If you're not familiar with the whole peak oil problem you may want to read over http://en.wikipedia.org/wiki/Hubbert_peak_theory
and http://en.wikipedia.org/wiki/Hirsch_report http://www.theglobaleducationproject...rgy-supply.php
I know this is a very controversial subject so I'll try to accumulate some facts that everyone can agree on (cause they're facts!) :
- The yield of oil from any oil field does follow something like "bell curve" leaving out variations that are caused by economic/political events. Or even more simple: yields grow, reach a maximum and decline.
- New oil discoveries are declining. Since nearly 20 years annual consumption exceeds new findings. As of now by factor 4. (See below, annual discoveries are grey, the green bars mark big findings, blue line is annual consumption)
- Noteworthy net oil producers like Norway and Mexico have reached their production peak in recent years. The total production by non-OPEC, non-FSU nations is declining. (See http://en.wikipedia.org/wiki/Oil_res...roduction_peak
- Meanwhile, consumption by China and India is growing quickly:
- Consumption by industrialized countries are stagnating on a high level or increasing (US):
So the countries that still have capcities (i.e. KSA, Iran, Iraq, Kuwait) have to make up both for the decreasing production by other countries and an increasing global demand. Given those premises I think its only logic that as soon as one or two of those major players reach their production peak it will no longer be possible to keep up with global demands and prices will go up drastically. Many countries (especially OPEC) keep data about their reserves and such as strictly confidential so its difficult to make any predictions.
Ecologically-motivated scientists including Hubbert himself have falsely predicted the peak to occur several times in the last few year. However some consulting companies that work for the petroindustry predict the peak to occur in the not-so-far future, between 2010 and 2020. Other theories also predict oil production to plateau for some years before declining.
Now I don't think a doomsday scenario as propagated by many eco-activists is probable. There are many alternatives to oil, as a source of energy in general, but also as a portable source of energy. (Hydrogen, natural gas, liquefaction of coal, fast breeder nuclear reactors, offshore windparks, solar energy, bio-fuel, etc.) However I think this will have a tremendous impact on the global economy. Some consequences that come to mind:
- Agricultural products: will become more expensive as modern agriculture relies heavily on cheap, available oil both for machinery, fertilizers and distribution. High prices for food often lead to a declining population.
: When transport costs increase dramatically it will become uneconomical for many products to be manufactured outside the country where they're to be sold. Cheap bycicles from India will be expensive bycicles when they arrive in German or U.S. ports. Even moreso for raw materials, foodstuff, etc.
- Exports of U.S., Japan, Germany and others that produce mainly high-value products may be less affected. They may still drop enough to cause recession.
- Local capacities for steel production and coal clearing might be reactivated because they suddenly become competitive.
- China/India: With less markets for simple/low-price products and less foreign investments, the economic growth of China and India might slow down considerably.
- Industry in developing countries in general: may be effected more than elsewhere because machinery there often has a low degree of efficiency, meaning more oil is used per product than elsewhere.
- Plastics products: will become more expensive too as they're mostly made from oil. Only rich kids will have action man figures.
I'd appreciate comments, especially on the consequences you would expect for your country in particular. Also any thoughts on power politics in such an environment. Or why you think this is all nonsense.