What Sachs doesn’t dwell on so much is that, due to various supply factors, once we get $100 a barrel oil, it probably won’t come back down that much, contrary to their rosy expectations.
The fallout? Could be serious.
Note well, this will NOT BE a temporary, politically-driven 1970s oil shock. This will be a long-term, chronic problem of petroleum supply. Hubbert’s Peak began as a 1966 prediction by Shell geologist M. King Hubbert that U.S. oil production would peak in the early 1970s.
Actual peak year? 1970.
Recently, some oil industry analysts have applied Hubbert’s parameters and thought processes to world oil production.
THIS YEAR may be the peak year for world oil production. Meanwhile, growing, growing, booming, booming China, India and Brazil seek more and more oil.
That potentially serious fallout? Well, commercial pesticides are made from oil. Ammonia for fertilizers is made from natural gas. Plastics for made-in-China games for your entertainment come from oil. And Wal-Mart’s just in time delivery and low prices depend on cheap semi diesel fuel.
Here’s a kick-in-the-pants essay on just how bad it will be.
Wind power? Solar? Can’t be ramped up that fast and to that big of a scale.
Oil sands? Oil shales? Not nearly the rate of return per production energy invested as oil.
Fuel cells? Current versions are based on natural-gas produced hydrogen.
Biomass? Robbing Peter to pay Paul with natural-gas derived ammonia fertilizers. (Besides, and also apropos of the comment about it above, natural gas may have its own Hubbert in a decade or so.)
More efficiency in commercial transit, along with much more and much better use of rail, along with upgraded rail system, is a small part of the answer.
Conservation — real conservation — is a bigger part.
Ultimately, though, nuclear power may have to come into the mix. But, it has a Hubbert’s Peak of its own of 10-20 years, unless we build breeder reactors.
Read much more about this serious issue at here, here and here.
Especially take a look at this last link, for the website Life After the Oil Crash. It will challenge and scare you even more than the first-linked Rolling Stone article.
Much of what follows below is stimulated by reading from these two sites.
The longer-term future?
Conflicts over oil are certainly possible. Conflicts as in wars.
But, short of nuclear wars, remember it takes petroleum to drive a modern military.
A decline in the U.S. standard of living? Certainly possible.
Right-wing demagoguery exploiting that? Also certainly possible.
The euro replacing the dollar as the oil currency of choice? May happen by the end of this summer.
More U.S. economic backsliding from that? Of course.
And the shorter term?
Emergency oil savings plans, likely including rationing. Although that particular word wasn't used, the general need for oil savings is the siren song of the International Energy Agency, a consortium of energy agencies of First World governments formed in November 1974 in response to the oil crisis as an autonomous intergovernmental entity within the Organization for Economic Cooperation and Development (OECD) to ensure the energy security of industrialized nations.