I pontificate about geopolitics on other forums of choice, and I have time invested there so I probably won't post here much. But I have to say it is very clear there are some extremely intelligent people who participate here. And a high ratio of them. I have enjoyed your essays (left AND right), and the relative civility (compared to some other PoFos I won't mention, where anything goes, or where ACists rule and ban anyone who doesn't worship the free market)
I've seen many, many threads just like this one. Fear-easing people will go on and on about how much of a red herring Peak Oil theory is - citing Bakken, or Shai Agassi's electric car, or the free market, or 'clean coal,' or tar sands/oil shale, or nuclear, biofuels, hydro, or any combination of hope-based rationalization. Doomist will often fire back with talk of impending descent into the dark ages, etc.
But what I find most often in threads like these is the complete absense in discussion of two utterly undeniable factors: 1) geology. 2) realistic timeline before shock occurs. ... the latter of which appears to be occurring all around us already.
The geology has all but convinced readers of the subject material that oil is at peak - certainly the good stuff. Whatever doubt that still exists after that? Well, the geopolitical red lights sure are flashing and have pretty much nailed the case shut. All that remains is decline. Or, as the character Bryan Woodman said in Syriana:
"What are they thinking? They're thinking it's running out! ... It's running out... And 90% of what's left is in the Middle East."
Technically, it'll never "run out," but a bit of nuance is required here. It doesn't need to run out. It merely can just get too expensive for the average blue collar worker and small business to afford it the same.
So, we'll assume we can dispense with the theory that oil might be 'abiotic' in nature and that it's somehow seeping up from the mantle of the Earth. There aren't many of those people left anymore, as Thomas Gold's book based on Cold War Soviet science has been thoroughly debunked. That being said, if you're like some 95% of us, and you at least accept the fact that fossil fuels are a finite resource, then you likely have turned to something else to buoy your spirits: You hold faith that man's innovation and technology will save the day. A few posters in this very thread have insisted exactly that.
Thus, we get to the time issue.
Think about the transference of 800-900 million combustion engines to something else. It will take decades. And that's just the transportation aspect that sweet crude oil provides. Not to mention all the other glorious essentials we've come to rely on cheap, clean oil for: Pesticides, fertilizers, medicines, road pavement, plastics, rubber (tires), refridgeration, and on and on and on.
Now think about how much time there is before shock sets in. We're already seeing the beginnings of it, all over the planet. Do you honestly believe the global economic collapse is the result of some bad loans, and isolated shady banking? I'm sorry, but it's much more dire than that. To coin a phrase from one of my favorite authors: The economy IS energy, and energy IS the economy. Period, end of story. This is a derivatives crash; a bubble based on the silly assumption of infinite growth and the assanine belief that energy production (a commodity) will forever increase. Huge swaths of the markets are based on energy growth. Without the assurance of it, those markets begin to fail.
But, of course, our corporate masters don't want to openly acknowledge the energy crisis that mankind now faces. They hint at it here and there, ... but the media and beltway lawmakers are more focused on global warming and bank bailouts. Geology is too boring.
Nay-sayers like to point to the falling price at the pump, ignoring entirely the deflationary factors that come into play after price shocks. However people spin it, the long-term trend of oil price is still up, up, up... some 600% in the last 12 years, to be precise.
Meanwhile, we are 30 years "on the couch" of gluttony and way WAY behind on energy transference, even if we found (or invented) some "magic battery pack that runs on sand" as soon as tomorrow. And who has the money to invest in new technology? ... IMO, $90-100 oil is about where it needs to be, and every last extra dime should have been pumped into alternatives and transference. Unfortunately, we lack the foresight and will. Worse, our last two presidents have decided to throw our remaining tax trillions propping up corrupt multi-national investment banks, whose entire existence relies on the infinite growth paradigm that is failing before our very eyes.
Still don't believe the entire agenda of the Bush Administration was securing global oil reserves? Dick Cheney admitted global oil decline in 1999 in a speech to the London Institude of Technology.
For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?
His entire foreign policy initiative was for private companies in America (supported by the military) to forcibly secure what's left of the cheap crude. Not to invest $trillions in renewables. What does that tell you?
There's a reason our leaders have acted like Wild West desperados the previous 8 years, in the face of humiliation, subpoenas and even impeachment. ... They recognized a dire situation, and went about taking and securing the oil, to hell with what anyone thought. "You'll thank us later," was essentially what the Bush Administration's slogan should have been. ... "The American way of life is not negotiable," I believe one of them actually admitted on national television. Make no mistake about it: He was talking about oil scarcity, not terrorism. ...
The geological reality is summed up in the growing mantra "Ghawar is dying,"... They're selling T-shirts with that slogan, in fact. OPEC likes to play with language and say they are voluntarily cutting production in the face of decreased demand. Meanwhile they're pumping sea water into the biggest oil field the world has ever known in a desperate attempt to push out what's left at the bottom of it. When you start water injections into your pools, decline is official. Yeah, I'm gonna say they're not cutting production on a whim. Nature is.
Or as legendary energy analyst, the late Matthew Simmons said (paraphrasing), "when Ghawar goes, the world is officially in decline."
Saudi Arabia used to step in and pump more when global crises erupted. They can't any more, and have said as much. There is no elasticity any more in the global production parameters. You get a nation like Libya's or Nigeria's oil output all but falling apart, the world can no longer make up for that. Prices spike.
In the 50's, Hubbert predicted U.S. oil production decline for 1970, and fellow geologists laughed at him. It peaked in 1971. He also accurately predicted North Sea and Russian oil peak and decline, among many others. The world's geologists are no longer laughing.
That's 33 of 48 oil producing nations in terminal decline. These nations are not investing in new rigs, they are no longer throwing money after the drilling of dry holes. That's because they know the gig is up. Interesting, nations are suddenly scrambling to lay claim at the melting polar ice caps for oil exploration. There's irony.
So, yes, energy shock is coming. And it's coming long before electric cars get up and running for middle class consumers, or oil shale (strip mining?) becomes viable, or biodeisel is perfected... With 7 billion people and counting, there's no voluntary end in sight to world population. A figure curve that has adhered very closely to fossil fuel production for over 100 years. Nature will undoubtedly step in.
Do I believe we're heading to the dark ages? Not exactly. Unfortunately, I see war superceding that long slow descent into anarchy. One way or another, war or depression, mankind's demand for oil is about to be cut significantly. That will ease the need for oil production, ... but at what cost? and how much of the world's financial system will have collapsed?
Technology could still ultimately save the day, and there are great advances already. But I don't believe it will ride into town in time before some levels of shock occur and change the way the world works forever... It's already starting. And now we've made conflict with Iran all but inevitable. You wanna see the price of oil skyrocket? Holy ****.