Oildummy.com

It’s been exactly 1 year and 1 week since I decided to stop writing on this site. Since then, I’ve only grown more passionate about the environmental crisis our planet is facing.

Also in the past year (in the past 3 months actually), I’ve started a new finance site, Shultice Financial. On my new site, among other things, I’m exploring economic and financial topics as they relate to the environment.  Feel free to check it out.  I’m really excited about its future.

This is really tough for me, since I’ve put so much into this site over the past year. However, with other projects on my plate, including my other blog, www.youngdough.com, I’ve decided my efforts are better served elsewhere right now. Basically, I don’t feel I can put in enough effort to make my 2 blogs grow successfully, especially with my commitments outside of blogging. Right now I’m sort of spinning my wheels and going nowhere.

I’m still terribly concerned with the subject of this site, and I will continue to live my life in ways that help the situation. I don’t want to abandon this site altogether (too much invested to do that!), but my postings might be a lot fewer in quantity (but hopefully better in quality).

Thank you for all your support!! Definitely feel free to search the archives and comment. I’ll still be checking by!

The first time geophysicist M King Hubbert predicted a peak in oil supply, he was ridiculed.  However, his prediction in 1956 that US oil production would peak around 1970 was ultimately spot on.  Our production topped in the early 70’s, and has since been on a steady decline, following the production bell curve he illustrated.  If Hubbert’s longer, much more dire prediction, soon becomes reality, we are in for some desperate times.  At that same of his first controversial prediction, Hubbert suggested that worldwide oil production would peak about a half century later, which would ultimately put us near the peak right now. 

Rather than simply running out, oil production for both a single field, a country, and the entire world follows a predictable curve.  At first, production is easy and cheap, and it just keeps growing along with the economies that grow along with it.  However, as time goes on oil becomes harder and harder to extract.  Old fields’ production gradually lessons, and it eventually becomes too costly and energy-intensive to keep drilling.  We are then forced to look to far less attractive sources for it, such as deep under the ocean floor or near the arctic.  Inevitably, far before the oil actually runs out, growing production is unsustainable.  The problem lies in the fact that vast societies are entirely built on cheap, abundant oil.

Now that economic expansion is reaching billions and billions more than ever before (China, India), worldwide demand for oil continues to soar.  With far more people than ever before have access to relatively cheap oil, supply is naturally going to be even tighter.  By the time all these countries show up to the party though, it very well might be nearing it’s end. 

As I write this oil is trading in the $131/barrel range, slightly down from the $138 it jumped to after Morgan Stanley predicted it would breach $150 by July 4th.  Granted, speculators have played a massive role in driving prices this high, and we will probably see a major correction soon.  There’s no way prices should have jumped so quickly, but I don’t believe the long-term march upward is going anywhere.  You won’t hear much, if any, news on the major networks about long-term supply shortages, but I believe we could be observing the early stages right now.  What do you think?  Is this peak oil, or am I way off?  There’s so many different arguments about this, each with valid points.  I’d love to hear yours.

This post continues to follow Planet Greens’ Peak Everything series.

Planet Green’s web site has a series running entitled ‘Peak Everything’, in which they examine the long-term prospects for commodities that are essential to our livelihoods.  They have concluded that many of these important goods are going to face major supply challenges in the future, if they aren’t already.  Everything from rice to water to metals face the threat of a supply peak, in which global supplies reach an unsustainable high even though the global population’s demand continues unrelenting.  In this post, we’ll look at their report on corn.

Cheap grain prices over the past decades have allowed us to construct a diet that is entirely dependent on it.  As the article points out, a McDonald’s meal is almost all derived from corn.  This is proving to be troublesome now, as an ever-growing world population that continues to chip away at farmland is putting heavy strains on supply.  Further adding to the issue is our love affair with meat, as livestock demands a lot of the stuff and takes up a large amount of land to boot. 

Our nasty little habit of burning corn in our gas tanks is really starting to prove to be a dumb idea, although we just keep doing it.  When massive food shortages seem to be in the early stages, it just doesn’t make sense to be diverting 5% of the world’s grain production to fuel production, especially considering it’s barely energy positive to do so, if at all.  Yes, oil is expensive, but we can’t sacrifice our food supplies in a desperate attempt to help.  I do feel that more people are realizing this, even here in Iowa, but we really need to give it up completely as a future fuel option. 

The corn shortages figure to have major impacts on our lives, but the situation isn’t completely dire.  As the article suggests, the rise in prices of cheap, processed foods will make healthier and more environmentally friendly eating a more viable option for many people.