Peak Oil in 10 Minutes
Thank you for being here with us today.
What is on your mind?
Gasoline prices are rising. Gasoline prices have DOUBLED in only three years.
Why?
Oil prices are rising. Oil prices have TRIPLED in the same three years.
Why?
Global oil extraction (or production) HAS NOT increased in the same three years.
Why?
The natural decline in extraction in many countries is MATCHING the increase in extraction in other countries. More countries move from the INCREASING to the DECREASING column every year. Eventually, those that are in natural decline will OVERWHELM those with increasing extraction. From that point on, global oil production will be in terminal decline.
Is that all?
Even more important for the USA is that AVAILABLE OIL EXPORTS around the world are already in decline. In other words, all of the nations that are desiring oil, and that are trying to buy oil, are having to compete with each other for a shrinking supply. The highest bidder gets the oil, so the prices are going up and up. There is no end in sight.
How high could the price go?
Higher than most imagine. The price for a barrel of oil (42 gallons) could go well over $1,000 per barrel.
How high could gasoline price go?
Gasoline prices could easily go to $15 per gallon. In fact, they will probably go much higher than that.
How soon?
That will depend on how quickly AVAILABLE OIL EXPORTS decline. For example, not only is Saudi Arabia going to decrease extraction from 9.2 to 9.0 million barrels per day, but they are also consuming a greater and greater fraction of that. This means, the amount they are exporting is decreasing every year. The same is true for Russia, and all other oil exporting nations.
What can we do?
We need to very rapidly, at all levels and on all scales, reduce our dependence on oil and other fossil fuels. This means we need to conserve. We need to use the most energy efficient means of doing things.
What can an individual do?
First off, accept that gasoline prices are going to keep rising forever. Oil prices will rise forever as well. This is not a good time to be buying a house far from work. It is not a good time to be buying a new fuel inefficient car. It is essential to reframe the view of the future so that we can make good choices.
Do you have anything more specific?
I can talk about what I'm doing. First of all, based on the evidence, I think it is entirely possible that the decline in world oil will mean a severe economic depression of years or decades in length. This might be headed off by a collapse of the stock market, and even a collapse of the dollar. In other words, we might enter an inflation trap where prices go up and up and up. We may also see a loss of all lending by credit cards and banks. We could see a string of bank closures, or the closure of practically all banks.
How likely is this?
I don't know. I am convinced that it can happen. I am hopeful that it will not.
I think of it just like I think of my home. I don't know that I'll ever have a fire. I hope I'll never have a fire. Given statistics, it is unlikely that I'll ever have a fire. But, none-the-less, I've done a few things to prepare for a fire. I have a box a the bank with important papers. I have a fire box in the house with odds and ends that I really want to protect at home. I have smoke alarms. I have a fire extinguisher. I've visited the local fire station. I've got fire insurance for my home.
What do you mean by all of that?
That even though I hope that a severe economy event doesn't occur, I'm making an emergency plan. For example, I've stocked up my pantry at home. I've paid off my debts. I've increased the energy efficiency of my home and my life. I've started paying attention to what is going on in the world.
What about if this doesn't happen?
In that case, I have food at home that I will eat. I have less bills, and lower bills because of having things paid off and increasing the efficiency of the home.
We're also planning for a slower decline. For example, my wife is planting a quite substantial garden, in fact, adding a third garden. We're going to be buying more trees that grow food. We're getting to know our neighbors so that we can work together. We're planning to build a small new house that is zero energy.
Any departing thoughts?
The future is going to be very different from what any of us can imagine. As the oil supply declines, we are going to be faced with challenges unlike any other time in history. Despite the challenge, this is also a time of opportunity, for us to move beyond this current unsustainable civilization, to an incredible better world in the future. The opportunity is now. It is time to act.
What is on your mind?
Gasoline prices are rising. Gasoline prices have DOUBLED in only three years.
Why?
Oil prices are rising. Oil prices have TRIPLED in the same three years.
Why?
Global oil extraction (or production) HAS NOT increased in the same three years.
Why?
The natural decline in extraction in many countries is MATCHING the increase in extraction in other countries. More countries move from the INCREASING to the DECREASING column every year. Eventually, those that are in natural decline will OVERWHELM those with increasing extraction. From that point on, global oil production will be in terminal decline.
Is that all?
Even more important for the USA is that AVAILABLE OIL EXPORTS around the world are already in decline. In other words, all of the nations that are desiring oil, and that are trying to buy oil, are having to compete with each other for a shrinking supply. The highest bidder gets the oil, so the prices are going up and up. There is no end in sight.
How high could the price go?
Higher than most imagine. The price for a barrel of oil (42 gallons) could go well over $1,000 per barrel.
How high could gasoline price go?
Gasoline prices could easily go to $15 per gallon. In fact, they will probably go much higher than that.
How soon?
That will depend on how quickly AVAILABLE OIL EXPORTS decline. For example, not only is Saudi Arabia going to decrease extraction from 9.2 to 9.0 million barrels per day, but they are also consuming a greater and greater fraction of that. This means, the amount they are exporting is decreasing every year. The same is true for Russia, and all other oil exporting nations.
What can we do?
We need to very rapidly, at all levels and on all scales, reduce our dependence on oil and other fossil fuels. This means we need to conserve. We need to use the most energy efficient means of doing things.
What can an individual do?
First off, accept that gasoline prices are going to keep rising forever. Oil prices will rise forever as well. This is not a good time to be buying a house far from work. It is not a good time to be buying a new fuel inefficient car. It is essential to reframe the view of the future so that we can make good choices.
Do you have anything more specific?
I can talk about what I'm doing. First of all, based on the evidence, I think it is entirely possible that the decline in world oil will mean a severe economic depression of years or decades in length. This might be headed off by a collapse of the stock market, and even a collapse of the dollar. In other words, we might enter an inflation trap where prices go up and up and up. We may also see a loss of all lending by credit cards and banks. We could see a string of bank closures, or the closure of practically all banks.
How likely is this?
I don't know. I am convinced that it can happen. I am hopeful that it will not.
I think of it just like I think of my home. I don't know that I'll ever have a fire. I hope I'll never have a fire. Given statistics, it is unlikely that I'll ever have a fire. But, none-the-less, I've done a few things to prepare for a fire. I have a box a the bank with important papers. I have a fire box in the house with odds and ends that I really want to protect at home. I have smoke alarms. I have a fire extinguisher. I've visited the local fire station. I've got fire insurance for my home.
What do you mean by all of that?
That even though I hope that a severe economy event doesn't occur, I'm making an emergency plan. For example, I've stocked up my pantry at home. I've paid off my debts. I've increased the energy efficiency of my home and my life. I've started paying attention to what is going on in the world.
What about if this doesn't happen?
In that case, I have food at home that I will eat. I have less bills, and lower bills because of having things paid off and increasing the efficiency of the home.
We're also planning for a slower decline. For example, my wife is planting a quite substantial garden, in fact, adding a third garden. We're going to be buying more trees that grow food. We're getting to know our neighbors so that we can work together. We're planning to build a small new house that is zero energy.
Any departing thoughts?
The future is going to be very different from what any of us can imagine. As the oil supply declines, we are going to be faced with challenges unlike any other time in history. Despite the challenge, this is also a time of opportunity, for us to move beyond this current unsustainable civilization, to an incredible better world in the future. The opportunity is now. It is time to act.