Friday 7 May 2004

The Next Oil Crisis

After reading about the wind power debate, I started reading about the upcoming oil crisis (or peak oil). There are lots of good articles around but this one sums it up nicely.

Truly it's amazing that given our civillisation is so heavily dependent on oil that we are so woefully unprepared to face up to the challenges of it running out. Sure there's debate about exactly when but we can all agree that it will run out. Some believe that this is the year we get to the Hubbert Peak while others put it out a few more years.  If you're middle-aged, you'll probably live long enough to see the pump run dry.

Just think about that.

The world economy, our cities and lifestyle are all based around transportation and distribution. And that's all based on cheap oil. And we depend heavily on oil-based products like plastics and other petrochemicals. But the topic really isn't up for discussion except by doom sayers. There's no quick technology fix either. For example, switching to electric cars would require the national grid to quadruple.

Shouldn't this be discussed as urgently as global warming? The transition out of the oil age isn't exactly going to be easy.

In the meantime you can watch and plan on the price of oil to slowly soar. It's now just reaching $40 a barrel but we can probably get another blissful decade living with it. The sooner it rises the better since it's the only way the issue will get serious attention but it's going to cause some serious economic and political turmoil.



    "In any case, he said, Opec members were already pumping 85-95% of capacity."

    Opec should not raise supply; the West needs to reduce demand. Unfortunately, you can't ask China and India to stop developing.


    Gary Ross, of New York's PIRA energy consultancy added: "At the end of the day Saudi Arabia is the only country with significant spare capacity and they are not going to be constrained by others with none."

    "With the country controlling 30% of the world's proven reserves, Saudi cannot afford to let runaway oil prices to harm long term fuel demand and give an incentive to invest in alternative energy sources."

    I highly doubt Saudi Arabia needs to worry about that.

  3. Wouldn't it be a good terrorist tactic to try and increase the price of oil? That would have the greatest impact on Western economies and cause political unrest.

  4. Low cost airlines will feel the pinch first