Oh, no! Has the world reached 'peak oil'?
$60-per-barrel oil is still affordable by western standards, but surely debilitating for growing economies. More so for the Philippines which imports all its oil. Adjusting for inflation, $60 would still be three-fourths of the peak in 1980, when the oil crunch thrust the world into recession.
But what if it hits $80 again, or even $100 by estimates of pessimists? The shock would lead to mass layoffs. Companies would shut down. Lights will go out. The elderly would die of cold up north and heat in the equator. To be hit worst are the poor, for food prices would fly with inflation.
That scenario has long been mulled in at least three books on a phenomenon called "peak oil." Simply put, peak oil is the stage when world oil production hits its peak while demand continues to surge. At that point, pump prices would soar sky-high.
The authors believe peak oil is inevitable. Oil is a finite commodity. It will surely run out, sooner or later. Truth is, the discovery of oil already peaked in the '0s. The new finds in Russia were at first billed to be almost as vast as Saudi Arabia's, the world's largest reserve. But now analysts are doubtful. The tar belt in Venezuela's eastern and central grasslands, once tapped, is expected to yield 2.5 million barrels a day of super-heavy crude. But that's a drop in the bucket of present world demand of 82 million bpd. With exploration already having reached its peak, the next to peak will be production. Peak oil theorists say that the production curve will take the shape of a bell, with stocks declining after oil producers have mined half of their reserves.