I can’t say precisely when, so by “soon” I mean within two years at most. My reasoning is below; I’d be curious to hear feedback.

Given that the:

1. Price of oil spiked to $147 per barrel in 2008
2. Current oil price is $80, even though we’re in the worst recession since the Great Depression

I reason that:

1. The price of oil remains ~$80 per barrel because demand is keeping it there.
2. The U.S. is in recession with oil at that price, no recovery is coming. We are in a permanent recession.
3. With oil at those prices during a recession – four times that of just a few years ago – indicates we have hit the limits of supply at this price. That is, oil producers cannot pump more to get the price down, even if they wanted to (which most don’t).

However, demand in China continues to grow, and we continue to burn far more oil than we’re finding, so this means another oil price spike is almost certain within two years. The U.S. economy may find a way to recover somewhat, too; perhaps another bubble can be found. And the Americans are starting to drive more, again. That will push demand up.

Demand is going to push on supply, and price is going to go up fast, followed by a crash to a lower level than we are now. We have to reach a level of recession where we are consuming considerably less oil, or are considerably less dependent upon oil.

As we’re not doing anything serious about consuming or being less dependent upon oil, there will be another spike and crash.

Don’t wait for your federal government or even state/provincial government to provide leadership. They will at best respond too late, once we’re mid-crisis or beyond. Make your town a transition town.

Peak oil is that point in time at which we have burned half or all the available oil. After this time, there is progressively less oil, it is harder to get, and the price trends up – likely with nasty, recession-causing price spikes. However, the realization that the oil supply is running down is even more important, because with this awareness will come some significant changes in behaviour.

Oil exporters (Dealers)

Oil exporting nations waking up to the fact that the world oil supply is diminishing, and acknowledging the reality that their own country’s supply has peaked, are almost certain to reduce exports. To do otherwise would be suicidal in most cases. Let’s take Saudi Arabia as an example:

• Population: 28 million
• Oil: 90% of exports and 75% of government revenue
• Country: mostly desert; only 2% arable

This is not a recipe for domestic tranquillity when the oil revenues stop, or even drop. Less revenue means less services, like roads and hospitals and pensions, and that will make the masses restive. It also means fewer imports, and for a country that has far too many people living in the desert, a shortage of food imports will quickly make the masses violent.

Saudi Arabia is an oil exporter. As acceptance of the idea of peak oil sets in, whether that date is now or simply soon, exporters know that:

• They must get off oil themselves or their economy will collapse, people will starve and/or riot, imports will stop, and they will go back to being nomads in the desert. If they survive the riots.
• Oil is only going to go up in price. Repeat that, and think about what it means: Oil is only going to go up in price. That means that every barrel you sell now could have been sold for more – maybe a lot more – within a few years. So what’s the rush to pump it and ship it?

I should point out that this is a predicament, not a problem for Saudi Arabia and many other countries; there is not necessarily a solution. They may have overpopulated their country to the point that they are reliant upon imports for necessities like food and even water. Once they have no more oil to export, the following are likely outcomes but hardly “solutions”:

1. Mass starvation down to a level that the land can support (a die-back)
2. Mass exodus into neighbouring countries, destabilising them
3. Wars for access to water and arable land
4. All of the above

Responses to the Peak Oil Predicament for Exporters

Leaders, as intentionally obtuse as they have been about peak oil, once they ‘get it’ they will work to ensure that they are protected. It is important to think about it from this point of view, as it is the closest to the actual motivation felt by leaders. Their primary motivation will not be you or your lifestyle. They will want to protect (and continue enhancing) their position, power, and money, and that of their cronies. If you are fortunate, your Dear Leader will choose a way that also helps the masses. They have some options:

• Massive force and a police state to keep the masses in check, as the Soviet Union, North Korea, and any number of other dictatorships have done or currently do.
• “Ethnic cleansing,” or any other excuse to reduce the population and provide a target for people’s anger.
• Continue subsidising an unsustainable lifestyle until it all comes crashing down – people are starving and/or rioting, parts of the country are seceding, the centre has lost all credibility. This happened to the U.S.S.R. and has happened to many empires. It is predicted for the United States on its current course.
• Use remaining oil to build a non-oil-dependent, regionally sustainable economy. So far, only the Scandinavian countries are serious about this, although Germany and some of the other European countries, and Brazil are heading in that direction.

The first three options make oil supply unstable. The final option means there will simply be less oil available for export.

Oil importers (Junkies)

Oil importing nations waking up to the reality of oil shortages and price increases are going to be in a world of hurt. The current recession is very likely permanent, and another oil spike will only deepen it. Let’s take the United States as an example:

• Consumes 25% of the global oil supply; possesses only 3% of world oil reserves
• Imports 60% of its oil needs
• Every economic recession in the past 40 years has been preceded by a significant increase in oil prices
• More than 40% of total U.S. energy demands and almost 100% of transportation fuels are oil-based

Any crimp in the oil supply, or any significant increase in prices, and the U.S. is in recession. Industrial-scale farming is also wholly dependent upon oil, so oil price increases mean food price increases. I have previously suggested that the current recession is permanent because the price of oil does not appear to be returning to levels of recent years; it is now ~$80 per barrel versus the $20 per barrel it had been for many years before, even though we are in the worst recession since the Great Depression.

The United States is an oil importer, and as the idea of peak oil becomes accepted, importers know that:

• They must reduce their dependence upon oil very rapidly or their economies will suffer severe setbacks
• Food and transportation prices will increase, leading to poorer and unhappier people
• Oil is going to go up in price from this point forward, and this will only cause further economic contraction

As for exporters, this is a predicament: there are responses but not really solutions. The solution was to ‘get off oil’ starting 20 years ago, but that path was not taken. Leaders will know that people are going to be very angry as living standards decline. They will be looking for someone and/or something to blame, and U.S. leaders from Congressmen to oil company executives will be likely targets.

As oil prices spike and wreck oil-dependent economies, some possible outcomes are:

1. Mass starvation down to a level that the land can support (a die-back)
2. Population decline as recent immigrants leave
3. Wars for access to oil
4. Breakup of the nation into smaller, more self-reliant pieces
5. All of the above

The first is unlikely but not impossible. The second and third are happening now in the U.S., and the fourth, once unimaginable, now seems at least possible given the division within the country – and hard times haven’t even hit yet.

Responses to the Peak Oil Predicament for Importers

Importers can either reduce imports or find a way to keep the oil coming regardless of declining supply. The most recent U.S. overthrow of Iraq was arguably an attempt to keep the oil flowing; certainly the U.S. has overthrown governments in the past to keep the oil flowing. The United States has a large military presence in the Middle East for just that purpose.

Importers, interestingly, also have the same possible responses to peak oil as exporters:

• Massive force and a police state to keep the masses in check, as the Soviet Union, North Korea, and any number of other dictatorships have done or currently do.
• “Ethnic cleansing,” or any other excuse to reduce the population and provide a target for people’s anger.
• Continue subsidising an unsustainable lifestyle until it all comes crashing down – people are starving and/or rioting, parts of the country are seceding, the centre has lost all credibility. This happened to the U.S.S.R. and has happened to many empires. It is predicted for the United States on its current course.
• Use remaining oil to build a non-oil-dependent, regionally sustainable economy. So far, only the Scandinavian countries are serious about this, although Germany and some of the other European countries, and Brazil are heading in that direction.

The first three options don’t “solve” anything, at least not for you and I. Unfortunately, many ‘democracies’ have put in place laws that allow the federal government great power in the event of an “emergency,” especially anything that can be defined as “terrorism.” My friend recently had a rude awakening about this when the police showed up at his door to ask about an email he had sent that mentioned blockading the Canadian tar sands; how they got the email they would not say.

The final option is not being pursued or even seriously considered in countries like the United States, as the third option is flogged to death. This makes the first two options more likely in the long run.

Awareness is a Powerful Thing

We do not have to actually hit the ‘peak’ of oil for the previously mentioned things to start happening. All that has to happen is for enough people – especially those in power – to realise peak oil is coming and what it will mean.

The responses to oil supply concerns so far by importers have destabilised world peace and the world economy. There is no reason to believe that the current crop of world leaders will take serious action to ‘get off oil,’ making a crash progressively more likely.

Climate change is not a clear and present danger. It is clear to scientists, to those who take the trouble to understand the science, and to those who trust the former or the latter. It is not at all clear to anyone else, and of course the truth and danger are deliberately obscured by paid deniers.

Climate change is also not a present danger, meaning it is not an immediate threat. The longer we put off confronting climate change, the more damage it will do, but the nature of the threat is creeping and exponential. Some changes are occurring right now and many may realise that climate change is a contributory factor, but the danger is distant and remote. Later, as we go up the exponential damage curve, climate change becomes a clear and present danger but it will be too late to stop the worst.

Humanity does face a clear and present danger, however, and combating this crisis will go a long way toward fighting climate change. Environmentalists must not waste this crisis. Despite forty years of environmental activism and some major battles won, the war is all but lost.

If you want to win, it is time to change strategy. The crisis is peak oil, and is dead simple:

1. There is only so much oil;
2. At some point, the peak, we will have used half of all the oil;
3. After that point, there will only be less oil; and
4. Our entire civilisation, especially transportation and food, is dependent upon oil.
5. No substitutes are anywhere near available.

It doesn’t take a genius to realise that unless our need for oil remains less than the supply of oil, the price of oil is going to go up. Way up, given how dependent we are upon it.

From The Oil Drum

After the price of oil spikes, there will be a recession, and the price may come back down. That has been the pattern in recent recessions caused by oil price increases. This time, however, we have passed peak oil and that means the supply is less than it way – which means the price is not going to go down as much as it used to.

We are in a permanent recession as a result of the fact that oil prices are roughly four times what they were a few years ago. Because virtually 100% of our transportation – trucks, trains, planes, ships, and of course cars – runs on oil or its derivatives, the price of transportation has increased. The same effect exists with food, where pesticides are petroleum based, and of course tractors run on diesel. Inflation lately has been driven by these increases in transportation and food costs, and as people have to spend more on necessities like food and transportation, they will have less to spend on other things. This means less consumer demand and therefore a recession.

This recession is permanent and will probably deepen. Just prior to the recession, the price of oil spiked to $147 per barrel, and it is now approximately $80 per barrel. This is four times the price of only a few years ago, when the economy was booming. We are now in the worst recession since the Great Depression. The price of oil is not going down.

How does this recession fit into environmentalism? It is a crisis that will continue until we greatly reduce our demand for oil. Which, coincidentally and interestingly, is also a big part of the cure for climate change.

Climate change warriors need to get behind a plan to get off oil. The peak oil crisis is now, and people will respond. Whether they respond by invading another oil-bearing country, by dissolving into poverty and despair, or by conserving and moving to renewable energy is currently an open question.

Environmentalists, climate warriors, peak oilers, nationalists, and democratic reformers need to pile onto peak oil. The longer we delay, the more damage we suffer from recession, from peak oil, and from climate change. Replacing oil with conservation and renewables makes the nation energy-independent, creates a secure food supply, eliminates oil-induced inflation and recessions, and slashes greenhouse gas emissions.

Peak oil is a clear and present danger to the nation, to our prosperity, and to civilisation, and the protective steps for peak oil will greatly help with climate change. All of us need to join together to combat it.

There’s a lot being said about climate change, peak oil, and other looming catastrophes. Let’s be honest, none of these is helpful and all are potentially dangerous to life as we know it. Some years ago I moved from climate sceptic/denier to climate change warrior, after I investigated and discovered the reality of the threat. Corruption in the financial markets and in our democracies is also quite dangerous, as we have experienced in the current recession caused by crooked bankers and their bought politicians. But where climate change is a long-term threat, and we can stagger along for some time bearing the weight of the banksters, only peak oil looks very likely to deal a mortal blow soon.

Let’s go through these threats one-at-a-time.

Climate change

In brief, we are adapted to this climate, meaning everything from our agriculture to the countless cities at sea level, and any significant change is potentially catastrophic. Many vital crops stop growing above certain temperatures, and even the small amount of climate change we have seen so far is causing droughts and crop failures. A sea level rise of 1m (~3 feet) will displace 100 million people – and the latest projections are for a sea level increase of that magnitude this century. If temperatures rise sufficiently, and we are not doing anything to stop it, most of humanity and most species will be wiped from the face of the earth.

But devastating as climate change will ultimately be, it is not an immediate threat to us personally or to civilisation. (If you live in one of the developing countries, this is not true; bad things are happening now. The slaughter in Darfur was caused in part by the drying up of Lake Chad, which in turn was partly caused by global warming.) The major damage is expected to begin in 40-50 years, as displaced people move into crowded areas and turf wars begin, as water becomes in short supply and water wars begin, as many people realise their lives are going to be destroyed and they get angry about it. Continue reading →