Oil: More Peaked Than Ever

Coming soon to a gas station near you: higher prices, fewer gallons. (Photo by Jason Langheine/Flickr)

Masked by speculation, eased by the great economic contraction in the United States and Europe, the terminal industrial disease known as Peak Oil continues to ravage the industrial world, which has not yet noticed that it is infected, and is just now beginning to feel a little woozy. Peak oil is a little like the Ebola virus — by the time you feel the symptoms, you’re dead.

If you look, you will find the symptoms. Our politicians and our media will not look, the politicians because they are wholly owned by big oil and its subsidiaries, the media because it’s such a downer. But you can look. Here are some of the things you will find:

* Unremarked by the general media and unnoticed by the general public, US reserves of oil and oil products are tightening implacably, despite the lower demand levels because of the great contraction. Eleven  million barrels vanished from this reserve in a recent week. Gasoline prices at the pump remain about 60 cents per gallon higher than a year ago, and crude oil prices continue to hold, in general, $25 per barrel higher than last year.

* The expected easing of demand for oil by China and India as a result of the slowing (finally!) of their economic expansion, has not happened. The reason is widespread and desperate power shortages across Asia. Such things as drought (which has reduced China’s hydroelectric output by 25%), the Fukushima nuclear disaster and a nearly total meltdown of Pakistan’s grid have made power generation with diesel fuel essential to the survival of large numbers of people.

* The International Energy Agency — an intergovernmental agency created by the Organization for Economic Cooperation and Development (OECD) after the 1973 oil crisis to help member governments avoid a repeat — has stopped sugar-coating energy statistics and is becoming ever more agitated in its pronouncements. In June it warned that unless OPEC could increase production by at least 1.5 million barrels per day, world oil consumption would for the first time surpass production. OPEC didn’t, and it did.

The implications of that single fact — the world is now using more oil than it can possibly, ever, get to market — are beyond appalling.

* Moreover, also according to the IEA, unless oil producers invest an astronomical amount of money in the oilfields of the likes of Libya, Iraq, Iran and yes, Saudi Arabia, the situation will get precipitously worse. The likelihood of those investments being made is dramatically reduced by the lack of security in many of the oilfields, and by political complications.

In other words, says the IEA, brace for impact. An impact that may well come sooner and hit harder (in the industrialized world) than anything global climate change has to offer.


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