• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 11 days Does Toyota Know Something That We Don’t?
  • 4 days America should go after China but it should be done in a wise way.
  • 13 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 10 days World could get rid of Putin and Russia but nobody is bold enough
  • 12 days China is using Chinese Names of Cities on their Border with Russia.
  • 2 hours How Far Have We Really Gotten With Alternative Energy
  • 14 hours The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 2 days Even Shell Agrees with Climate Change!
  • 3 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 12 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
Post Carbon

Post Carbon

Post Carbon Institute provides individuals, communities, businesses, and governments with the resources needed to understand and respond to the interrelated economic, energy, environmental, and equity…

More Info

Premium Content

Looming Peak Oil Crisis Means Economic Growth of the Past is not Possible

One has to go back to the 1930's to find a time when so much of civilization was in turmoil at once. The 30's ended with World War II, tens of millions dead, and much of the industrialized world in ruins. It is not hard to argue that the array of economic, geopolitical, and climatological problems currently facing the world add up to an even more serious threat than a handful of hyper-aggressive nation-states did 75 years ago. Our current problems – faltering economies, an out-of-control atmosphere, increasing social unrest, and political gridlock in many parts of the world – add up to a very bleak outlook ahead.

Here in America, there is much denial. With weathermen telling of new disasters every day, the annual budget deficit stuck at $1.5 trillion, unemployment increasing every week and not even a hint of rational solutions to these problems anywhere in sight, we are moving towards the November elections in a dead heat. As the Rockies burn, the corn-belt fries, the east coast melts, and the southwest broils, we continue to pump out greenhouse gases as the only way to keep ourselves employed and our economies growing. Our media continues to craft stories telling us that the weather has been bad before and that there is still no "firm" evidence that the aberrant weather is caused by the burning of fossil fuels.

In Europe and Asia, things are not much better. This summer Europe is having floods instead of drought, but that won't last long and in another year or so their crops will be frying too. A growing number of Europeans are starting to realize that perhaps the new Union has gotten itself into such a big mess that conjuring up loans for bankrupt governments and financial institutions isn't much of a solution. Getting 27 countries to agree on real political union and accepting the debts of others is unlikely to be doable in the time required. Japan's economy seems to be tanking and China seems headed for a bout of deflation as there will soon be few trading partners left to buy their prodigious output of stuff in ever increasing amounts.

To wrap up the gloom and doom, it is clear the Middle East is sinking into a quagmire. The Syrian uprising seems destined to drag on interminably; Egypt is starting to simmer again; and the sabre rattling accompanying the Iranian nuclear standoff is on the rise. The EU boycott of Iranian oil exports is now in full effect and unless the Iranians throw in the towel or can find some clever ways around the sanctions, their economy is headed for the pits. The Israelis continue to insist that sanctions never work and that a dose of strategic bombing is the only sure way to prevent nuclear Armageddon in the region.

So where does our oil crisis fit into all of this? First, ignore the stories that have been filling the media of late as to how there is no longer an American energy crisis. The stories say that the genius of American industry has figured out how to frack so much oil and gas out of North Dakota and other shale deposits that the US will soon be energy independent and exporting the stuff all over the world. Needless to say, numerous people who understand the numbers have torn this cornucopian drivel to shreds as most of these stories ignore or gloss over the 3 or 4 million b/d of new production that must be found each year to offset the declines from existing fields amongst other fallacious logic.

Fracked tight oil from shale deposits will slow the rate of decline in global oil production a bit but will never offset the loss of production from the world's giant oil fields currently underway and likely to accelerate. The problems of fracking and difficulty and expense of producing oil and gas from fracked wells that run dry far more quickly than conventional wells simply will not produce enough oil to run civilization as we know it today. We must look for other solutions and the quicker the better for unless there is record-breaking depression in the offing and the Middle East is settled peaceably, we are only a few years away from much higher oil prices and even scarcity.

For much of the past year global oil prices have been caught between threats of potential and in a few cases actual supply disruptions, and the generally slackening economic growth -- especially in Europe but also in the US and Asia. Lost in this is the recognition that oil prices, which have been close to or above $100 a barrel for the past 18 months or roughly five times the selling price of oil ten years ago is doing to the OECD economies. While gasoline prices have fallen considerably in the last two months, largely due to the Iranians agreeing to resume talks about their nuclear program, great damage has and is continuing to be done to most industrial economies by the high price of energy. Few politicians are willing to discuss in public the toll that $100 oil is taking, and will continue to take, on the prospects for economic growth and increasing employment.

At some point, and that day is not far away, it will be recognized that the economic growth as we have come to know it in recent years is no longer possible and the search for other lifestyles will begin in earnest. Some may even come to understand that the peak oil crisis may already be all around us and we are simply not recognizing it for what it is.


By. Tom Whipple

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Jeremy on July 13 2012 said:
    Ya, but Rex Tillerson of Exxon-Mobile says everything will be fine, all we need to to is adapt...so there!
  • Hans Nieder on July 14 2012 said:
    An alarming headline, with no corroborating evidence; much like the indictment of Geo Zimmerman...
  • SlavaBogu on July 14 2012 said:
    Then there really is no hope, Chicken Little was right -- the sky really is falling! The East Anglia University frauds really were right -- we all are going to broil if starvation from crop failures doesn't get us first. We'd better vote Democrat so Barack (if the name change was legal) or Barry (if it wasn't) can get us off hydrocarbons and onto solar, wind and taxing the rich to finance another stimulus to save us all. Oh, and one more thing -- since in Barry's (or Barack's) words we're no longer a Christian nation, he can convert us in the nick of time to a Muslim nation. The because Islam is the religion of peace and the Democrats have the answers to all of our problems, we won't have to think (it's really hard work anyway) about the absolutely hopeless situation Tom Whipple sees us in.
  • Mel Tisdale on July 15 2012 said:

    There are not, nor ever were, any acts of scientific fraud at The Universtity of East Anglia University. It is an awful thing to call someone who is doing their best to protect our collective futures. For the record, the whole email hacking saga, and the allegations stemming from same, has been thoroughly investigated by several separate high ranking committees and all involved have been exonerated on all counts. The only fault found was that they could have been more open in publishing their data. I suppose an apology would be too much to ask for.

    What really saddens me is that SlavaBogu is far from alone in not bothering to get their facts straight on climate change. The whole false skeptic side of the climate debate seems to be peopled by individuals who will do or say anything to hinder action on combatting it. Look at the above comment by Jeremy quoting Rex Tillerson, CEO of Exxon Mobil, where Mr Tillerson says we will have to adapt. If the level of intellectual capacity behind that statement truly reflects that of a CEO of a multi-national company, I reckon I could run a couple of multinationals working a three day week. The truth is, I suspect, a little bit different. Mr Tillerson is only doing what he is paid to do i.e. protect his shareholder's investments and I could not run a single multi-national company working a 14 day week.

    I do not understand why people cannot see the evidence that has been set out in three IPCC reports, each one being more concerning than the previous one. We are in trouble as a species and it is about time we stopped listening to the fossil fuel industry with its shareholders to protect, scientists in the pay of the former and political commentators with desperate need for advertising revenue to stay afloat.

    Anyone, including SlavaBogu, who has any doubts concerning the science of climate change should visit skepticalscience.com. There they will find the scientific facts concerning all the myths on the subject, including the myth that anyone at The Universtity of East Anglia University committed acts of scientific fraud.
  • Hans Nieder on July 15 2012 said:
    Very well stated indeed, Slava! Mr Tisdale, the "founder" of global warming has publicly stated that he was wrong and that the movement is nothing but fear mongers...

    Without proof, you Enviros simply wish to extend your control over the economy, just like the Communists did..
  • Mr C on July 15 2012 said:
    I agree with Mr Tisdale - but far from using sarcasm and insults to make my point I'm going to use an analogy - Slava, the chances that climate change are caused my mankinds economic activity are around 90%; but let's assume for now they are just 10%. Now, imagine there is a 10% chance that an activity you do in your home would destroy your home - wouldn't you stop doing it? If you would then why is it so hard to accept the 90% chance that high carbon economic activity will eventually destroy biosphere upon which we all (including you) depend?

    And Nieder, why is it that people like you label anyone with a genuine cause for concern as communists - to be fair that's a bit silly really!
  • Hans Nieder on July 15 2012 said:
    Mr C, thank you for stating your unsubstantiated claims, regarding world warming...Rather than point of fact, just say it is my opinion...

    Apparently you either do not care or understand the lost of liberties, both to individuals and corporations.

    Oh yes, tanks to the radical EPA and other local governmental agencies, our God the environment is indeed sightly better off, but the breath of clean liberties and rights have been contaminated...

    You can not have both; and I for one would rather have dirty air than polluted liberties...I can flee the former but not the latter...
  • Mel Tisdale on July 15 2012 said:
    Perhaps I can suggest another analogy to the one offered by Mr C. Imagine that you are captain of a ship, or yacht, and you find yourself with an iceberg dead ahead. Would you refuse to alter course simply because the iceberg is not man-made?

    All the debate about whether we as a species are responsible for global warming, or climate change if you prefer, is a distraction. If people want to believe that it is down to the sun, or the flatulence of the ravenous bugblatter beast of Traal, or whatever, rather than accept that we are responsible, is up to them – it really doesn’t matter.

    What does matter is that we know the planet is warming and has been since the Industrial Revolution. We also know that ‘business as usual’ will sooner or later lead to unbearable conditions for us as a species. We also know that we are pumping greenhouse gasses into the atmosphere and because they are greenhouse gasses they increase the greenhouse effect. That at least is beyond doubt. The science of the greenhouse effect is considered proven by even the most die-hard of deniers. The sensible thing to do is to cut down as much as we can on our production of them so that we can at the very least reduce the rate of temperature increase. If the scientists are right and the warming really is down to human greenhouse gas production, then the warming will cease and slowly the planet will begin to cool to pre-Industrial Revolution conditions. If the scientists are wrong, at least it will buy us some time to work out what is really causing the change to the climate and plan a course of action accordingly.

    Just wringing our hands and saying “It ain’t us wot dun it!” will get us nowhere
  • Bryan Sellars on August 29 2012 said:
    The greenhouse effect has been known since around 1800. in 1896 Svante Arrhenius produce the first theory on climate change. His estimates on the amount of CO2 being produced at the time gave a doubling in 3000yrs and was looked on it as a good thing, seeing it would raise the planet's temperature and increase crop growth, in the 100 years since we have added CO2 about 20 times faster, we are in no-mans land with no idea what will happen, now we have methane escaping from the permafrost and that could be a game changer.

    We have a bigger worry in the oil crisis, not so much in the amount being extracted but in the lowing EROEI, and we have no way of escaping that one, tighten your seat belts for a very bumpy ride.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News