Tuesday, May 06, 2008

Peak Oil

It's no secret, I hope, to intelligent, thinking, aware people, that fossil fuels are a finite resource, and we are burning fossils faster than new fossils are being made. Make sense?

See, for those of you in the cheap seats, I will reiterate. It takes thousands of years, a great deal of pressure and unimaginable heat for algae, kelp or dinosaurs to become petroleum or other related carbon fuels: coal, natural gas/methane, and petroleum distillates. In the last 200 years, we've burned about half of what was placed naturally in the earth's crust, and our demand is accelerating. Best case scenario, we have 200 years of fuel left.

Of course, that's if the consumption arc looks like a bell curve. It won't.

But people continue blindly on, buying more cars, building more malls in the burbs, and building more highways. It's willful blindness, and it frustrates me.

Take this, for example. The National Post has recognized that gas prices will not go down. I ask myself first, when have they ever, except on the Tuesday after a long weekend, and only for a little while. The creep has been inexorably upward, but no one sees that.

Given the short-term challenges the world faces in increasing oil supply, I would argue that it will be next to impossible to come up with an extra 10 million barrels per day of supply at the current price in 48 short months. It is far more likely that, instead of increasing supply to meet future demand, the global consumption of oil will have to be reduced -- and this can only be achieved though "demand destruction" or significantly higher oil prices.

It is hard to see how we are not in middle of an accelerating oil shock that could end up rivalling the energy crisis of 1973-74, when the per-barrel cost of oil quadrupled. As during previous energy crises, we will have to make painful changes to our oil-intensive lifestyles, the least of which will be to buy smaller cars and homes, and gripe about high gas prices.

Well, duh.

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