April 04, 2005

Peak Oil..

This actually was going to be a response to what Noah wrote but as I sat down to write it, I realized it would be best if I put it as its own op-ed being that it not only compliments what Brother Noah wrote, it adds to it and makes his point all the more important.

The manifestation of “Peak Oil” is not only a coming reality but we are living through the days that are leading up to it. We should all know that when it happen it will not happen over night, it is going to happen over a period of time and we are living in that time now.

Robert J. Samuelson wrote an article recently about the “The Dawn of a New Oil Era” wherein he makes the case about the coming oil crisis and provides information that supports what Noah has written.

“Americans consume almost 21 million barrels of oil a day, a quarter of the world total of 84 million barrels a day,…”

“But China is now second at 6.4 million barrels a day, and its demand could double by 2020,”

Herein lies the problem, as China’s demand for Oil increase along with India so does the demand on the Oil companies that produce the 84 million barrels a day with only 1.5 million barrels being left in the surplus a day, which means that 82.5 million barrels are used globally every day. China is the second largest consumer of Oil as noted above; they use 6.4 million barrels a day. As of right now China has 20 million cars and trucks on the road; that number is expected to increase to 120 million by the year 2020. That’s 15 years for those who have not done the math. This also means their demand for Oil will double to 14 million barrels of Oil a day minimum and this is just China, this does not account for increase demand around the world in other growing Nations like India. Thus with only 84 million barrels being pumped out a day with only 1.5 million being a surplus, the surplus is immediately whipped away within the next few years and it will get to the point where the world is possibly using upwards of 20 million barrels of Oil a day than can be produced thus the price of Oil will continue to rise and paying three dollars a gallon may be normal in America.

Goldman Sachs is saying that “Oil has entered the early stages of trading that could lead to a “super spike” in prices with the potential to move prices to $105 per barrel.” Other analysts are saying that Goldman is overestimating and that they originally said the spike price would be $80 a barrel. Be that as it may, $80 a barrel would be a disaster and have gas prices upwards of $4 a gallon at the pump not to mention how people who need gas for various things in their homes and businesses.

What ever the case is, we must prepare for what is to come, Oil does not come from a bottomless pit, and the Oil pits are emptying out and we are moving closer and closer to the reality of “Peak Oil”.


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