Out of Oil? Welcome to the Brave New World.

Unless you’ve been able to avoid the news for the last two years, you’re probably well aware of the fact that the price of crude oil has been on a strong and steady climb.

While there are some economists who claim that the major factors behind the dramatic increase in price are a weak dollar and out of control commodity traders, a vast majority of economists, ecologists and every day people are worried that the real answer is much simpler: we can’t produce enough oil to meet current demand and we’re quickly draining what supplies we have left.

Thanks to the industrialization of the two most populated countries in the world – China and India – the world-wide demand for oil and petroleum based products has soared over the past decade. Unfortunately, since oil is a finite commodity (there’s only so much left in the world, not to mention the fact that there isn’t much, if any, excess refining capacity) this increased demand has done two distinct things:

  1. Driven the price of oil up nearly 75% in the last year alone
  2. Drastically reduced the amount of the world’s remaining supply of oil

While I’m sure there are plenty of very educated people out there who have a pretty good idea how much oil is left, it seems that considering the wide range of time frames being given, it seems that even most people “in the know” are just guessing. So, I figured why not give Daily Fuel Economy Tip readers a chance to guess as well?!?

About a week ago I put up a poll which asked: “When do you think the world will run out of oil?” Well over 200 people responded, and this is what they had to say:

  • 38% said we will run out of oil in more than 100 years
  • 23% said we will run out of oil in less than 25 years
  • 18% said we will run out of oil in 26 to 50 years
  • 13% said we will run out of oil in 51 to 75 years
  • 8% said we will run out of oil in 76 to 100 years

It certainly seems like there’s a pretty good split between those who think we have some time (38% for 100 + years) and those of us who think time is running out (41% for less than 50 years). It seems us common folk can do about as good of a job predicting future oil supplies as the so called “experts.”

Unfortunately, since most of the world’s expansion over the last 50 years can be directly attributed to cheap energy (specifically cheap oil) it really does feel as if we are on the cusp of a Brave New World. Will we experience hyper-inflation on everything from fuel to food? Will things like transcontinental flights be a thing of the past? Will we begin to see a gradual decrease in the world’s population?

I know that many of these questions seem rather absurd, especially when they’re looked at in the context of “the here and now.” However, when taking the long-term view, it’s actually very easy to see the world coming to a grinding halt thanks to a significant decline in the availability of oil. The reason being, less oil will have an enormous trickle-down effect.

Just look at the following examples of what could happen due to higher oil prices:

  • Obviously, the price of most forms of energy will go through the roof. The price of all transportation fuels will skyrocket. In order to help combat these increased costs, people will become more urbanized and things like the suburbs will become a thing of the past.
  • High transportation costs will cause a dramatic trickle-down effect on consumer prices as manufacturers have no choice to pass on the costs to their customers. No consumer product will be safe.
  • Any petroleum based product (plastic anyone?) will undergo significant price increases. Do yourself a favor and try and pick out even one item near you that neither contains plastic nor was produced by anything containing plastic.
  • As oil prices increase, there will be greater emphasis placed on bringing alternative fuels to the market. Right now, it appears our main efforts are being focused on ethanol. As farmers focus more of their efforts on producing ethanol producing plants, the price of these plants, as well as the prices of every other fruit/vegetable/dairy/poultry/beef/pork product will climb exponentially higher.

These likely scenarios just scratch the surface, and don’t even begin to speak to the increased conflict over the world’s remaining oil supplies.

But, so I don’t end this post on such a gloom and doom note, it does appear that there is reason to be thankful for the recent run of gasoline and oil prices, as there now appears to be much more focus on finding cheap, clean and sustainable alternative fuel sources. As these fuels/energies become more mainstream, hopefully they will reduce our demand for oil to the point that we don’t even care how much petroleum is left in the earth.

Comments

  1. I think that through all of these effects us Americans have gone on apocalypse anxiety with oil, food, and foreign conflict. I think we have no reason to be concerned but I think this time we may be correct. The rising fear of the apocalypse is way in the future, far far away but I feel that we our going on a course towards it. I think your blog addresses the realities and myths of these ideas. I think the climate change movement is becoming ever more mainstream and I feel that concerns are raising about this idea. We will need to something about this and our gas prices and its effect on the economy and world incredible.

  2. The only way to change the course of our economy is to DIVEST!

    Do you know where your retirement fund is invested? If not you need to find out. It could be that you are investing in the very companies that are working against the nation’s interest. You have choices. Move your retirement funds into socially responsible investments like products offered by ShoreBank Pacific (http://www.eco-bank.com/). Or invest in funds that engage in stockholder activism like Green Century Funds (http://www.greencentury.com/).

  3. I’m no expert and I wouldn’t want to scare anybody but I think we’re going to be out of oil sooner than the common consensus dictates. 10 years anybody? Even if we don’t totally run out, the scarcity of supply will be a huge global problem.

    I’m all for scrapping globalisation and starting up localisation again.

  4. Well, I remember this curve graph about running out of oil and this curve said that when the oil fields reach its maximum producing capacity than we will be in trouble. Because this graph I think it was like Humperts or Humphrey or something like that said that our gas needs and oil reserves will eventually reach a maximum capacity and our needs of oil will keep on increasing but the amount of oil will run out. If anyone remembers the name please remind me because it is a very significant graph towards running out of oil.

    http://www.jacktrib.blogspot.com

  5. Jack, you are looking for:

    http://www.hubbertpeak.com/Hubbert/

    King Hubbert was a geologist for Shell, he applied his bell shaped production curve first to individual wells, then to fields, then to the U.S., and accurately predicted that U.S. production would peak in the early ’70s. In fact, it peaked in 1971.

    http://hamiltonianfunction.blogspot.com

  6. Who cares when people think we will run out of oil; when will we run out of oil?

  7. Sure we’re gonna run out of oil. The question isn’t if, but when. When the answer starts to get in the foreseeable future, change will either happen or we’ll go the way of the dinosaur. I think you’re right though in that this is focusing the discussion on some of the right topics. Of Course Big Oil, their constituents, and even investors as someone correctly said (and yeah…they’re investing my money so I’m good with them picking the very scumbags I rail against…since they’re raking it in hand over fist)…they all say it’s gloom and doom and environmental tree spikers who are to blame….The smoking gun is at least out of the holster now….Has the shot been fired??? Probably not….but I think the chamber has been spun!

    T

  8. > “Thanks to the industrialization of the two most populated countries in the world – China and India – the world-wide demand for oil and petroleum based products has soared over the past decade. ”

    Wrong.
    According to BP (2007) data, US oil consumption has grown over the last decade by 2,280,000 b/d while India’s consumption has grown 875,000 b/d.

    US consumption is 8 times that of India, despite India having a population more than 3 times the size.

    Why are you running this agenda against India ?

  9. I have no agenda against India. While you are correct regarding the fact the U.S currently consumes more oil, I’m speaking to the fact that the consumption growth for India is substantially higher than the consumption growth for the U.S.

    Over the last five years, the annual oil consumption growth for the U.S. has been a little over 1%. However, over the same period, the annual oil consumption growth for India has been well over 10%.

  10. The India/China argument is in the Republican platform so half the US will eventually buy into it. It does not equate or answer what’s going on. Republicans don’t want to go there…Guess what? They’re gonna have to. Obama’s in town tonight so I guess I’ll go see the Next President in person.

    Tommy

  11. There’s no doubt that reduction in demand starts with us, as we’re currently the world’s largest consumer.

    That being said, hopefully when we finally get our act together, we can be the trend setters and help everyone else get off oil (or at least reduce consumption) as well.

  12. Brian, You seem to be arguing that a percentage increase is what is pushing up demand. It is the real increase that is pushing up demand. Sure India has increased 51% over the decade, but it has added less than a million barrels/day to demand, while the US has increased demand much more.

    The order of demand increase over the decade is China 3744 (000 b/d), US 2280, India 875, Saudi Arabia 669, Canada 404 .

    On a per capita basis, the US leads as usual.

  13. The question “When will we run out of oil” is misstated. We will never totally run out of oil. What will happen instead, it stat it will be harder and harder to replace the current oil field, and the new fields will be smaller and more expensive to extract oil from than the ones they replace. Eventually the production will decline.

    This will in the end cause the oil to get more and more expensive, and in the end unaffordable as fuel. Thus there will always be oil, but if it cost $30 pr gallon, it has run out in practice, and we need to find alternatives. The oil production is not declining yet, but it seems to be harder and harder to keep up the production, and it has been standing still since 2005, despite record prices.

Trackbacks

  1. […] original news source Watch the latest videos on YouTube.com Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. […]

  2. end of oil says:

    […] be surprised if all of the modern conveniences we’ve come to accept and expect start going away.https://www.dailyfueleconomytip.com/oil-prices/out-of-oil-welcome-to-the-brave-new-world/World oil supplies are set to run out faster than expected, warn …Jun 14, 2007 … Scientists have […]

Speak Your Mind

*

SEO Powered By SEOPressor