{"id":24339,"date":"2017-07-01T08:23:47","date_gmt":"2017-07-01T13:23:47","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24339"},"modified":"2017-07-01T08:23:47","modified_gmt":"2017-07-01T13:23:47","slug":"the-looming-energy-shock","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24339","title":{"rendered":"The Looming Energy Shock"},"content":{"rendered":"
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Carlos E. Santa Maria\/Shutterstock<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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The Looming Energy Shock<\/a><\/h3>\n
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The next oil crisis will arrive in 3 years or less<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs.<\/div>\n
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Due to a massive reduction in capital spending in the global oil business over 2014-2016 and continuing into 2017, the world will soon find less oil coming out of the ground beginning somewhere between 2018-2020.<\/p>\n

Because oil is the lifeblood of today’s economy, if there\u2019s less oil to go around, price shocks are inevitable. It’s very likely we’ll see prices climb back over $100 per barrel. Possibly\u00a0well<\/em> over.<\/p>\n

The only way to avoid such a supply driven price-shock is if the world economy collapses first, dragging demand downwards.<\/p>\n

Not exactly a great “solution” to hope for.<\/p>\n

Pick Your Poison<\/strong><\/p>\n

This is why our view is that either<\/p>\n

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  1. the world economy outgrows available oil somewhere in the 2018 \u2013 2020 timeframe, or<\/li>\n
  2. the world economy collapses first, thus pushing off an oil price shock by a few years (or longer, given the severity of the collapse)<\/li>\n<\/ol>\n

    If (1) happens, the resulting oil price spike will kneecap a world economy already weighted down by the highest levels of debt ever recorded, currently totaling some 327% of GDP:<\/p>\n

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    (Source<\/a>)<\/p>\n

    Remember, in 2008, oil spiked to $147 a barrel. The rest is history — a massive credit crisis ensued. \u00a0While there was a mountain of dodgy debt centered around subprime loans in the US, what brought Greece to its knees wasn\u2019t US housing debt, but its own unsustainable pile of debt coupled to a 100% dependence on imported oil — \u00a0which, figuratively and literally, broke the bank.<\/p>\n

    …click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Carlos E. Santa Maria\/Shutterstock The Looming Energy Shock The next oil crisis will arrive in 3 years or less There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[3596,195,246,263,353,588,10768],"class_list":["post-24339","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-chris-martenson","tag-debt","tag-economy","tag-energy","tag-gdp","tag-oil","tag-peak-propserity"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24339"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24339\/revisions"}],"predecessor-version":[{"id":24340,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24339\/revisions\/24340"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}