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09 May, 2009

Peak Oil: Global Oil Production Has Peaked, Analyst Says

If you had told me a few years ago that Peak Oil Theory would be not only getting attention in mainstream circles but actually be the subject of serious debate and discussion on an internet site associated with the Wall Street Journal, I would have said you were as nuts as everyone seemed to think I was for believing in it back then. And yet there it is, in all its glory, ready to slap you hard in the face to wake you from your life-long consumer culture 'myth of sustainable growth' be a good little lemming and buy, buy, buy, borrow, borrow, borrow trance. The question is will anyone pay attention?

What am I talking about, you ask? Those familiar with the concept of Peak Oil may dispense with the following section and skip down to the third paragraph to continue. For the uninitiated, Peak Oil has little to do with actually running completely out of oil (although most people who scoff at the idea seem to have that impression). That is decades away. Rather, Peak Oil represents the moment in time when production reaches its peak and begins down the latter half of the oft cited bell curve, decreasing more and more each year and thus driving the price up as demand exceeds production. Eventually, we begin to eat into our reserves as opposed to adding to them and eventually nothing is left. In the beginning, the price shock will have to be mitigated by releasing part of that strategic stockpile. The last time I checked, we had sufficient supply in our strategic reserves to last close to a decade at current levels of consumption even if we were to run out completely, which is another argument cited by detractors. What they fail to recognize, however, is the qualifier contained in that statement: "... at current levels of consumption...;" the problem being that consumption increases with every passing year, so there is simply no way to accurately judge how much of a cushion we will have to soften the blow. And, the issue is further exacerbated by the fact that currently no technology exists that can give us what oil gives us. None; not solar, not wind. The closest possibility would be nuclear, but that technology has been so maligned that it is, for all intents and purposes, off the table as an option.

Many in the Peak Oil community have agreed that we are already past the peak and what we're experiencing now is the plateau that precedes the sudden drop-off, at which point even the staunchest deniers would have no choice but to admit the obvious truth. And now, here is an article on the Wall Street Journal's own blog site, saying basically the same thing; that non-OPEC oil production peaked in the first quarter of 2007, followed closely in the first quarter of 2008 by production in the OPEC member countries and thus globally.

It's great to see what many called our crazy fringe ideas being examined seriously in the light of day. What a difference a few years makes.

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