I recently added a peak-oil blog, The Oil Drum, to my blogroll, have been following the issue for a while, and just came back from a lecture at Stanford presenting contrasting views on the issue. I think there are really 3 questions on peak oil and global warming:
1. Is peak oil a real issue?
2. If it is, what effect will it have on efforts to control global warming?
3. What effect will global warming policies (and other enviro policies) have on efforts to overcome peak oil issues?
You'll wonder why I'm wasting your time with this post when I have no real answers to these questions, but I do have speculations, which is more than good enough for blogging work.
Question #1 was the focus of tonight's lecture, and I felt the speakers were talking past each other. One focused on the limited availability of a finite resource, and the other spoke of the ability of markets and technology to find substitutions. I don't think history is all that kind to the "Ohmigod we're all going to die"-type predictions, so I think the oil optimists have an edge on that part of the spectrum. On the other hand, history has given us two oil shocks in the 1970s, so I don't see why that can't be repeated, especially given oil concentration in the hands of cartels in unstable regions. Also, free markets are screwed up by bad information, and there's reason to believe that the information coming from Saudi Arabia and maybe other countries has exaggerated reserves. That would depress prices relative to the theoretical price that markets would have established given future shortages, meaning prices would be in for a shock when the correct information comes out.
So, some troubles ahead, I think.
Question #2 gets some attention (see here and here). Peak oil could provoke an oil drilling craze - bad for the environment, but an overall neutral effect on AGW as compared to a world without a peak oil problem. But, peak oil could also bring tar sands and oil shale into production, and those suckers have to be heated to get oil. If you don't sequester the carbon released during heating - and I don't know how you would for shale being heated underground - then you have a net problem. And then there's substituting coal for oil - if you don't sequester it, you have a huge problem. And if prices are high already, there will be less political willpower to require sequestration for any of these alternatives.
Balancing against all that is the possibility that peak oil will jumpstart climate-friendly technologies a decade or two before we would otherwise get serious about doing something to reduce CO2 emissions.
So, you got me on this one. Looking back again at history, the 70s oil shocks helped alternative energy technologies while doing nothing for tar sands, shale, or coal gasification (don't know what effect it had on coal generally - probably a bad one in switching power plants from oil to coal). My guess is a possible net benefit to global warming, while a net negative to the environment overall.
Question #3 gets the least attention, I think. It says that maintaining our present lifestyle through other means (like coal gasification) won't work for completely different reasons. It will also impose additional costs for carbon sequestration, which could be hard for the world to absorb with peak oil shocks hitting it. If we ever become serious about stopping climate change, and also have to deal with peak oil at the same time, the transitional costs will be huge.
If we get serious about global warming first, that would be a great help in dealing with peak oil. Too bad it's not likely that we'll get serious about warming soon, though.