Peak Oil
This subject is set to be on the political and social agenda in a large way by the end of this decade, and its impacts will be fealt throught the rest of this century and beyond.
To tell you about it fully I need to cover several Topics.
Economic Growth
Increasing Consumption
Oil History and Discovery
Uses Of Oil
Peak In Production
Effects
[Flash Guide]
Economic Growth
The Modern economy of any country and the world as a whole rely on growth in that economy. Businesses require economic growth to make profits on the capital investments they make so that they can repay the loans they took out for the capital in the first place. The same is true of any government, or individual on their scale. An economy that is not growing is in recession.
Economic growth requires ever increasing production and consumption of goods and services. We need to consume more next year than we did this year for the economy to have grown.
In the 1970's a group called "the Club Of Rome" (www.clubofrome.org) put forward a theory that in a world of finite resources, our population and the consumption of that population could not continue to grow indefinately. At the time it was rather high profile but as the years went by and the global economy grew unhindered the world began to forget about this theory, because it was a doomsday warning that hadn't imediately come to fruition.
Increasing Consumption
Today, the worlds population of 6.3 billion people use more resources, eat more food, and use more energy than ever before. Infact, a boom in our production of food has allowed the population growth witnessed in the last half a century. Modern farming techniques using machinery, fertilizers and pesticides have all helped feed a growing global population.
However, almost all of the modern farming techniques require Oil to make fertilizers, pesticides and fuel the farm machinery we use.
With a growing world population and a growing global economy we rely on consuming more resources and using more energy every year than the next. In 2005 we used an average of 85 million barrels a day of oil. The year before we used an average of 82.6 million barrels per day, and the year before that, 79 mbpd.
Oil consumption globally is predicted to rise 2% a year for the forseable future, and by 2030, global consumption is set to be 120 million barrels per day.
Oil History and Discovery
The first Comercial Oil well was drilled in in 1859 in Pennsylvania in the USA. They originally drilled for oil there because some of it had come to the surface as oil seeps in the region. As time and technology has advanced, petroleum geologists can now use advanced siesmic techniques and knowledge of the conditions for creating oil to map where in the world oil is likely to be found.
In the US more oil was discovered in the 1930's than any other decade. and in the world, more oil was discovered in the 1960's than any other decade.
Many more oil fields are still being found today but they are relatively small fields and they are generally discovered in areas that were already know to be oil rich regions. They are just the smaller fields around the edges of the larger already known fields.
Uses Of Oil
Oil is used directly as a fuel and as a feedstock to thousands of industries.
Oil is used for 40% of the worlds energy generation, and powers 95% of global transport. Oil is used to make almost every fertilizer and pesticide used in modern farming. Oil is used to make TV's, Medicines, wire isulation, computers, DVD's, toothbrushes, modern detergents etc. etc.
The list is endless. Pretty much everything we take for granted today is created using oil somewhere along the line. Modern western society cannot function without cheap and plentiful oil.
Peak In Production
More and more insiders of the energy and oil industry are now coming out and trying to highlight the dangers to the world of not asking the right question about oil.
The question is not "when will we run out" but "when will production peak".
In 1956 a Petroleum geologist named M. King Hubbert Predicted that Oil production in the Lower 48 states of the USA would peak in 1970. Most of the oil industry laughed at him at the time. By 1970 his career was in ruins. By 1975 he was once again revered. By the mid 70's it had become apparent that US production of oil had infact peaked in 1971 and after that fallen.
What Hubbert observed is that production of oil at any one field followed a bell curve with production increasing to a peak and falling away after that. What he theorised was that you could add the cumulative production of all the oil fields in a region and get a peak in production of that region, roughly 40 odd years after that regions peak in discoveries.
Hubbert originally predicted a global peak in production in the mid 1990's. But in the 1970's the Oil Shocks caused by the Middle East and OPEC cutting its production meant that the world lowered its consumption of oil temporarliy as it tried to implement conservation techniques.
After the 1970's Oil shocks effect on the global economy and subseqeunt temporary drop in production of Oil Hubbert revised his prediction of a global peak in prodcution in 2000. M King Hubbert died on October 11th 1989.
Many people now coming forward with predictions of an imminent global peak in production have updated and revised Hubbert's models and recalculated their predictions.
The Association for the Study of Peak Oil and Gas [ASPO](www.peakoil.net) are an independent organisation trying to raise awareness of the issue of a peak in production in Oil. They are a group of retired Oil industry worker, University Professors, Petroleum Geologists, Economists and many more. They recently revised their model and it now shows a peak in production in 2008 rather than 2010.
Many other estimates exists for the the peak in production of Oil, ranging from the years 2000 to 2020, with the smart money being on before the end of this decade.
However, much like in America in the 1970's, most think we will not know about the peak date for certain until a few years after the fact.
Effects
The Effects of a peak in production of oil are nothing short of the end of western civilisation unless we are prepared. And we have precious little time.
Post a Peak in Oil production Oil prices are going to soar, as demand for the resource outstrips supply. Any economist will tell you what happens to the price of a comodity when demand surpasses supply.
With Oil at double the price it is today, the global economy will go into recession. With oil at 4 times the price, and no sign of change, as there is no more production to come to the rescue, we face a long and painful global depression with less energy and less economic activity.
Everything will cost vastly more to make and transport and the structures we have in society today will fail to function or be of use.
Food production will drop off dramatically unless governments step in to ration oil supplies to agriculture.
Millions of people across the globe will become unemployed.
We need alternative energy supplies to come online now to take over from Oil as a power source so we can ration our remaining oil for agriculture to continue to feed our populations.
Very soon we will see that the oil age is over.
I urge you to not take my word for this but to look this up yourself. Search for "peak oil" on any search engine and read.
Work out for yourself what plans you need to make for your future, and your families.