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article imageOp-Ed: International Energy Agency says oil supplies really drying up

By Paul Wallis     Apr 28, 2011 in Business
Fossil fuels and fossilized economics have been such fun in recent decades. The global economy, glued to a vanishing resource, has been in denial, but the last word has come from the International Energy Agency. Oil prices are going nowhere but up.
If you see a few grim smiles on the faces of oil-haters like me, it’s because this was predicted 40 years ago. What wasn’t predicted was globalization and the rise of China and India, which have accelerated the process.
This is a quote from the ABC Australia:
…But IEA chief economist Fatih Birol says the world's crude oil production peaked in 2006.
He says oil prices are likely to rise 30 per cent over the next three years.
"The existing fields are declining so sharply that in order to stay where we are in terms of production levels in the next 25 years, we have to find and develop four new Saudi Arabias," he said.
That’s not going to happen. Even if it did, fuel consumption demographics are now breaking the old models of production/consumption, and all new oil finds can do is stave off the inevitable. Big Oil, its lethal pollution and its disgusting politics, are going the way of the dinosaurs. This is one endangered species that shouldn’t be saved.
The other killers are less obvious- Extraction and distribution costs. Those have been rising, and the balance between costs and sale values are unambiguous- Oil can only be profitable at increasing prices. The other oil options are no better. Shale oil, etc are simply versions of the same thing, and they’re not renewable, either.
The economics of oil are inefficient by definition. High overheads are inevitable using a scarcity-based commodity for basic business operations. Businesses are only able to take so much in additional costs. Consumers, with all the costs being passed on to them, are likely to be carrying more expenses.
This scenario, if carried to the logical extreme, would mean galloping, runaway inflation. Prices would become unsustainable.
Book cover for Life Without Oil from Prometheus Books
Book cover for Life Without Oil from Prometheus Books
Courtesy Prometheus Books
The fact is that the world has outgrown oil, economically and mentally. The economy of the 20th century can’t work in the 21st. Even the auto manufacturers are jumping ship, designing electric cars. China is already on that path, and India is set to follow.
Oil as fuel is just a waste of valuable carbon. In any other form, it can be recycled, almost endlessly, for more valuable products. Petrol driven cars are expensive to build and even more expensive to own. You spend more running the things than you do buying them.
There is no reason for the world to continue to use 1910 technology and regressive supply chains like those which support oil economy in 2011. Why use massive amounts of shipping and industrial capacity just to buy a fuel for high prices when you can plug in to a power point for almost nothing?
Getting rid of the politics could be the best thing to happen to the human race and planet Earth in decades. It would help end pollution to a very large extent. It would transform politics in the US and the Middle East, which could only be a good thing. Oil has been the life blood of tyranny around the world and the cause of the blindfolded economics of past and present. If future energy supplies are based on multiple options and actual competition, with no cartels and no feeble-minded politicians to support them, the world will definitely be a better place.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about International energy agency, Big oil, Pollution, Carbon, oil economy supply chain
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