New 'disaster' movie warns world of oil apocalypse

The latest gloves-off documentary to hit screens predicts a global meltdown as vital fuel runs out

• Robin McKie, science editor
  
• The Observer
  
• Sunday November 4 2007
  

Oil is 'the bloodstain of the earth's economy' and will soon trigger a global conflict that will cost millions of lives. That is the stark claim of a controversial new film, which says a crash in oil production is about to set off worldwide recession and economic collapse.

A Crude Awakening: The Oil Crash, which opens in UK cinemas this week, shows stark images of rusting Texan and Venezuelan wells and fuel riots in Asia and Africa. Such scenes will be repeated thousands of times around the planet in the near future, argue the film's makers, who say the world is facing changes 'more frightening than a horror movie'.

The film is the latest of several polemical documentaries to achieve nationwide release. Others include Al Gore's An Inconvenient Truth, Michael Moore's Sicko, and the forthcoming Darfur Now, in which Don Cheadle provides a voice-over about the Sudanese civil war.

However, A Crude Awakening has had a boost not available to the rest. Just as its screenings were scheduled to begin here, crude oil prices soared to their highest level for decades, reaching $96 a barrel last week. Petrol and diesel at more than £1 a litre at UK garages is now common.

'This is a bleak and very worrying topic, but we have tried very hard to make it entertaining and exciting,' said Basil Gelpke, who - with Ray McCormack - wrote, directed and produced the film.

And to judge by film festival screenings, they may have succeeded. A Crude Awakening has won prizes at the Zurich and Palm Beach festivals. It is a dramatic depiction of the arguments of economists and geologists who say that the day of 'peak oil' has either occurred or is imminent. Peak oil is defined as the time when the world produces its maximum output of oil and enters a period when prices start to soar as demand rises - thanks in part to the industrialisation of China and India - while supplies dwindle.

The US Energy Information Administration said recently it believed production had peaked last year. Others say it has not yet occurred but is imminent, a point backed by geologist Professor Stuart Haszeldine, of Edinburgh University. 'If we have not reached peak oil already, then I am sure it will be upon us within the next two years.'

In the North Sea, oil production has been declining for years, America reached its maximum output decades ago, and in other parts of the world stocks of easily accessible oil are slowly being used up. 'We have reached the peak of oil production, the question is: how steep is the slope downwards on the other side,' said Matt Simmons, author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy

Oil companies say that there are still major reserves to be exploited. In particular, Arctic and Antarctic fields - which are being freed of ice and snow as the world heats up - are being sized up for their reserve potential.

In Burma, protests over rising fuel prices led to a crackdown by the country's military authorities while in China, where there have been critical fuel shortages recently, one man was shot for trying to jump a petrol queue. Such events are destined to become the norm across the planet, it is argued.

As prices soar and production falters, the world will hurtle into a future of pitched battles over dwindling oil supplies. 'It is not just the threat to transport, ' added David Strahan, author of The Last Oil Shock. 'All across Asia, particularly in India and Bangladesh, farmers use diesel generators to pump water in and out of their fields. If oil prices soar, they will not be able to afford to irrigate their crops. The result could be starvation and food riots.'

In addition, crude oil is a basic necessity in the manufacture of materials such as asphalt and plastic. The construction of a desktop computer consumes 10 times its weight in fossil fuels, for example. Without cheap oil, such products will no longer be affordable.

It is an alarming scenario, although a note of caution was sounded by John Loughhead, director of the UK Energy Research Centre. 'It is true that we may very soon run out of oil from accessible sources, but there are many other types of fuel that we could exploit,' he said.

At present, energy companies exploit a field only if they think they can get oil out of the ground at a cost of less than $18 a barrel. This is a very conservative estimate, given current prices. At present oil is being sold at over $90 a barrel. 'If, in future, companies use a more realistic figure of $40 a barrel instead of $18, that would make many, many more reserves suddenly become economical - the oil tar fields of Alaska, deep water reservoirs, and others,' Loughhead said.

'The trouble is that it is very difficult to estimate future oil prices. Ten years ago they stood at around $10 a barrel. Now they are almost 10 times that. Certainly, I doubt oil will be cheaper than $40 a barrel again, so that means many more fields which once seemed uneconomical will become better bets for exploitation.'

Loughhead said oil was just a small part of the range of hydrocarbons found in the ground. 'It is becoming easier and easier to turn substances like coal and gas into liquid form and use that as a substitute for oil, so fuels based on hydrocarbons will still be with us in some form for a few decades yet,' he said.

Fuel figures

· The United States has 2 per cent of the world's oil reserves and consumes 25 per cent of its annual production.

· 98 per cent of all energy used for road, rail, ocean and aviation transport is provided by oil products.

· A barrel of oil is 42 US gallons, or 34.97 British gallons or 159 litres.

· It is thought there are between 1,000 and 2,000 billion barrels of oil left in the planet's reserves. The world produces 75,000 barrels a day.

· It would take a man working for 25,000 hours to generate the same amount of energy that is stored in one barrelful of oil