There are two key elements behind the IEA’s statement. When it talk about the risks of “volatility,” or the risks of market stress, there is first of all a cyclical phenomenon linked to the post-COVID recovery. And then there is a much deeper phenomenon, which is the increasing problems for oil companies to go out and find untouched oil resources to compensate for the half of the world production that is structurally declining because the reserves are in depression.

One very important notion in the oil industry, as for any extractive industry, is “resource maturity.” When we talk about a “mature” resource, it means that we have extracted at least half of the existing reserves. Today, the IEA and the main sources of reference have established that roughly half of the world’s oil production is mature. This means that it can only decline.

This is why, in 2018, before the COVID crisis, the IEA said in its executive summary to policymakers that the peak of conventional liquid oil production — which constitutes three-quarters of the total — had been crossed; and it was crossed in 2008, the year that the subprime bubble burst, supporting the thesis that there was a cause-and-effect link between the crossing of the conventional oil peak and the subprime crisis.

When the IEA published this report in 2018, it was already pointing out the deep and systematic difficulty that oil companies were having to find resources to compensate for the decline of existing sources. This is why they warned of the risk of a supply crunch by 2025, if shale oil production couldn’t triple to 20 million barrels per day by 2025 — at the time, production was around 7 to 8 million per day.

This is not happening at all. The COVID-19 crisis has aggravated the deficit in oil investment that was already present in 2018. We are seeing the tensions play out right now because the investments in nonconventional and extreme petrol sources — shale oil, ultradeep offshore drilling — that would have been necessary to offset the decline have not been made. The demand has come back since, but there is a lack of additional production capacity. One thing that is very important to know about the oil industry is that if you do nothing, if you stop investing, production cannot be maintained.

This is a classic illusion that is false for two reasons. One is an economic reason, which is that — as we constantly see — the barrel price has a recessionary character. There is very little elasticity in the demand for oil at the barrel price. This is precisely what happened in 2008: when people can’t afford to pay for gasoline or heating oil, they cut back on other expenses, such as mortgage payments. If you say that it is enough for the price of a barrel to rise to $150, $160, or even $200 — as was imagined at the beginning of the 2010s — for investments to be made, then you run into the recessionary character of the price per barrel.

But it’s also fundamentally wrong, on an even deeper level in my opinion, for physical reasons. The “marginal” barrel is found in increasingly inaccessible places. The horizon for the oil industry has been offshore drilling, then the “deep” offshore. Now people are talking about “ultradeep” offshore drilling or the Arctic.

This simple symptom shows that there is a problem. What I am describing is anything but a novelty or a secret to industry executives. For them, it is a fact of life. Mobil’s boss, at the time of the 1998 merger with Exxon, said that we had arrived at the end of the era of “easy oil.” Since then, we have developed agrofuels, oil sands, ultradeep offshore, all of which are more expensive and more complicated to produce than conventional oil, which has reached its limits.

This is a fundamental, physical problem. We’re at the end of intact and easy resources. We’ve reached the end of “easy oil.” Now we’re entering the era of hard oil, and therefore it’s going to be increasingly difficult to compensate for the decline of easy oil with tight, deep, Arctic, or whatever oil. For us, this means something very simple. It’s not just because of the climate that we have to get out of oil. The party’s over.

In the United States, you have taken stock of the Vietnam War. But have you really faced up to the motives for the Iraq War? There has been no Apocalypse Now for the Gulf Wars. What was involved in all of this? It was the will of the Oil Men to get their hands, to plant the American flag once and for all, on the most oil-rich area in the world. As we know now, it was an exquisite failure. But we have forgotten too quickly, unfortunately, the reasons that pushed Dick Cheney and his clique to lie before Congress and the United Nations. This is supposed to be the century of the exit from oil, but it began with a war for oil. As I see it, we should take this as an absolutely dazzling historical warning.

For a very simple reason: this is data that has a very high economic value, which you’d normally have to pay for. If you have a few hundred thousand euros, you can access this data. Unfortunately, this is rarely the case for a humble university researcher. These business intelligence consultancies are essentially mutualized spying agencies. You spy on your competitors, and everybody spies on everybody else. The fact remains that this data, which poses fundamental questions about the future that concern everyone, is normally reserved for industrialists. It came out now because there is a real problem relating to the durability of the world’s oil production.

There is inflation but also price volatility, so not only very high but also rapidly changing prices. For most of the twentieth century, oil prices were very stable. On the one hand, oil companies will now need a high price to get oil from the Arctic and so on. And at the same time, there is the recessive character of the price of the barrel.

Indeed, in recent history, we already have examples. I defend the theory that what happened in 2008 was an oil shock. What we saw in 1973 was a result of the peak of the American conventional oil production, which occurred in 1970. In 2008, what happened? What burst the subprime bubble? The rise of Federal Reserve interest rates, which steadily increased between 2003 and 2006 to stave off the inflation induced by the historic, unprecedented rise in the price of oil, especially due to the end of easy oil.

It’s a comically underconsidered fact. No one will tell you that the Fed’s rate hike didn’t have a direct effect on the bursting of the subprime bubble. Everyone also knows, if only because it’s written in the Fed minutes, that the fundamental reason for the increase in interest rates was the increase in the price of oil from 2003, from about $30 to well over $100 per barrel. We saw major producers, including Saudi Arabia, facing historic difficulties in maintaining production levels. This is also the period of the decline in the North Sea — a textbook case of an irreversible drop-off in production. From my point of view, 2008 was very clearly and directly an oil shock. It was the first great crisis of the limits of growth.

I am not saying all of this to push a thesis, but to make the point that it is worse than if we faced a purely “economic” problem. This is an ecological and fundamentally physical issue. When some people say that “we only have to invest more,” they are denying the fact that we live on a sphere where we started to find oil when it was coming up under our feet and now we’re talking about going to the Arctic. Most producers haven’t made any money from “tight oil.” The large majority of tight-oil operators have been there from start to finish without generating any cash flow.

The majors would not get out of oil for ethical reasons, if they even wanted to. In its 2020 report, the IEA made a tragically clarifying statement. It said that oil companies may be losing their appetite faster than consumers. That means that we are at the end of easy oil. For oil companies, it is a fact of life — an old one — that fetching the marginal barrel is getting more and more expensive and risky. It has nothing to do with ethics or the climate.

Royal Dutch Shell stopped production in Arctic; not because they had ethical or environmental scruples, but because they had a multibillion-dollar rig that was wrecked on the coast of Alaska during an autumn storm. That’s the end of easy oil. You make a $2 billion investment to send an oil rig above the North Slope, north of Prudhoe Bay, and it smashes into the coast.

Unfortunately, in France, being for or against nuclear power has become a left-right issue. This is really a defeat for clear thinking. It is important to underline that political ecology, which for me is fundamentally of the Left, needs to champion scientific rigor. Politics must accept the game of rationality. The problem before us is physical and technical — so we must inform ourselves of its practical and technical dimensions, perhaps even before addressing its ethical dimensions.

It is practically impossible, in a developed country, to solve the equation of the exit from fossil fuels without nuclear power. That is a fact. There are excellent reasons to be anti-nuclear, which I fully respect. But you have to draw the rational consequences. That means, if you are tempted to solve this equation without nuclear power, then there are side effects in terms of consumption, in terms of stability of electricity production. There are many hard side effects, and if you don’t recognize that, then you’re not rational, you’re not rising to the tragic challenge that nature is giving you right now.

We need to be clear what we mean by sobriety. An imposed sobriety? Or a considered, deliberate sobriety? Here again, if we think about sobriety, we understand very quickly that it is not the sobriety of each cell of the social organism, it is the sobriety of the organism. This does not mean asking people who don’t have much to tighten their belts. No, it means understanding how the vital organs of the society can function by being much more sober.

It doesn’t mean that every household gets by with less. It means designing technical systems, production systems, energy systems, industrial processing systems, agricultural systems, health systems, and cultural systems that can function and deliver their services in a more sober way.

The metaphor I always use is that oil is the blood of contemporary society. Getting away from oil means not only doing open-heart surgery, but also changing the energy supply networks — and, therefore, changing the functioning and organization of society’s vital organs.