Saturday, July 16, 2005

Peak Oil

Recently I've been hearing a lot more lip service about "peak oil." It's not difficult to understand peak oil as a concept, and it's much more of an "in your face" threat than the earlier focus on the wells running dry.

What's "peak oil?"

The rate at which our energy "needs"* are growing far outpace the rate at which the infrastructure is being built to supply those needs. And eventually there will be some peak output capability, some maximum rate at which oil can be produced. The theory goes on to indicate that there will be a reduction in oil production after this peak is found.

This is more accurately known as the "Hubbert Peak," after M. King Hubbert who accurately predicted the peak of US oil production far in advance of it actually happening.

Why would there be a limit on the amount of oil we can produce far in advance of the world actually running out of oil?

Well, really, it makes sense from the captitalistic supply and demand model. If you're sitting on the bulk of the world's oil supply, and everybody needs your oil, why invest resources on building up more infrastructure when the current setup is already providing for your needs? Isn't it better to sit tight and let the market demand determine the price? Building up the infrastructure to pump out more oil is just going to cost money and reduce the price of your only product. If you do nothing, the price of what you want to sell is going to keep going up, and it costs you nothing. And it's not like there's a bunch of comptetitors out there waiting to jump in and undercut you.

Even if those people who have all the oil don't see it this way, there are still physical limits on the amount of infrastructure that can be built to get the oil from their door to ours. Whereas our supposed need for energy appears to be an all-consuming, never ending phenomena.

So, what's going to happen?

Well, for starters, you're gonna start seeing prices go up fast. Really fast. And this is going to affect everything that those of us in the so called "first world" think of as our way of life all across the spectrum. As oil prices increase, the cost of producing food increases, the cost of shipping the food increases, the cost of making everything increases. Look around WalMart, Sears, your supermarket: everything that's there is cheap and available because of our access to cheap energy. This is a fact. Maybe all that stuff looks like useless crap, but try and picture living the life you have now with none of that crap even being available.

We won't be able to produce as much food, because we need the oil to create fertilizers, run the huge machines we've built, and ship the results across the country. We won't be able to make most of the things people take for granted in every day life: just think of everything you have that's made out of space age polymers, ie. plastic. We won't be able to find out what's going on, because we won't have enough power to turn and run all of our computers, teevees, radios, etc.
If you rent, how are you gonna keep paying your rent? Because your job is going up in smoke. What jobs are out there that don't require some sort of cheap energy? I can only think of a few, but they're dependent on other people having jobs that require cheap energy.

If you own a home, do you really own it? Or do you really own a mortgage? After your job disappears, who owns your home? The bank? Who owns them? And here's a thought, since all of the jobs out there right now are pretty much based on cheap energy, who is the bank gonna sell your house to in order to recoup their losses?

I'm suddenly reminded of the movie Fight Club, with one of the goals of Project Mayhem being the elimination of the Debt Record. Hmmm, now that idea has possibilities.

So, let's get crazy and say that the government declares a permanent state of national emergency and eliminates the debt record, at least temporarily. So what then? If you have your own home, live some place that has plenty of sun and water available, you can probably revert to a subsistence lifestyle (better order a copy of John Jeavons biodynamic gardening techniques now, before there's no more gas and Amazon can't ship you one anymore).

But what if you live in some colder part of the world, or in suburbia and you paved every piece of growable land, or in a housing project. Well, let's face it, you're screwed. Better move out to the country ASAP. Except they don't want you. You've got no skills that are worth a damn. Oh, your resume may say your a shit-hot programmer, but let's face it, there aren't going to be that many computers running in the long haul, not enough power. Any kind of technical person is going to have to be ready to re-orient their life goals. People who may still be needed: construction workers, carpenters, guys with real jobs. Medical personel. Those kind of folks. The majority of you useless people (techies) are gonna be SOL.


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