Colin Campbell, on the Depletion Protocol

“It is obvious that the transition to declining oil supply will be a time of great international tension as consumers vie with each other for access to oil, and as oil prices soar, when capacity limits are breached. Normal market forces are ill-adapted to deal with this situation as the high prices represent profiteering from shortage by oil companies and producing governments as the cost of production does not rise materially. A strong case can therefore be made for managing the situation by government intervention through a depletion protocol.

In outline, such a protocol would require producers to limit production to their current depletion rate, namely annual production as a percentage of what remains, which is a small burden insofar than few can exceed this limit anyway. More important, it would require importers to limit their imports to match world depletion rate. This would have the effect of moderating world prices so as to put them in better relationship with actual cost preventing profiteering and the massive destabilizing financial flows that threaten the financial system. In humanitarian terms, moderating world prices would allow poor countries to afford their minimal needs.

The importing countries observing the protocol could manage their obligations in different ways as suited their environments, having strong incentives to cut waste, improve efficiency and bring in renewable energies to the extent possible. The mechanisms could include a combination of basic rationing, special tax treatment and normal market practices. Importing countries might decide to licence imports demanding to know the origin of the imports and imposing the right to audit the reserves of the fields concerned in order to determine the security of future supply.

If countries were to dedicate efforts to determine what the world depletion rate was, establishing the appropriate scientific procedures, the need for action would likely soon become self-evident. 

Although desirable, complete compliance by all countries is not essential, as the countries that did adopt the principles of the Protocol would soon find themselves at a considerable advantage over those that continued to live in the past. Detailed negotiations are called for to settle matters of definition and the treatment of heavy oils and special situations, as well as providing for the equitable treatment of commercial interests. It might also be possible to integrate the procedures with current efforts to meet the threat o f climate change attributed to emissions from fossil fuels, including oil and gas. The time to act is now, before the impact of depletion bites in earnest.”