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Reply #26: Complications [View All]

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rustydad Donating Member (753 posts) Send PM | Profile | Ignore Mon Feb-09-04 10:15 AM
Response to Original message
26. Complications
While the author is right that the peak of oil production is coming his timing may be faulty. World oil production has been essentially flat for several years. On the other hand demand, especially from the emerging giants of the East-India and China, has been growing exponentially. Many informed people believe that peak oil may be here.

The more important issue is what does 'peak oil' mean to our lives and our children's lives. At present oil (and natural gas) are critical to our economy. Oil powers our cars, trucks, trains, airplanes, ships, you name it. There is no other liquid fuel on the planet that can compete with oil products in terms of energy per unit, ease of extraction, storage and transport.

As oil production declines vs demand the market will shift to a sellers market. In the history of petroleum this will be a first. The implications could be overwhelming to the USA. As in any scarcity of an essential commodity prices will be determined by the market and by speculation on what the future market will be. Many see prices of crude above $100 a barrel. At the pump prices may reach $5 a gallon and higher. As every aspect of our economy relies on cheap fuels there will be a feedback effect. Two things are likely to occur. A sharp rise in prices, especially food. Second will be a likely resurgence of inflation as the economy tries to painlessly absorb the new drain on the dollar.

The best outcome may be a decline in our standard of living but gradual enough to allow for adjustments like fuel efficient cars, trains, etc. I personally don't think there is enough time left for a 'soft landing'. I fear that when it becomes obvious that there is no longer enough to go around we will find reasons to use our only trump card, the military solution. We can 'take' the oil if we choose to. We have the military power. The question is will the rest of the world stand back and let that happen? I hardly think so. Hang on for the wild ride is around the corner. Bob in California
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