Peak Oil

Peak oil is a phrase often used to describe the situation when global oil supplies reach a peak. Following this peak, oil supplies decrease and never rise again. Leading geophysicists predict that peak is either currently occurring, or will have occurred by 2015. Meanwhile, demand for oil continues to increase at an extraordinary rate. The effects of even a small drop in production can be devastating. Source For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. Source The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%.

Peak oil will force us to look at the world differently. We will have to reduce our consumption because prices will force us to and not because of attempts to be green and environmentally friendly. Fossil fuels provide us with an enormous amount of energy, and there are no equally cheap, useful and abundant alternatives. We rely primarily on fossil fuels for our food, our transportation, our heating, our lighting and all our electronic gadgetry. Because of the energy required to produce any good or service, we need energy prices to remain low in order for all other prices to remain low. With oil depletion, energy prices will rise as supply fails to keep up with rampant demand.

Following peak oil the world will enter a new phase. The globalization of production will end with global re-localization replacing it. Industrialism – whether communist or capitalist – will cease to be viable, and consumer-focused societies will become redundant. Suburbia will fail spectacularly as soaring petrol prices make the long distances required to travel between work, home and leisure unviable. The entire economy will change – many people will likely work the land as they did in the past, with ‘own-work’ replacing paid employment across the board.

Oil is a finite resource , in that there is a certain amount of it in the earth, and more will take many millions of years to produce. It is therefore only a question  of when oil will peak and whether or not alternatives are possible. Oil geologists predict a peak before 2015, possibly sooner; scientists are currently failing to find a viable alternative, or even something close. It is quite possible – given the nature of energy – that an alternative does not exist.