zahntech said:
Sounds like a bit of the "chicken little complex" to me, from the research I have seen there are billions of barrels of oil yet to be pumped from the earth but the oil providers (nations/oil companys) are limiting the production as to inflate the cost to us and profits for them, I am not yet storing up gas like Mad Max but I am buying stock in Exxon-mobil,Shell,ect ect :smile:
Your misperception in this regard is a common one. There are hundreds of billions, even trillions of barrels in the ground. This is not the issue.
The issue is that, in each and every year, we expect our economy to grow. GDP "growth" is what matters. If we don't have growth, we have a recession, when GDP shrinks. GDP is tied to energy production. In fact, there's a recent article in the Washington Pest about Chinese energy inefficiency which expressed $1M of additional GDP in various rates of energy consumption. Each additional unit of GDP requires *some* amount of additional energy. It keeps the lights on, powers the machines, keeps the conveyor belts moving.
So, to continue to grow our economy, we need to continue to grow our energy supply. Our supply must grow each and every year as compared to the last year. This is what our population has done and our GDP has done. And, everything and everyone needs power.
Our solution thus far has been to just pump more oil this year than last year. And, for about 120yrs or however long we've been pumping this stuff, that has worked just fine. Oil supply has increased every year as compared to the year before.
So, we plan to continue to do what we've always done. However, physics has played a cruel trick on us. Perpetual exponential growth is impossible. Insofar as oil supply is concerned, at some point, every well, every nation, and the world as a whole, achieves a peak supply rate. This is the point at which oil is being pumped out at its peak level. After this, Peak Oil, the supply rate achievable begins to decline. More net oil CANNOT be pumped out next year, at any price.
This condition was first posulated by a guy called M. King Hubbert, who was a geologist and engineer. Sadly, he was roundly laughed at and pilloried by economists and other people who think they're smarter than engineers. Hubbert predicted the US would achieve Peak Oil in the early 1970s, and he did so in the 1950s. And, everyone laughed. Haha, dumbass. And, then, in 1970, the USA did exactly that, hit Peak Oil. We all know what followed. Hyperinflation (for the USA anyway) as Nixon decoupled the dollar from gold, economic recession, the collapse of very large US industrial interests, etc. I.e., life changed. At about 1988 or 1989, the USSR hit Peak Oil as well. What happened to the USSR afterwards is well-known. Within a short span of time, their entire societal model collapsed and they no longer exist. In fact, the reason why Chernobyl happened was because the USSR was recklessly nuclearizing in response to surprise Peak Oil-caused energy shortage. Once their hasty reactor exploded, they could no longer politically sustain deployment of reactors and could not meet power needs. Everything fell the hell apart rapidly.
The point of this is that Peak Oil is a significant issue for the world and it's coming up within the next 5 or so years. And, it has nothing to do with how much oil is still in the ground. When the USA hit Peak in 1970, we still had hundreds of billions of barrels still in the ground. And, we are still pumping them. We pumped over 7 million barrels per day last year and were the world's #1 oil producer as recently as like 2001. In 1970, we peaked at beyond 10mbpd...now, we've lost about 34% of our production rate capacity and we continue to decline.
Peak is a real phenomenon. Predictions of apocalypse as a result are just speculation. Nobody really knows what will happen. Much depends upon the slope of the other side of the supply curve. The steeper it is, the worse things will be, up to and including mass starvation and whatnot. If it's shallow enough and we can divert war resources and stuff like that, money paid to old people to be old, and find great efficiency gains, we can do a lot to soften the downslide. But, stagflation occurs anyway. Without an increase in energy every year, we cannot grow GDP as an ongoing proposition.
So why all the commotion about gasoline prices?
Obviously not. Sorry Lud, just calling it like it is.
