Peak Oil News: A Sobering Road Ahead

Friday, May 20, 2005

A Sobering Road Ahead

Falls Church News-Press

By Tom Whipple

Before speculating about what life in America will be like as we lurch down Hubbert's Peak, theory that costs will skyrocket irreversibly when the ability to extract the world's oil becomes more difficult as supplies exhaust, it is useful to reflect for a minute as to where we are as a society at the pinnacle of our cheap energy consumption.

There are currently 296 million of us in America. Together we consume 20 million barrels of oil a day, or just under 25% of the world oil production of some 84 million barrels per day. As our domestic production peaked 35 years ago, we now import 11 million barrels of oil and oil products a day.

Some 70% of our oil consumption goes for transportation, while the rest goes for heating, power generation, or as the raw material for a myriad of industrial products from plastics to fertilizer.

When the slide down Hubbert's Peak starts, be it this year or five years from now, the experts agree, that annual decline in production will be between three and five percent each year. This means that if world production peaks around the current 84 million barrels per day, by 2030 it will be down to 30 million barrels per day and falling.

If America's share remains at 25% of world consumption, a problematic assumption, then we will have the use of only seven million barrels per day or less compared to the current 20 million. Clearly there are some big changes accompanied by the hard times ahead and a lot of choices will have to be made.

In the most general terms, the effect of peak oil on America (and other western economies) will be:

• Financial turmoil and recurring recessions.

• Increased unemployment.

• Bankrupt companies.

• Collapse in investments (stocks, pension funds, housing).

• Major increases in the cost of transportation (especially air travel).

• Increasing costs for energy, food, and nearly everything else.

• Major changes in the American lifestyle, including a decline of suburban living, shopping malls, cheap travel, and any other automobile dependent activities.

During the decline in oil production, which will take some 30 to 50 years, oil prices will fluctuate as higher and higher prices lead to recessions that will lead to lower demand and lower prices. These lower prices will continue as the ever-falling supply drops below the new lower demand and the cycle will repeat.

America's basic tenets — life, liberty, and the pursuit of happiness — will be on the table in the coming decades.

As fertilizer usage declines and the cost of mechanized farming and transport grows many fold, our agriculture and food-processing industry will not be able provide the variety and distribution of foods to which we have become accustomed. On average the food currently on an American table has been transported some 1,500 miles. On a world scale, with heavy constraints on fertilization and irrigation, there simply will not be enough food to support the 6.4 billion people currently on earth.

Heating and cooling of our homes will become an increasing problem. Given a bad winter or two and some of us are not going to make it. The rest will be far less comfortable. Universal air conditioning will surely become prohibitively expensive in the near future.

In the midst of 50 years of economic turmoil, our civil liberties are sure to be sorely tried as gap between the energy haves and the energy have nots grows. Civil unrest reminiscent of our urban riots of a generation ago or perhaps the civil war draft riots and the accompanying reaction are all likely to occur.

The happiness achieved by owning a McMansion in the suburbs and a pair of BMWs will have to fade from the American dream. Any kind of food, a job, and a warm place for your family to sleep will become the new pursuit. Life will ultimately become much slower and by definition sustainable.

Other likely developments include a decline of the global economy. It will simply cost too much to make stuff in China and haul it 6,000 miles to a Walmart.

An increasing proportion of the remaining oil in the world will have to be devoted to food production, which in turn will be local farming as it will simply cost too much to haul food for any distances. Lower food production and transport will be a disaster for third world counties dependent on high US food production.

U.S. global influence will shrink, as there will not be sufficient energy to support military forces around the world. The role of the dollar in the world's economy will decline, as will be ability of the US to export food.

Houston, we are entering a gigantic paradigm shift!


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