live in a world where technology delivers a multitude of little miracles. From the ubiquitous Blackberry to the sat-nav systems in our cars, we’re living in an always-on world of instant global communication, on-demand data and computing power that would have been undreamt of a few decades ago. Our economy is overwhelmingly electronic, from the zeroes and ones of electronic banking to the ecommerce sites killing big-name retailers, and in an increasingly cashless society we’ve replaced notes and coins with chip and PIN. The problem with these little miracles is that they all require power – and it’s running out.

In October, UK businesses were warned that they might need to close during the winter due to the double whammy of fuel shortages and rocketing energy prices. The predicted cold snap didn’t appear (or at least, it hasn’t so far) and an energy crisis was averted, but we’re not out of the woods yet. In early February we were stunned by a 22% increase in the cost of gas; by the end of the month, an explosion at the UK’s main gas storage field left the entire country with just two days’ worth of gas – one-seventh of the usual capacity, and one twenty-sixth of the European average.

The gas problems will go away, in the short term at least. However, when you look at the bigger picture the UK is in a very vulnerable position. Less than four percent of our electricity supply comes from renewable sources; if something were to restrict our fuel supplies, we’d be in trouble. According to think-tank the Foreign Policy Centre, if extremists controlled the world’s oil supplies and increased the price to $161 per barrel, we’d suffer “devastating economic problems” and energy rationing. The FPC even suggests a return to the days of the Blitz, but instead of air raid wardens we’d have “energy wardens”. The group suggests that “the mentality at community and householder level must be similar to that of the war years, or Britain will have no energy future.”

The FPC’s doomsday scenario assumes that any fuel shortage will be artificial rather than natural. However, many adherents of the Peak Oil theory believe that not only will our finite fuel resources run out, but that the process is already well underway.

Peak Oil was first proposed in 1956 by geophysicist Marion King Hubbert, who predicted that US oil production would peak by 1970 and that global production would peak in 2000. He was partly right: US production peaked in 1971, but global production continued to rise as 2000 came and went. Then again, Hubbert couldn’t have predicted the mid-70s oil crisis, which reduced demand and, perhaps, postponed the global peak.

As the Washington Post reported in June 2004, conventional oil production is indeed in decline: “For every 10 barrels of conventional oil consumed, only four new barrels are discovered. Without the unconventional oil from tar sands, liquefied natural gas and other deposits, world production would have peaked several years ago.” According to the Worldwatch Institute, in figures quoted by oil firm Chevron, oil production is declining in 33 of the 48 largest oil producing countries – but as developing nations grow more industrialised and our own insatiable desire for energy shows no signs of abating, demand for oil continues to rise. The most pessimistic estimates suggest that if demand stays relatively static, global oil production will peak in 2015.

The oil will not run out overnight – we’ve got a few decades after the peak – but as demand begins to significantly outstrip supply, energy prices will soar. In the absence of alternatives – how many of us drive hybrid cars or have energy-neutral homes? – and with promising technologies such as fuel cells still stuck in the labs, things could get nasty. Increased transport costs and energy costs will have a huge impact: they’ll increase firms’ costs and push up the prices of all products and services while taking an ever-larger chunk of our incomes; blackouts will become the exception rather than the norm, and we may have to endure 70s-style three day weeks. And that’s the best-case scenario. Pessimists predict that oil-producing nations will hold the rest of the planet to ransom, and that the oil-dependent nations will use force to secure fuel supplies.

So what are we doing about it? Not as much as we should, it seems. The government wants 10% of our energy to come from renewable sources by 2010 and 20% by 2020, but it seems that we won’t hit those targets in time – and if Peak Oil theorists are correct, by 2020 fuel supplies will already be in steep and irreversible decline. If new technology is going to save us from our dependence on oil, it really needs to get a move on.