What is Peak Oil?
Peak oil refers to the point at which increasing
global demand meets declining oil production. It's a bell shaped curve,
each in opposite directions and X marks the spot where our lives will
change forever. Many experts believe this has already occurred and many
others believe that point is very near. It is the view of the author
that we have experienced the "peak of cheap oil" and while shale
drilling may keep supplies up for another couple of decades, we are
moving into an era of ever increasing oil prices unless world demand
slows for some unforeseen reason.
The term "peak oil" was first used in 1956 by a Shell
Oil Company geologist named
King Hubbert. who proposed that oil production
in the United States faced an irreversible peak. Such a peak did indeed
occur in the 1970's, within an year of his prediction and we have since
gone from the world's largest oil exporter to the largest importer.
Despite a recent uptick in US oil production, long term reserves won't
be enough to keep up with demand. Hubbert predicted the world as a whole would see peak oil happening
somewhere in the 1990's but what threw his prediction off a few years
was the huge drop in U.S. consumption due to the Arab oil embargo in the
1970' and a temporary switch to smaller cars.
"Peak Oil" or the peak and decline of world oil
production, is not some crackpot theory, but one that a number of
prominent scientists, geologists and even oil company executives like T.
Boon Pickens believe is happening right now or very soon. From the time
of the peak onward, things that we take for granted will change
The major news headlines of the times
almost universally relate in some way to peak oil. Whether it is war in
the Middle East or Wall Street crashing, the high price of energy is a
part of it. This site is dedicated to finding and disseminating those
news stores about peak oil that shed light on how serious the problem
We Eat Oil, Literally
Oil and natural gas give all of us a quality of life
far beyond that of any other humans that have ever lived on planet
earth. We literally eat oil, every day. A calorie is a unit of energy
and of the food calories that we eat, ten or more calories of petroleum
based energy was needed to produce only one of the many calories we eat
daily. Oil powers the tractors that plow the fields, and makes the
fertilizers and chemicals today's crops require. It transports those
same farm products to factories where they are processed using oil and
wraps them in oil based plastic to be kept in supermarkets cooled with
petroleum energy for shoppers who drive to get their food in gas
guzzling cars and take it home to cook over a petroleum flame. How will
we produce as much food without oil?
Relatively cheap foreign oil has allowed us to build
homes far from our workplaces and to heat and cool ever larger homes
cheaply. Now a slowing economy which was propelled in part by the
premise of cheap energy and easy credit is threatening to spiral into a
worldwide depression as the dual whammy of the mortgage crisis and high
energy prices devastate our economy.
Even as markets crash and jobs are lost or downsized
the burden of high gas, diesel and heating oil prices continue to
contribute to the misery.
Before peak oil occurred we took for granted travel
to faraway places. Now the headlines are filled with stories of airlines
and cruise ship companies going bankrupt since they cannot afford the
high cost of fuel. The way we think about vacations and business travel
may be about to change forever.
There are many that argue that there is still a good
quantity of oil remaining in the earth's crust. They are partly right,
however the portion of that which is easily recoverable has mostly been
discovered. New discoveries in deep water, such as in Brazil and the tar
sands of Canada require that oil prices be over $100 for recovery to be
economically feasible. It's not about the quantity of oil that remains,
It's about how much the remaining oil will cost to be recovered and if
we can afford it without loosing all that we have become accustomed to.
Just as a person dying of dehydration still has a
large amount of H2O still in their body we still have a large quantity
of oil remaining. It is the massive volume of oil and natural gas that
the world's economy needs at a certain price that matters. The world
economy is beginning to suffer from "oil dehydration." as it becomes
more and more expensive due to high recovery costs of the remaining
deepwater and tar sand deposits.
No Easy Options Or Alternatives To Oil
It may be possible to replace petroleum products such
as gasoline and diesel with new vehicle fuels such as hydrogen but we
are far behind in beginning any such transition. Also, hydrogen does
not make itself, it takes large amounts of energy to crack it from H2O.
Promising technologies such as algal bio-diesel are still in the
laboratory stage and years away from production.
There are no easy options for replacing oil based
energy. There is simply not enough uranium left to fuel the many nuclear
power plants that would need to be built and even if a crash course in
plant building was started today it would take decades to build enough
nuclear plants to replace a fraction of oil derived energy. Not to
mention the fact that Uranium is mined and transported using large
amounts of diesel fuel which is increasing in cost.
Wind power is a valuable addition to the energy mix
but to produce the amount of turbines we need to replace oil will
require billions of barrels of oil to produce fiberglass resins used in
blades, transport turbines and smelt the steel and aluminum used in the
towers and transmission lines.
What many "doomers" or peak oil doomsday theorists
predict is a massive global famine and die off as oil becomes too
expensive to keep up world food production at current rates. We are
barely producing enough food to supply the world (with ten calories of
oil energy used for every one calorie of food energy produced). What
will happen when energy costs increase fourfold, fivefold or even
tenfold in the coming years? Will peak oil mean global famine?
Why Peak Oil Isn't Headline News
The corporations and politicians that control our
media have a lot riding on keeping the subject of peak oil from going
mainstream. Just look at who owns the outlets we get our news from. Fox
News in owned in part by a Saudi Prince and a UAE holding company,
and CBS is owned by companies such as GE and Westinghouse which have a
large stake in the oil industry. Our entire false economy, and their
share prices are built on the premise of unlimited growth and cheap oil.
Our stock market and retirement plans depend on increased growth and if
peak oil is really happening it means that our financial house of cards
is going to fall. Our economy is 100% built on the back of cheap oil and
stock values would plummet if the truth about oil depletion was made
public. Even the leaders of oil rich countries such as Saudi Arabia must
now keep figures about their oil reserves secret lest their own citizens
revolt when they find there is no future. (Read Matt Simmon's Book
Twilight In The Desert"). As oilfields such as the Gwahar field in Saudi
Arabia and Mexico's Cantarell field deplete rapidly the truth is finally
Despite the importance that oil has in our lives it
only makes headlines when it is extremely expensive. Our economy was
built on the prospect of oil remaining cheap forever. Despite recent
drops, would you have called the current price per gallon cheap four
Can't We Just "Drill Baby Drill"?
I'm not sure where the catchphrase "drill baby drill"
came from but it is being parroted more and more these days as the
solution to all of our problems. Even if we allowed drilling to begin in
all the sensitive environmental areas such as ANWR and in coastal areas
it would take years for any of that oil to reach the market. According
to many experts we would see only a fifty cent decrease in the cost of
gasoline even then. The Arctic National Wildlife Reserve holds only one
years worth of oil at current consumption rates. Offshore drilling is
extremely expensive. For many areas, such as deep Gulf Of Mexico and the
Petrobras salt dome area off of Brazil, oil needs to be in the $100 a
barrel range just to make drilling profitable. Offshore drilling doesn't
mean cheap oil. In fact deep offshore drilling NEEDS high oil prices to
be viable. If we use 25% of the world's oil and have just 2-3% of it
here the math doesn't work out. The solution is not to "drill baby
drill" but how to move away from oil if it is not already too late.
Peak Oil And Our Modern Day Easter Island
Stone Statues On Easter Island.
Mall Of America, Minneapolis Stretch Hummer, 4 Miles Per Gallon
If we wait much longer we may find ourselves in the
same position as many anthropologists believe that the inhabitants of
Easter Island were once in.
The islanders spent generations building stone
monuments to worship, cutting down all of their forests in the process
to use as rollers to move the stones. When the land became barren and
their resources were all used up they had no lumber with which to build
rafts and leave the barren island and most of them starved to death or
were killed fighting each other for food.
In the same way, our civilization has spent decades
building a society completely based on the false premise unlimited
growth. Many of us, "the islanders" failed to question our leaders
about how many shopping malls, Hummers and multi thousand square feet
homes our society really needed and why we weren't spending our energy
and money building a strong, energy independent infrastructure for our
The energy we expended building such a false economy
should have instead been spent on renewable, clean energy in case oil
ever ran out. If that had happened It is doubtful that we would be
involved in the current costly overseas wars. The very people we are now
fighting would not have had any money to attack us with if we had never
sent them so much of ours.
If we had our own source of domestic renewable energy
would places like glittering Dubai, or Saddam's former palaces have
existed? While Ronald Reagan was responsible for some good things, like
the fall of the Soviet Union, he also set us upon a path of oil
dependence. The week after he took office he had the solar panels and
wind power ripped off of the roof of the White House and slashed the
budgets of most government energy research and incentive programs while
making long term deals with dictators in countries that would
eventually rise to challenge us like Iraq. The same doctrine of
dependence on cheap Middle East Oil continued right on through to the
There was simply too much easy money to be made
overseas by U.S. oil companies who have had Washington in their back
pocket for so long. Because of our government's policies the domestic
oil industry all but shut down in the 1980's as we made deals with the
Saudi's and opened the floodgates of cheap OPEC oil. Thousands of hard
working oilfield workers lost their jobs.
The solar and wind industries all but died. Now we
have to import wind turbines from the largest manufacturer, Vestas, in
of all places, Denmark which has had a strong renewable energy program
all along! Behind closed doors the big multinational companies like
Exxon are scared straight. They have been kicked out of country after
country as those nations nationalized oilfields and they are running out
of new places to drill. They know peak oil is a reality and hire consultants like
CERA, the Cambridge Energy Research Associates to come up with figures
that "prove" that peak oil is years away. The insiders of those
companies know that the times of big profits are coming to an end but
they can't let shareholders know or the house of cards, and stock prices
will eventually plunge.
Because of this lack of action may well have
squandered the time needed to transition to a non oil based economy.
Politicians promise "energy independence". Can we really afford a
massive crash spending plan now after the
massive mortgage bailout? Will we shelve all of the alternative energy
plans if oil stays "cheap" for a few months and be in the same situation
again when it skyrockets back with the rebounding economy? And so here
we all are, at a crossroads at which critical decisions need to be made
to save us from peak oil and yet we are still distracted by pop
culture, reality TV and other diversions, believing life as usual will
continue on. Those paying attention and preparing will be the ones to
survive the upheaval brought on by peak oil in the end.
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