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The Peak Oil theory (as explained in this blog's article dated 6th Oct: Calm Like A Bomb Part 2) argues that in the near future, the world is going to face a permanent and irreversible decline in global oil production.
Read the below article which I've compiled from various sources:
The following is quoted from Dr. Schlesinger, the former US Secretary of Energy, Secretary of Defence and CIA Director: "It's no longer the case that we have a few voices crying in the wilderness. The battle is over. The peakists have won." This quote tells us how seriously the theory is taken at the highest levels of decision-making.
Nowadays, we only found three leading and loud opposing voices to Peak Oil in the energy market, namely the OPEC, ExxonMobil and the CERA consulting group. As we can see, neither OPEC nor ExxonMobil are renowned for their scientific integrity and objectivity. Regarding CERA, their predictions in the evolution of oil prices made since 2002, were wrong seven times in a row. In light with these appalling projections, the legitimacy and strength of CERA's denial of an imminent peak are at best mistrustful.
Before going further, aren't their any alternatives? Hydrogen, ethanol or electric cars? Well here the problem comes from timing, as the decline in oil production is expected to happen in 2008 according to the ASPO. A report requested by the US Department of Energy, known as the "Hirsch Report", concludes:
"Over the past century, world economic development has been fundamentally shaped by the availability of abundant, low-cost oil. Previous energy transitions (wood to coal, coal to oil, etc.) were gradual and evolutionary; oil peaking will be abrupt and revolutionary… The world has never faced a problem like this. Without massive mitigation at least a decade before the fact, the problem will be pervasive and long lasting."
Unfortunately, we don't have ten years and world leaders do not even understand the crisis. From this point how is the situation going to evolve? Michael Meacher, a British Labour MP and former Environment Minister identifies the Peak Oil crisis as "an apocalyptic scenario"
A Deutsche Bank paper on oil depletion goes in the same direction: "The end-of-the-fossil-hydrocarbons scenario is not a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously."
To come back to the financial crisis, we have witnessed an impressive fall in oil prices over recent weeks under fears of an imminent global recession. However, the massive US bailout plan and similar European supports to the banking sector are likely to maintain an artificial growth at high costs and to the detriment of states' debts. Once we realize oil demand will not decline and will even continue to grow, as mentioned last week by the IEA, oil prices will once again surge.
Regrettably, when facing the next crisis which is likely to be unprecedented, the world will no longer afford an emergency plan. In fact, the US bailout makes an emergency plan to develop alternatives to oil improbable. We have used our last bullets, and missed the target.
Recent events have showed us how officials and mainstream commentators failed to forecast the current crisis. It is time to finally take the Peak Oil movement seriously, failing to do so would result in a nightmare scenario, Dr. Campbell and others have been desperately warning for too long.
