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Peak Oil Future
By Edward Glover
Peak Oil Period 2006 Through 2010
Based on recent documents that I have read, it appears that worldwide oil production will peak in this year (2006). Kuwait's major field has apparently peaked and is in decline, Mexico's major field has apparently peaked, the North Sea peaked a year ago or so, the USA fields are in continual decline and very little new oil has been found. That said there is nothing particularly special about Peak Oil day. It is likely that it will not be recognized for some time afterward. The world doesn't recognize geological events. They mostly recognize political and economic events (man made events). The major event is when oil demand clearly overtakes oil supply and the price shoots to $200 - $500 barrel. This major increase is likely prior to 2010. However, it may be postponed even longer due to economic weakness or demand destruction.
The near term effects will be ECONOMIC !
Initial effects of Peak Oil are not the second coming. There will not be a mass migration to the farm, or a plague of locusts that descend on the land. The lights will not go out and stay out in New York City. The country's transportation system will slow, but not stop. There is no need to buy a horse, hide in bunker or acquire a machine gun. But there is a need for urgent and prudent individual action.
A major oil price spike will set off a chain of economic events that will be or resemble an economic crash / depression. An economic house of cards has been built in the USA for the past 60 years, and it will likely collapse when something triggers it. The trigger will likely be high oil prices, but it could be something else. Even without Peak Oil, the USA credit system has grown to such unbelievable heights that collapse is almost certain at some point in the near future. For example, US Federal Reserve System has created more than 30 Trillion dollars worth of credit in the economy. Eventually, it will be liquidated through defaults. Under such a scenario, unemployment could easily reach 30% in the USA and Europe. The US stock market may crash to below 1000 points. The price of oil will likely FALL, Yes, I did say FALL. The price of just about everything else will probably fall in real currency terms. Many banks will likely fail; borrowers will default on debts; the USA dollar may lose 90 percent of its value.
In the chaos of a major economic decline, Peak Oil may get lost in the confusion. In fact, if demand falls faster than supply, Peak Oil may go largely unnoticed. This is probably not a scenario that most Peak Oil forecasters are considering, but it is possible. North American natural gas is another story, and probably a more serious issue that will not go away. Also, in the intermediate to long term, Peak Oil will likely rear its ugly head time after time.
Bottom Line---- A major economic depression that likely lasts at least FIVE years is the likely fallout from Peak Oil / Peak Gas. It will likely be more severe than the Great Depression of the 1930's, and it could last longer, and lead to World War III. If you desire more detail regarding the conditions of life during those periods, please read accounts of the 1930's depression, unbiased accounts of the Soviet revolution in 1917 or the Weimar Republic inflation nightmare in the early 1920's. These should provide good, illustrative examples of coming future attractions for at least a portion of the US and world population.
Immediate Post Peak Oil Period 2010 - 2040
This will be a MOST dangerous period for the world. It is during this period that the worldwide economic depression will be in full swing and economic activity near a low. Past history suggests major War. For example, following the economic bubble of John Law in France and the South Sea bubble in the 1720's, an economic downturn ensued that lasted virtually until the 1780's - Sixty Years!! War did not occur immediately, but during this period it occurred frequently. The Seven Years War and the American Revolutionary War are examples. Another economic bubble in France in the 1780's led to the French Revolution and the eventual rise and fall of Napoleon. An economic boom in the 1820's and 1830's led to a slow economic bust in the 1840's and 1850's. This paved the way for the American Civil War. The economic collapse of Russia following World War I, the Weimar inflation of the early 1920's and the Great Depression of the 1930's, directly led to the rise of Communist Russia and Hitler in Germany and eventually World War II.
All of these problems occurred following economic booms that paled in comparison to the worldwide boom that has occurred since 1982. Furthermore, during none of these booms was a critical resource for development (primary energy) ever in any real shortage. Thus, it is hard for even the most optimistic of prognosticators to think that this current generation can escape the fate of the previous ones. In short, it is hard to imagine a scenario WITHOUT a major worldwide conflict occurring after the greatest economic boom in history falls off the bloom, and after a period where critical resources are in short supply.
Even if war does not occur (only because it is too costly), the economic effects from such a war will be severe. As the economy begins to recover from a depression, it will likely run head long again into oil and gas shortage issues. This will likely cause yet another economic crisis. Thus, even the best future scenario sees major economic busts followed by anemic economic recoveries for a long period of time. Alternate energy sources will mitigate the problems, but will never be able to replace oil and gas. Nevertheless, solar and wind will slowly grow in importance as energy sources. Electricity usage will have to be cut back substantially - no more air conditioning in the summer, and lower thermostat settings in the winter (i.e. 50 degree F). Coal can be used to make both a liquid and gaseous fuel. However, this fuel will be expensive and will have to be carefully rationed either by price or government control. Airplane travel for the masses will be gone - substituted by occasional rail travel. Personal cars will be replaced by buses and transit systems. Provided nuclear war does not occur, suburban Sprawl will collapse inward, leaving ghost houses in the outer suburbs. People will be forced to spend larger percentages of their income of necessities such as food, water, transportation and clothing. Home gardening will need to be done on a large scale. The boutique service industries will disappear, government employment and pensions will be retrenched, and the major retailers will be restructured and liquidated. The US population will stop growing and begin to decline. Life expectancy will decline and overall living standards will decline.
Distant Period 2050 +
This is hard to forecast because so many different scenarios are possible. However, this is the period most of the prognosticators of gloom and doom scenarios 'see'. The only difference is they envision its occurrence at the time of Peak Oil or just a few years later rather than decades from now.
My best guess is it will be an age that resembles the 19th century rather than the 20th century. People will be forced to work harder and endure fewer comforts. We will have to be closer to the land and closer to each other. The service sector of the economy will decline dramatically and many of the workers will be forced into agricultural jobs or more primitive manufacturing jobs. The highly atomic structure of today's society (everyone has their own house) will give way to extended families working together. The example of Russia today is useful. After many lost their material possessions or could not replace possessions that were used up, they were forced to create better relationships between themselves. This will occur again in the USA.
Future health will be worse in most regards due to shortages of resources. However, the diseases of gluttony which many American's suffer will be much, much rarer. Religion will likely exert a stronger and more dominant role in the culture than it has in recent decades. Modern technology will still exist to some extent in this period. For example, cell phones and the internet may continue to be available. Television and radio will likely persist. So life will not be quite the same as in 1700. However, it will not be like it was in the carefree days of 2000, either. The US will likely be forced to reduce its energy consumption by 80 percent from year 2000 levels. Thus, energy efficiency will soar and waste will disappear.
Sadly as a result of war and depredation, the USA and most other Western democracies may lose their republican traditions and forms of government. This is a trait of human psychologies. When serious trouble begins, most people prefer to collectivize and concentrate economic and political power in a relatively small number of people rather than tolerate the anarchy and indecision that a democratic process entails. The worse the situation the more power gets concentrated. Should a dictatorship emerge, it will likely emerge during the brutal transition period of 2010 through 2030, and gradually lose its control as time passes (usually three generations after its inception).
What can We do?
In my view, there is very, very little that can be done to completely mitigate the problem of Peak Oil. It is just too far advanced. However, if I were an absolute dictator, I might take the following steps.
What can You do?
Since most of this is unlikely to be done or might backfire if it were actually tried, I suggest that you make your own preparations. Here are some suggestions with the most important first.
