claim that worldwide oil production is about to peak, or already has, and that production is about to begin an unstoppable decline. According to the International Energy Agency, World Energy Outlook 2010
, global oil production may have already peaked in 2006. (Also reported in National Geographic
). Even the U.S. military has warned
that a world energy crisis may be looming, that oil production may be in serious decline by 2015, causing widespread shortages.
Unfortunately, world oil production is entering permanent decline at the same time that worldwide demand is exploding. According to Forbes
, worldwide oil consumption has climbed to a rate of 30 billion barrels per year, but the discovery of new fields has fallen to only 10 billion barrels per year on average and continues to fall. Ten billion barrels is only a third of the new finds required to meet current demand
, and will be a tiny fraction of surging demand in the coming decades as the economies of China and India continue their ramp. The 2.5 billion citizens of these two countries want the living standards of the first world. According to the U.S. Energy Administration
, China has gone from consuming 2 million barrels of oil per day in 1990 to over 9 million barrels per day in 2010. China is now the second-largest oil consumer in the world, behind only the U.S. A graph of China’s consumption growth appears exponential.
India’s consumption is on a similar upward arc, albeit slower. India’s consumption grew from just over 1 million barrels per day in 1990 to 3 million barrels per day by 2010. And for an inkling of future demand from these two giants, note that the populations of China and India are each, four times that of the U.S.
What does this situation portend? Exploding prices. Permanent economic stagnation or collapse. Wars over oil. And because oil is used to make everything, from tires to fertilizers to makeup, and transport it all to market, we will see hyperinflation. A Deutsche Bank report warned that oil could hit $175 per barrel by 2016 (as reported in the Wall Street Journal
). That’s just five years away. Oil recently stabilized at roughly $80 per barrel and a gallon of gas hovered at $3.15. The current political turmoil in the Middle East has pushed the price for light sweet crude oil to over $100 and Brent sweet crude to over $110.00. A gallon of gasoline is projected to hit $4 in the U.S. by this summer. Can you imagine a gallon of gas at $8 in five years? Or $15 in just ten years?
Without meaningful action to free ourselves from our oil addiction, the worldwide economy will slip into permanent recession. The price of oil will not only kill economic growth, but bring worldwide inflation and economic and national instability. The U.S. military warns that major wars may be fought over oil. With India, China and the U.S. as the world’s major consumers, who do you think will be fighting those wars?
The U.S. and the world cannot afford to wait to break the oil addiction. For a nation to see oil as a primary energy source is to submit to economic enslavement. There are obvious alternatives to oil: solar-photovoltaic, solar thermal, geothermal, wind, tidal energy, and natural gas. And there is another huge bonus to ending our heavy reliance on oil - reduced global warming emissions. Despite a short respite during the recession, carbon-dioxide emissions are growing exponentially
, and over 40% of all CO2 emissions
come from oil/gas powered engines.
We are at an unprecedented moment
when worldwide economic interests, national security interests, and climate stability concerns are all intersecting, delivering a single, urgent message: We must break our addiction to oil.
Americans consume more oil per-person than any other country. We represent less than 5% of the world’s population and consume 25% of the world’s oil. President Obama’s renewable energy initiatives are a start and some progress is being made. But it isn’t yet enough, and it cannot only be the Democrats who are commited to progress in this area. Should Republicans take majority control of the U.S. Senate, or a Republican replace President Obama in the 2012 elections, renewable energy programs will likely be slashed.
Of course, the major oil companies and their lobbyists have spent millions influencing politicians. According to OpenSecrets.org
the oil and gas industry has donated a perverse and staggering $238.7 million to U.S. political candidates and parties since the 1990 election cycle, 75 percent of which has gone to Republicans. Clearly this is money the industry feels is well-spent. In the 2009-2010 election season, the largest single contributor from the industry was Koch Industries (yes, the Koch brothers), which donated $1.9 million. Over 90% of that went to the Republicans. As reported in CBS News
, the New York Times
, and many other sources, the Republicans have a long history of strangling investments in energy conservation and renewable energy alternatives, thus insuring America’s continued addiction to oil.
And while prices are exploding, Big Oil is urgently reassuring us that there is nothing at all to worry about. Cozy commercials with pretty flowers and laughing children are telling us there is plenty of oil to go around for countless decades to come. Nothing at all to worry about. You can trust Big Oil, right?