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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.

Well, we’ve reached a milestone in our oil addiction; the price of a barrel of crude oil closed above $100 for the first time last week.  Our consumption, though, is steady-eddy as always.  It seems that Americans are now accustomed to $3 a gallon gas.  How much longer can this trend continue though?

Who would have guessed back in 2002, when crude was hovering in the $20 range, that we would see a five-fold increase in only 6 years?  I believe this huge run-up is testimony to the fact that the world continues to demand more and more oil yet supply is struggling to keep pace.  Just look at China and India.  Those two countries continue to get thirstier, plus America’s unbelievable amount of energy demand hasn’t relented. 

We’ve witnessed the enormous growth of the environmentally friendly/energy conservation movement over the past several years.  We’ve got a long ways to go though, and I hope we have the time to do it.  At present rates of demand, I’m doubtful we could operate with oil at $200 a barrel.  Energy prices have been on a long-term upward trend for a while now; will it continue?  If it does, where is the breaking point?  I sure hope we don’t have to experience it.  We need to act faster.

One thing is for certain right now.  The environmentally conscious/energy conservation movement is big; really big.  Many individuals are trying to change their ways while businesses are scrambling to improve their PR in this area, not to mention all the firms trying to come up with the earth-saving solution.  I’m curious though as to whether or not this trend is here to stay.  If we continue seeing the negative effects of our actions on the earth and/or fossil fuel prices continue rising, I don’t doubt it will go anywhere.  On the other hand, if there are no new developments that keep us acting, could the movement fall by the wayside? 

I’m reminded of the energy shortages faced by this country back in the 70s, and all the positive changes that followed.  Congress lowered the speed limits on highways, there were many new incentives and grants available for alternative energy, and smaller cars began dotting the roadways.  It looked like America was going to do something about its reliance on foreign oil sources.  Not exactly.  OPEC lifted their embargo on us, fuel prices retreated from their all-time highs, and people forgot all about those positive changes.

Fast forward 30-some years, and we are even more dangerously addicted to foreign oil, especially from unstable areas of the world.  The energy-conservation movement from back then succumbed to larger vehicles, including the birth of SUVs, along with the evolution of the suburban lifestyle.  My question is; can it happen again?

We have a lot of pressing issues both home and abroad, and our presidential candidates are ever-reminding us of how they plan to fix them all.  With all these things that our country is facing right now, it’s entirely possible that this important issue could lose steam as others make more headlines.  The stakes are a lot higher now then in the 70s, and I hope that this country will realize that inaction this time around would be foolish. 

What do you think?  If energy prices remain stable and we grow even more accustomed to $3/gallon gas, will we forget about what drove us to act in the first place?  Will other political issues push this to the back burner on our priority list?  Is it a real movement, or is it a trendy fad that is likely to pass?

    We need to take a step back for a minute, and consider how many aspects of our lives are fueled by oil. Only then can the sheer magnitude of our addiction be understood. It is eye-opening to think of how one finite resource supports so many different vital ingredients to our well-being.

    We can thank oil for putting food on our tables. Every stage of the agricultural process uses fuel, from planting, the use of fertilizers, pesticides and herbicides, plus harvesting and transportation. Fresh produce often has to travel thousands of miles to the store, burning lots of fuel in the process. Without the help of cheap oil, our grocery store offerings would be severely limited or highly expensive.

    Oil fuels our transportation. Whether it is to work, to school, to the game, on vacation, through water, through sky, to space or anywhere for that matter, it gets us where we need to go. It carries our letters, postcards, and packages cross-country. It has allowed us and our goods the unprecedented ability to get from place to place.

    We can credit nearly everything we in our houses to oil. It’s amazing how many plastic products we rely upon: bottles, sacks, toys, computers, electronics…. Wood, drywall, shingles, carpet, windows, furnishings, appliances are all things that use up petroleum somewhere in the production process and must be delivered to construct our home, sweet home. Needless to say, oil dependency is everywhere in our homes, and most of us must not forget that it heats them as well.

    This is just this tip of the iceberg. I could sit here all day and list ways that oil is the lifeline of everything within our way of life. It is obvious that this topic is a large one indeed, intertwined in every nook and cranny of our existence and well-being.