Of all the problems we face in the coming years – climate change, bird flu, nuclear proliferation – there is one crisis that, until very recently, has been given almost no publicity at all. It is a subject that will increasingly be of critical importance to industrial societies: the imminent worldwide production peak of oil and gas.

As a former petroleum geophysicist, I have an interest in this subject for scientific as well as social reasons. The available literature leaves me in no doubt that the impact of these production peaks on our society is greater than that of any single event mankind has faced in its history. To some, this might sound like an extreme, even a crank, statement. The evidence, however, suggests that the problem is all too real.

It is well known that reserves of oil and gas are finite, and that we are depleting them at an ever-increasing rate. The size of these reserves is difficult to estimate with any great certainty, but a consensus is building among experienced geologists and petroleum engineers that the worldwide peak in oil production will occur between now and 2015. Gas is predicted to peak a few years later.

When one examines the implications of this information, the seriousness of our predicament becomes clear. Economic growth in industrialised nations relies on an ever-increasing production of fossil fuels. Efficiency gains, while providing some respite, cannot compensate for an inexorable drop in production. Once the peak is reached, a gap will open between supply and demand, which will tip the industrialised world into a recession.

Unlike previous oil-based recessions, which were caused by shortages resulting from political events, this time the problem is imposed by nature. We will no longer have the luxury of simply increasing the supply. Supplies are now almost at full capacity, and existing fields are in severe decline. Almost all major oil reservoirs are now in terminal decline, and new discoveries are becoming smaller and harder to exploit.

The dispute over gas prices between Russia and Ukraine in January 2006 highlighted the risk of being reliant on energy imports. Most substantial reservoirs of oil and gas are in unstable countries and even minor events can have a major effect on prices. Further conflict or instabilities in the Middle East could have a very serious effect on world prices.

For the first time in history, there is no immediately exploitable source of energy that can match the energy density of our current supply. Our society has been built around cheap fossil fuels: heating, lighting, agriculture, water, transportation, and all the products that we buy and use are derived from declining and irreplaceable resources.

The result will be large social upheaval and possibly an escalation of resource wars to secure the remaining dwindling supplies, which are primarily in the Middle East. Such energy-intensive wars would ultimately benefit nobody. The upcoming energy transition (or the "Long Emergency", as author James Howard Kunstler so vividly refers to it) will be a greatly unsettling and dangerous period. However, even though it is too late to prevent serious upheaval, there are still many steps that we can take now that could mitigate its effects.

The first step we need to take as a nation is to be informed about the severity of the problem facing us. Few people seem to be aware of the peak in oil and gas production. Of those who are aware of it, most don't seem to realise how soon this will occur and what its implications are for the way we live.

Politicians need to be taking the lead on this issue. They need to understand the problem and inform the public that we will need to make a lot of difficult and radical adjustments to our society and lifestyles. This goes against the impulse of governments, who would rather provide the public with good news and brush the bad news under the carpet. This is partly what has made the crisis more serious than it needed to have been.

I think that the public, if provided with the facts about oil and gas depletion, would accept radical policies to help us through the turbulence of the energy transition. At the bare minimum, these policies might include the following:

• A year-on-year reduction in fossil fuel imports to match the current World Depletion Rate, deducting any indigenous production. This is a crucial part of the Depletion Protocol.
  
  
• Introduction of a carbon ration, to which each individual is apportioned an equal share of the total national carbon emissions budget. The national carbon budget would then be reduced each year, with the aim of reducing the global CO₂ concentrations to an agreed level (e.g. 450 ppm) by a fixed date such as 2030. This is the essence of the "contraction and convergence" (C&C) framework. C&C can be implemented via a system of tradeable energy quotas (TEQs), which would permit the trading of carbon emissions quotas in the same way as any commodity. TEQs have been championed in Parliament by Colin Challen MP under a 10-minute rule bill.
  
  
• Begin immediate and very substantial efforts to increase renewable energy production such as wind and solar, and increase research funding for nascent technologies such as wave power. These efforts should include large increases in the grants available to those individuals and organisations wishing to produce their own renewable energy. Local energy production, rather than a large-scale grid, is the only realistic future for the provision of domestic power in the future. The money needed for these projects would have to be greater than that ploughed into all previous energy ventures, including nuclear.
  
  
• Increase taxation on petroleum and diesel transportation, and use the resulting tax revenues to subsidise public transport, preferably using low-carbon vehicles (Sweden is already trialling such public vehicles). Taxation should also be much more dependent on the amount of pollution produced. A variation of this has recently been proposed by London Mayor Ken Livingstone.
  
  
• Introduce taxation on aircraft kerosene fuel and on the purchase of new aircraft. In the long term, the airline industry will inevitably decline because there is no alternative fuel on which the current fleet can fly. It is better that we manage the collapse gracefully, rather than waiting for it to collapse abruptly and messily. Airline tickets could also be much more heavily taxed. Projects such as the new runway for Heathrow, inexplicably given approval recently by the government, should be abandoned.
  
  
• Drastically reduce or eliminate subsidies to farmers who use ammonia-based fertilisers, which are produced from fossil fuels. These subsidies could be transferred to organic farmers, in particular those who provide food for local consumption. In addition, supermarkets could be forced to limit their food miles by selling a minimum level of food produced within a specified catchment area.
  
  
• A Government commitment to creating a zero-growth economy as a prerequisite to preserving fossil fuels, which will be needed to restructure our entire economy for a low-carbon future. Endless growth is unsustainable and must be abandoned as soon as possible.

The UK Government favours building more nuclear power stations to provide electricity in the future. However, this will be enormously costly and the problems of waste disposal remain unsolved. In addition, the energy required to build the plants, keep them safe, dispose of the waste, mine the uranium, and decommission the plants, means that nuclear power does not have a high energy yield. (By comparison, some renewables can offer much greater net energy yield.) If the industrialised world were to generate most of its electricity from nuclear power, uranium deposits would be exhausted in a few decades.

Other proposed energy substitutes have included:

• Hydrogen, which consumes more energy in its production than it releases, and is really only useful for energy storage purposes.
  
  
• Coal with CO₂ sequestration, which could not provide for all of our varying energy needs. CO₂ sequestration has only been attempted in a few experimental reservoirs and there are concerns about storing enormous quantities of CO₂ in subsurface reservoirs. Not least, the process is energy intensive and so will deplete world coal reserves even faster.
  
  
• Nuclear fusion, which is at least 50 years away from commercial production.

In anticipation of a global decline in fossil fuel production, the Swedish government has recently announced that the country will eliminate fossil fuel usage by 2020. This is a target every country should be aiming for.

The subject of peak oil and gas is disturbing, but we cannot afford to shy away from it. Contrary to the opinions of a small number of maverick economists, physical resource limits are a reality, and cannot be wished away by blind faith in the power of the markets.