Signs that peak oil has arrived

Peak oil means that we have used half of all the available oil on the planet. From that point forward, oil will become scarcer, harder to extract – and more expensive.

Peak oil wise men say to expect oil price volatility with an overall upward trend. Consider these signs:

• The spike to $147 per barrel in October 2008, just before the banksters crashed the economy
• The price of oil is ~$80 per barrel in the middle of the worst recession since the Great Depression, or 400% more than it was just a few years ago.

Note that there were recessions after the oil price spikes in 1973 and 1979.

The suburban foreclosure rate is higher than the urban rate, attributed to transportation costs which are 17% of the average American’s income, undoubtedly higher for many suburbanites commuting from work to Wal-Mart to McMansion in an SUV. The suburban foreclosure rate is a probable consequence of peak oil.

There will be other consequences, too. If the wise peak oil folks are again correct, we can expect:

• Modern agri-business dependence on oil means food prices will increase
• The increasing cost of transportation will cause everything, and especially imports, to rise in price

I have predicted that the outcome of these two is that our current recession is permanent. With food, transportation, and other costs permanently higher, there will be a reduction in overall employment because more of the family budget will go to these necessities.

Offsetting this drop in employment to an unknown amount will be new farm jobs (at very low pay) and likely a throttling of immigration.

Learning more about peak oil

The following sites are excellent on the subject of peak oil:

• The Oil Drum: Discussions about energy and our future
• Future Scenarios: Mapping the cultural implications of peak oil and climate change
• The Archdruid Report: Druid perspectives on nature, culture, and the future of industrial society

There are also some great books that explain peak oil and its consequences clearly:
James Howard Kunstler’s The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century pretty much sums it up.

Kunstler has also written a novel, World Made by Hand, in an attempt to convey what it would be like for those living in a post-peak oil world.

John Michael Greer’s The Long Descent: A User’s Guide to the End of the Industrial Age also does a great job explaining peak oil and why we don’t see it: we have all bought into the myth of unending progress, rather than accepting that much of our progress has come by burning oil.