Our civilisation is built on technology. Technology is based on cheap energy. And cheap energy is about to run out, writes Eamonn Dwyer.

What image does the word bring to your mind’s eye?

Is it seabirds, choking to death under a thick black coating? Or maybe you envisage the burning wells of Kuwait, turning the day night with their acrid smoke? Or perhaps it brings to mind the ruddy, intense features of Daniel Day Lewis, greased top to bottom with his greedy bounty.

The psychological image of oil in the late new century is one of money, war, and ecological disaster. Yet it is a truly extraordinary substance that permeates and props up almost every aspect of our lives. It has allowed modern civilisation to take on a scale and velocity of unimaginable proportions. The motorways and shipping lanes and airways float on rivers of it. It is the Atlas which shoulders the harvest of seven billion hungry mouths. Where mules and slaves and labourers were once required, heavy oil-operated machinery farms, processes and transports in quantities our forefathers would have never thought possible on the same land.

Oil, like all fossil fuels, is incredibly dense in energy. Consider how much is contained in a few splashes of petrol. How many people would it take to push a Land Rover up a one mile incline? Now consider how little oil it would take to accomplish the same in a fraction of the time.

Plastics, made from oil, dominate our consumption existence. The device you are reading this on is made out of oil. The keyboard you type on. The water bottle you drink out of. The trainers you wear. Your CDs and DVDs. Your toothbrush. The packaging you unwrap and the bin you put it into. Thirty-two litres of oil go into the production of a single tyre. That’s four tyres a car, eight hundred million cars on the planet and rising; the new middle classes of China and India want theirs too.

As our needs and wealth raced upwards over the twentieth century, there has been a colossal increase in the supply of oil. It now runs at eighty million barrels a day, with demand rising again in the Asian economies. As the world’s population increases and economic growth continues, the demand for oil will continue to accelerate.

Ask the man on the street when it will ‘run out’, and he’ll cast his eye into the distant future.

In fact, oil will never run out. The easy oil is used first; the pop-a-straw-in-the-sand oil. Then, the heavy crude that needs refining, or drilling offshore. And then the really difficult stuff remains, like Canadian tar sands or plumbing what lies below the floating ice caps of the Artic. The harder oil is to extract, the more expensive it is. Once the energy input in extraction is higher the output from the oil itself, there is no point in extracting anymore. The oil is left in the ground.

This is one of the reasons oil production rises, peaks and then declines over time. It is known as Hubbert’s Curve, and accurately describes the rise and fall in oil production in well-funded reserves such in the North Sea and the United States. What matters is when the global oil supply cannot keep pace with demand. This is Peak Oil; unlike the depletion of an individual oil field, we will have no other reserves to turn to.

With increasing demand hitting the supply ceiling, prices will spike. High oil prices helped precipitate the recent recession. When demand has been destroyed, prices will fall. Over time, the economy will recover and demand will increase again, until it hits the new, lower supply ceiling, causing a deeper recession. This is known in Peak Oil circles as the ‘bumpy plateau’, before the inevitable decline.

It may be possible to temporarily mitigate the effects of Peak Oil through the use of non-conventional oils. These include liquid gas and coal-to-liquid technology. Both fuels are incredibly carbon-intensive, and their widespread use would massively increase the effects of global warming. Whatever you think of manmade climate change, attempting to offset its impact and reconstruct our food supply in the middle of the largest recession in living memory is a tall order.

Natural gas and coal are finite fossil fuels as well; while they are not predicted to peak for decades, the growth in demand would bring forward their demise much more rapidly than is currently charted. The price of oil and coal would increase massively from the surge in demand; as most of our electricity is generated by natural gas and coal, baseline energy costs would increase worldwide.

There are those who presume renewables will fill the gap, but this is a bad misreading of the crisis at hand. The electrification of the world’s liquid transport is a colossal enterprise that requires huge capital resources. Even if completed, where will the huge extra energy for the national grid come from? What will replace rapidly diminishing fossil fuels?

Tidal generators have been unable to overcome the highly corrosive effects of salt water and require large amounts of energy to be built anew.

Solar only works during the day, and it would take ninety-one million solar panels running for fifty years to generate the same amount of energy contained in a cubic mile of oil. It also currently takes five years to break even on the energy costs of construction, and they only last thirty years.

Biofuels require arable land, which will be in high demand once the food crisis hits. In America, more energy is spent in the creation of the fuel than remains in the fuel itself.

Nuclear works, but the power plants take ten years to build with huge amounts of fossil fuel energy, and we may already be at Peak Uranium.

Windfarms would need to entirely cover several British counties to match the current national grid output. The infrastructure takes years to build and huge amounts of capital. Offshore windfarms are the UK government’s preferred option but leave the country’s electricity supply hanging on the outcome of a bad storm at sea.

While many of these options offer local solutions, none can replace the current capacity of the national grid, let alone match the rise in demand. Without a replacement energy source, economic growth will stagnate and turn into decline. Take modern shipping, the basis of globalised trade. The sail ships of old - a direct and efficient way of utilising wind power which will undoubtedly return - had limited carrying capacity. Reliant on not only wind, but the right wind, shipping lanes were erratic. Consider today’s 100-tonne hulkers. Massive sky sails can save 10 percent of fuel use. Solar panels can add a derisory 0.2 percent. The shipping industry is already on the brink of collapse because of a massive decline in orders.

Mainstream environmentalists seem reluctant to deal with or publicise Peak Oil because it gives the impression that global warming will solve itself and gives Joe Bloggs an excuse not to take an action. They don’t seem to have any awareness of how devastating Peak Oil is for the economy. The director of Greenpeace, Stephen Tindale, told energy journalist David Strahan that Peak Oil would be an "excellent outcome".

The problem is that demand will drive up production of synthetic oils such as coal-to-liquid or the Canadian tar sands. These will be far worse for global warming than petrol or diesel. By the time we’ve run down global supplies, we will have sped up global warming dramatically, and left ourselves without the hydrocarbon energy to deal with the climate change.

The Green Party seem singularly unaware of the dangers of fossil fuel reliance. Their big idea is to cut carbon emissions through decentralised heat and power systems that use fossil fuel. If they are truly aware of the implications of Peak Oil, wasting capital expenditure on new power systems at huge expense that rely on fossil fuels is dangerously misconceived. At least George Monbiot gets it, and advocates Nuclear Now.

Almost no mainstream politician wishes to address the issue of Peak Oil. This is not surprising as our modern economies depend on ever-expanding growth, and their continued authority depends on delivering it. Some politicians are undoubtedly self-deceived, still believing that the free market will defy the laws of thermodynamics through magic bullet technologies.

An exception is Richard Herbert Cheney, who spoke candidly out about the dangers of oil depletion in 1999. In the context of Peak Oil, the Bush/Cheney US conquest of Iraq is wholly explicable. It has the second biggest oil reserves in existence. Now the US has a constant reserve of 50,000 soldiers in the biggest embassy on the planet. The oil may well be going on the free market now, but America is ideally placed to defends ‘its’ resources by force.

The UK government is apparently in desperate denial. Downing Street says Peak Oil will not occur until at least 2030, quoting the International Energy Agency’s annual energy report. Unfortunately for the credibility of the IEA, two whistleblowers from the organisation recently revealed it was deliberately overestimating the oil reserve figures under pressure from the US government. Not that Gordon Brown seems to have noticed; he declared only last week that more families should "fulfil their dreams, whether that’s owning a bigger house, taking a holiday abroad, or buying a new car".

But if you follow the smoke signals, you can see the signs of panic from the mandarins. In addition to the recent windfarm announcement, the Government’s 20-year food plan promotes a massive increase in locally grown food.

This may be because the most disastrous effect of the end of oil is on agriculture. The industrialised machinery of modern farming will find it can no longer run on cheap energy. Natural gas-derived fertilisers alone account for 40 percent of the world’s dietary protein. The costs of importing and exporting food by sea or air will become prohibitive. For high-yield countries, this is economically devastating. For big food importing countries like Britain, it spells potential catastrophe.

Oil has fuelled the greatest increase in our population in history. When my parents were born, there were two and a half billion people on this planet. That number has almost tripled and is predicted to rise to nine billion. At a time of unprecedented hunger and a looming food crisis, we are inviting more souls to a beggar’s banquet. People talk about unending ‘sustainable’ growth but plainly, nothing physical can grow forever, no matter how ingenious our societal engineers are. It can merely rise, and fall.

Our economic and political paradigms are trapped in the world of the past two hundred years. One way or another, that world is drawing to a close.

This article is the second of a two-part study of Peak Oil. Read part one, on our addiction to oil, here.