Saturday, March 26, 2005

Peak Oil has arrived!

On March 16, world oil prices increased dramatically in response to an OPEC announcement of increased oil production to meet increasing demand and bring down prices: This is the first overt response from the oil industry of the arrival of Peak Oil, and the recognition that, from here on out, global oil production will be less than global oil demand.

Despite this clear indicator, the mainstream press continue to ignore Peak Oil, pretending this is just a temporary blip up in oil prices that will pass when the summer travel season is over: .

Industry sources are pretty clear that cheap oil is a thing of the past:

"We are in new historical territory,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. "The safety margin that we had in the past just isn't there anymore. In the past we could always count on the Saudis to make up for the loss of production in, say, Iraq or Nigeria, but that's no longer the case. The capacity isn't there and demand has risen more than we thought it would."

So there you have it, Peak Oil is here. We'll look back at March, 2005 as the historical point of Global Peak Oil, the point at which the energy available to fuel our civilization, if that's what it is, began it's inevitable decline.

Energy depletion will result in global recession, of course, which will reduce demand for oil for a while, just as it did in the 70s. But the overall momentum of our petroleum-based societies will continue, driven by the necessity for cancerous economic growth at any cost.

If you've not simplified your life by now, dug your garden beds, insulated your home, chosen jobs and markets within walking and bicycling distance, it's time to do it now, as soon as possible. Once the concept of Peak Oil becomes firmly etched in the minds of the global economic community, gas and diesel prices will skyrocket. Depending on the psychological response from the investments types, gasoline could be $5 a gallon or more by the end of the year.

Think about that: $5 a gallon for gas! Our 1972 VW bug will take $50 to fill its tank (about once every other month, nowadays). An SUV will take $125 a tank very time it pulls into a gas station, at 6 miles per gallon. Better dump that monster now before the used-SUV market tops out!

And that's just for starters. When oil is $100 a barrel, what will be the price of gasoline? $7 a gallon? $10? What will a GM tomato from Mexico cost? "Cheap" shirts in Mall-Wart, made in China, from cloth made in Korea, from Rayon made in the US, from pulp from Japan, from trees from Alaska, will cost more than a tuxedo today.

The cost of food products in supermarkets is directly proportional to the cost of transportation. Those fancy wrapped goodies on the store shelves traveled an average of 1300 miles to get in your grocery trolley. What will your frozen dinner cost when diesel oil is $10 a gallon?

We're in the last gasp of "The Global Economy." It's local production for local consumption from here on. The cost of everything in our lives will be determined by the amount of transportation required to get it from raw materials to production to distribution. As the distant and exotic become prohibitively expensive, local, simple and sufficient will become the desirable values; extravagance, excess and conspicuous consumption will be strange historical footnotes.

Why wait to the last minute? Avoid the rush! Start now! Be the first in your neighborhood to abandon the Global Economy and switch to local production for local consumption! Your friends and neighbors will marvel at your perspicacity! Your Quality of Life will soar as you lower your Standard of Living.

As for me, I'm setting up my bicycle repair shop!

Michael
Leona Gulch
Pacific Plate

1 comment:

  1. I've been visiting your site over the past few months. You speak words of wisdom. Keep them coming.

    ReplyDelete