Ramifications: the long term consequences of peak oil
Peak oil is not the end of the world. It is a subtle, almost barely noticeable phenomenon. It does not mean that we will run out of oil from one day to another, causing all transportation to stop, bringing about famine, chaos, riots and nuclear meltdowns everywhere. We will get there in due time — make no mistake — but not at the time of peak oil supply. Why all the fuss then?
Aswe have seen in Part 1 of this series, there are several limits to global oil supply. First, Earth has a finite volume. Out of this finite volume there are only so many places where oil can be formed and later found. The largest of these oil reserves have been already identified and tapped, and as they near the end of their useful life we are forced to move towards ever smaller, ever more energy and resource intensive to get deposits, or tapping the source rock itself (think: shale). Beyond that there is very little we can do. We are now actively living up our civilization’s lifetime savings at an exponential rate.
As rich, easy to tap fields — providing prodigious returns on investment — slowly give up the ghost, the age of flexible yet reliable supply comes to an end. The persistent increase in energy and resource demand on drilling the next well and getting the next barrel — as we move on to tap ever trickier deposits — will require an ever higher selling price to balance.
The only problem is, that oil prices above a certain point simply end up killing the host, the economy itself. Despite being such a vital — and irreplaceable — input to the economy, petroleum’s affordability will eventually put a chokehold on its own future…
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