"Peak Oil" and Us

Separate threads from articles appearing over the past two weeks in the “The Economist”, “Bloomberg Businessweek” and the Wall Street Journal tie together the conclusion that recent trends in energy costs again are lulling us into a misplaced sense that there is plenty of time to get our collective energy act together.

If one makes energy decisions simply based upon current headlines and the price of gas at the pump it is easy to act as if there is no urgency to upgrade home energy efficiency substantially or make changes in lifestyle based upon the cost of energy. Gas prices are touching on the $2.50 per gallon range and may fall lower and electricity rates may even decline slightly in 2011. So, am I, and others who believe there is an imperative to live a more green and sustainable lifestyle, simply doing a good impression of “Chicken Little”?


Consider the concept of “Peak Oil” and its consequences. Peak Oil is a term that defines the point in time when the amount of oil being found in new oil fields equals the losses from drawdown of existing fields. Past the point of Peak Oil, a country is consuming more than it is producing. The U.S. was the first oil producing country to “peak” in 1970. Since then domestic oil consumption has exceeded new finds and we now import 67% of all our oil, in the process giving financial and political strength to petro dictatorships and interests inimical to our own around the globe.

Unfortunately the business of “Peaking” is now all too commonplace and reasonably predictable. In the May 27th article, Barreling Toward Peak Oil, “Bloomberg Businessweek” reported that of 30 non-OPEC countries with significant oil production, 13 have peaked or are about to peak and together they contribute 52% of world oil volume outside of OPEC. Including OPEC the forecast is that global oil production will “Peak” between 2015 and 2020, a point in time only 5-10 years off.

What are the significant factors contributing to this timetable? Look no further for causes than our own unbridled energy consumption, combined with the 1-billion+ populations of China and India. China and India each have an emerging middle class that exceeds the total size of the US population and their nouveaux middle classes want to live and consume like Americans. It should give anyone pause to recognize that in 2009, a period of global recession, Chinese auto purchases increased by 56% over the prior year.

What are the anticipated results from the process of “Peak Oil” rolling through the world’s oil producing countries? A number of energy analysts predict that by 2015 the price of oil will be $150 per barrel, versus today’s cost in the $70’s/barrel.But, some analysts predict that price could move as high as $300 per barrel when demand for oil far outstrips supply. If we did not like the price of gas when oil ran up to $140/barrel, the price of oil between 2015 and 2020 could make that seem like the inexpensive “good old days”.

The combined message of the foregoing facts and predictions to you and me is that we must seize every opportunity to make the homes we live in and buildings we work in as energy efficient as possible and to elect lifestyle choices that reflect understanding that living in a manner that is more sustainable for ourselves and others is an absolutely essential key to a more abundant, secure and healthy future for our children and ourselves.

(Image courtesy futureatlas.com/blog, Flickr)