Day 126 – Kings for a day fools for a lifetime – the end of oil

2009/01/08 § 3 Comments


I found a sentence of a speech of the to be USA-president Barak Obama really quite amazing. He said that the current crisis is probably the worst in our life times and that it can take many years before we even begin to see the end of it. Most intriguing however was his statement that if we do not manage to do something against it, we would maybe not get over this crisis at all [1].

I have not transcript of the speech and hence cannot be sure. But if he is trying to say that there is a chance that the (western) world will never return to its prosperous past, he has a valid point. It is indeed a risk [2].

One reason for this is that the IEA has announced this year for the first time, that we are running low on oil [3]. Now, if you are familiar with the concept of peak oil (otherwise check a previous post on it) then you will know that it means that we will have oil for many years to come. But this remaining oil is going to be ever more expensive, because we can not produce enough oil anymore as we need.

I am amazed about the head-in-the-sand strategy that economists and politicians, but also friends of mine, share. Some seem to think that this is such bad news, that it can simply not be true. One friend even suggested that oil has not been produced via million year long biological processes, but that it quickly is reproduced somewhere in the earth- he had heard “somewhere”.

Rest assured, that this is nonsense. However, if you prefer to ignore the possibility of a potentially dreadful future, do not read on.

The fact being that oil production is coming to a peak within the next 20 years, or even has done so already. The huge difference in these estimates owes mostly to the fact that geologists have to estimate how much oil is going to be found in the future.

Were we to have only what has been found already we would be indeed running out of oil altogether in a couple of decades only. However, they do estimate that we will find more. The amounts that are being found each year are decreasing for the last 40 years already (since the 1960s). This means that we are heading towards a depletion of all our reserves.

These simple facts, on which most scientists and geologists can agree on (some I personally talked to) are not really promising the brightest future. Because if oil production does not meet demand any longer our economies are heading towards decline too. You may be surprised, but we are entirely dependent on oil for production of the vast majority of our technological goods.

Even if we would use alternatives for transportation and would not use oil for energy production we were tremendously reliable on oil for production of plastics, colors, drugs, rubber, fertilizers and thereby food. Up to 40% of oil is needed for other purposes than burning it for energy.

10 Calories from oil are used for the production of one calorie of food. An insane fact, if you consider what this would mean for food prices.

So, yes, maybe Barak had that in mind. Maybe not. No matter which thoughts made him say it, he should have these things on his mind when he says, that there is a risk that we will not see the end of this crisis. Ever. That means…Never.

Did you know by the way that “peak-oilers” predicted the credit crunch for a while…like in this video from 2005:

I guess I keep traveling for a while then…burning the last oil on cerosin… 😉

—————-
[1] http://www.spiegel.de/wirtschaft/0,1518,600142,00.html
[2] http://www.marketoracle.co.uk/Article7089.html
[3] http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5141848.ece

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