The Oil Drum: Money and Peak Oil Article
I just came across an excellent article in the Oil Drum that discusses the connections between oil production and our debt based monetary system. See here: http://www.theoildrum.com/node/5160
As we saw last summer, stagnant oil production and rising prices helped to push our economy over a cliff. Now, the article speculates a deflationary type path in which massive dislocations in global trade might be sufficient to drop oil production to very low levels prematurely. It certainly has some good points worth considering.
This is my current feeling on Peak Oil.. it may never truly come to pass. It seems we are much more quickly and helplessly entangled in the breakdown of our financial labyrinth than the "fits-and-starts" that a bell-curve decline in world oil production would theoretically produce.
Agree. This is an excellent article with many of the comments sections as good if not arguably more insightful. It frames the Energy, Finance issues w/r/t Economy particularly well. Encourage others to spend the time and read. The Oil Drum web site is first rate.
One interesting thing that was only briefly mentioned in the article is the concept of war. If oil production were indeed to fall to 20 million bbl/day, then there would be a lot less oil for food and hungry people around the world would be far more inclined to make war over it.
Another thing that I don’t think I saw in the comments or the article is the next system. Our leaders behind the scenes are not so dumb as their actions sometimes betray. They’ve known about peak oil for a while now and I’m honestly surprised they have not tried to implement another system. Perhaps there is a short term reason for sticking with the present system (the Treasury continues to enjoy low interest rates???). But I’m sure there is a replacement system being discussed right now and it will probably be handed to us at a frantic moment a la Henry Paulson and the first bailout. Hopefully our elected officials take the time to read the provisions before voting, but I suppose this is asking too much of them.
I was reading this article last night too. It seems to indicate one scenario for peak oil may be that oil production peaks not due to geological limitations but due to economic conditions and credits limitations in a debt based economy.
It’s still not clear to me which comes first: declining oil production and high prices or economic downturn; i.e., the chicken or the egg. In actuality, oil and the economy seem to have a complex interdependence.
There was a good article last week on US petroleum demand:
This chart from that article seems to show demand was already well down in the beginning of 2008, perhaps reflecting the economy already in recession then though it wasn’t widely acknowledged until late in 2008. The big drop in summer 2008 was due to high gas prices and less discretionary driving.
Man thats worse then even the baddest doomer situation i’ve seen. If oil production dropped to like 20 mill (or even say 30-50 mill) by 2012 the biggest famines humanity has ever seen will quickly appear. Well time to keep preparing.