What Will Happen When We Run Out of Oil?
Many believe peak oil is here, which begs the question of what will happen when we run out of oil? The answer may very well be that this is the wrong question.
Prices
As we’ve all noticed, oil prices are going up and up. Some of this is speculation, but much of it is the basic fact that there are supply pressures. The world can currently only produce about 86 million barrels of oil a day. With China and India growing economically, we are right at that figure on the demand side. This has resulted in price increases. In 2001, we paid a bit over $1 for a gallon of gas. Ten years later, we are paying three times as much. While speculation in the oil commodities market is a part of this, the simple fact is the increase in demand is causing prices to go up as it would with any product.
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Mad Max
So, are we just around the corner from our Mad Max moment? You know, when oils runs out and we all start dressing in a cross between hockey pads and S&M outfits while carrying around bats with nails sticking out? Not a chance. Oil is not going to dry up for the next two hundred years at least. The problem is not oil running out, but demand outpacing supply and the impact that has on our lives.
We are almost entirely dependent on oil as an energy source. It is used to grow our food, move our food and package it. Plastic is made from petroleum. Your clothes use it. Next to water, it is the one resource we are most dependent upon. Given this, the rise in price can really do a number on our economy and way of life. Remember 2008? Oil went to $140 a barrel and people started becoming frugal. This meant sales of consumer products crashed and the Great Recession soon followed.
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Well, what will happen if the price for a barrel of oil goes to…$200, $300 or more? This is the fear with peak oil. While there is oil to be found, there will be less of it and more demand. How will people and countries react to this? Simple. Countries will go to war to obtain and secure the oil resources. This is why we’ve invaded an Iraq that “might” have had weapons of mass destruction, but not lifted a finger towards North Korea which has set them off and threatened to attack us. One has big oil reserves. One does not. Many feel the next world war could be fought over oil reserves.
Doomed?
So, are we doomed? No. We can either implement plans to change our energy platforms away from oil or we can wait till a crisis occurs. We are seeing planning now with the government providing financial incentives to consumers who buy hybrid cars, solar panels and what have you. The implementation of wind farms offshore is also a new development that will help. The question is whether this is enough and happening fast enough? I doubt it. Still, we will get there, but it could be a very rocky road.
