Saturday, August 21, 2004

Peak Oil

The BBC asks Is the world's oil running out fast?

Interesting question. As the price of oil rises, we should find new ways to extract it, new ways to conserve and, at long last, alternative energy sources.

Still, the price of oil will rise, and the increased price will affect the world economy. After we reach the peak oil production point (possibly within 5 years), and production begins to fall, how will markets react? Will oil futures smooth the transition to a more limited oil supply? Or will there be a psychological discontinuity that will send the world markets into a tailspin?

I'm not an expert.

However, some members of the Association for the Study of Peak Oil (ASPO) believe that the coming oil crunch will be painful.

Recent oil price hikes and weak refining capacity have been a boon for the oil business. Similarly, I expect that oil companies will profit from declining oil production. Lucky them.

The BBC has a nice series of articles on life in the age of dwindling oil supplies, including one entitled What to use when the oil runs out.

2 comments:

rob said...

Hi Doc,

Thanks for the info-comment you posted in the Cosmos.
I see some positve things coming from the price hike in oil.I am starting a small local lumber mill here in
southern VT. due to the increased cost in trucking and I am sure others will explore different ways to capitalize in the same manner.
I have been using a couple of greenhouses that are not growing anything 70% of the year to dry the lumber.I can then sell it or use it in my projects.I get the lumber from land clearing for construction.
The greenhouses could also be used as a fuel source for a geo-thermal heat pump to heat the house as long as a backup system is in place.
I hope to build a prototype in the near future.
I'm going to post a comment on you Kerry post concern your new organization.

Rob

formerbackpacker said...

>Or will there be a psychological discontinuity that will send the world markets into a tailspin?


I don't think there will be, not a lasting one. People have a short attention span. How many times could they run this as a news story, really? A year or two, tops. After that, people will adjust. Prices may rearrange themselves based on a higher cost of transportation of goods or people. Maybe they will sell 5% fewer Hummers and Yukons.