I first published this about 1/2 a year ago. Peak oil theory is looking even better now than it did back then. Enjoy.
Many of you do not need a primer on peak-oil. I am sure those of you who do not, however, would agree that most people do. So in order to bring everyone up to speed on the subject, let’s have a brief overview of the phenomenon that is known as peak-oil.
All but a few fringe “scientists” (mostly in Russia) agree that oil is a finite resource. Peak-oil is the point at which we have extracted about half of the earth’s technically recoverable oil. In the 1950’s a petroleum geologist named M. King Hubbard predicted that U.S. oil production would peak in the 1970’s. No one believed him. It is clear now, and has been for decades that the United States was never able to produce more oil than it did in the 1970’s. Hubbard was correct. That is why we (in the U.S.) are now so reliant on what politicians like to call “foreign oil”.
Here’s the rub. The same thing that Hubbard predicted in the U.S. has been predicted and has happened to oil reserves the world over. At some point we will be extracting more oil per day than is physically possible the next day. This is bad since demand is growing. When there is not enough supply to meet demand, we get bidding wars (and other kinds of wars) until some competitors are priced out and supply and demand balance each other again.
When is this going to happen? Maybe you should ask another question. Has this already happened? Take a look at the following chart.
ASPO Estimation of Global Oil Peak
The group of scientists who created the model that spit out the chart above have the peak estimated sometime around your lunch hour last Tuesday. There are other estimates….but most of the serious folks agree that we will not know for sure until it is in the rear view mirror AND it is already upon us or will be very soon.
Have a look at the next chart. For many decades we discovered more oil than we used worldwide. Since the 1980’s, however, we have used more oil than we have discovered, year on year. As you can see each year we use more and more and find less and less.
Oil Found vs. Oil Used (World)
Why should I care about this?
Obviously, if I am giving you a primer on the basics of peak-oil I plan to discuss it further down the road. Why should you not skip all of the boring posts about oil and just check back next week to see if I am talking about something more interesting? Because the world you have been accustomed to was built upon the cheap (yes it's still cheap at $70 a barrel) easy energy of oil. It is estimated that every food calorie an American consumes took 10 calories of fuel to deliver to their plate. You eat oil. A lot of it. A little over 100 years ago oil began being used by the human race and has since invaded everything (transportation, plastics, fertilizers, mass agriculture, etc.). If the scientists predicting peak-oil (and I count myself among them) are correct then your world is about to change...probably for the worse.
Consider one last fact: Like I said about 150 years ago we started using oil. Since then our oil usage rate has expanded exponentially (http://en.wikipedia.org/wiki/Exponential_growth). Guess what! Since humans started keeping records the human population on earth had hovered around 1 billion until about 150 years ago. What has the population growth pattern been like since then? Exponential. In the last 150 years we have gone from around 1 billion to over 6 billion. Connect the dots as you wish. Exponential growth is not sustainable with any finite resource.
Need to know more now and can't wait until my next post on the subject. Rest easy.
http://en.wikipedia.org/wiki/Peak_oil
http://www.lifeaftertheoilcrash.net/
http://globalpublicmedia.com/interviews/615
http://www.energybulletin.net/primer.php
click to enlarge
