High Gas Prices: Everywhere you go in the Verde Valley I hear people complaining about how the public is being fleeced by the oil companies.
I thought some different perspective on the subject might be in order. First of all, who am I to be making these statements? I am not an expert in the field of global oil production or an economist. What I have to offer is the statements of leading geologists, scientists and economists who are studying the whole global energy crisis. I know most of you will not want to hear this and many will create any excuse not to believe it. That’s OK, I am only the messenger.
Peak Oil is a geological term that refers to the top of a bell curve on a graph or chart. In this case, the graph pertains to world oil reserves and production. For instance, on the up slope of this bell curve oil is cheap and abundant; on the down slope oil production drops and the cost of extraction climbs as expensive methods are applied to obtain the residual oil.
Eventually, the cost of extraction becomes greater than the value of the oil remaining and the wells are no longer viable. For the last 150 years, we have been moving up the up side of the bell curve of world’s oil reserves. The first commercial oil well was drilled in 1859. The world only had 1 billion people and very little industry compared to today. The world used very little of this precious energy then.
In 2004, we have 6.3 billion people on the planet and every aspect of our modern life is sustained by oil's energy. Food, water, transportation, healthcare, economy, industry and shelter; all the essences of survival for our civilization depends on oil.
The amount of oil needed today to sustain our world’s ever growing population and industrialized growth is exceeding the production of this energy.
So when will we hit the peak of world oil production? The government says optimistically in 2020. The geologists and scientists say between 2004 and 2010. Princeton’s Professor, Kenneth Deffeyes, author of Hubbert’s Peak, points out the fact that world oil production peaked in 2000 and has steadily declined every year since. It is a highly complicated issue. No one knows for sure whether or not oil production will ever peak again. What is known is that we have either surpassed the peak or we are close to it.
Is the world out of oil? No, but as the world’s oil reserves are at the peak or on the down slope we are certainly out of cheap oil and that is what we are seeing at the pumps. I predict that gas prices will fluctuate for political ill-gotten gains, but in general we are going to see still higher and higher gas prices. Oil is becoming a finite resource.
So, how come we haven’t heard about this in the news and from our politicians? That’s easy to explain. The five major media groups are very heavily vested in the stock markets. This news will have negative effects on the world’s financial markets and their vested interests.
As for the politicians, I guarantee that they are all well aware of Peak Oil as there were many government energy experts who attended the Paris Peak Oil Conference in May 2003. No politician wants to be the bearer of bad new in an election year, especially news that will have such negative ramifications on the economy and the American way of life.
The fact is we were warned about Peak Oil 30 years ago by the “Club of Rome.” Remember the 70’s. Turns out they were right and we wasted 30 years not investing in a sustainable alternative energy infrastructure.
George Bush’s Energy Advisor, Matthew Simmons says, “The situation is desperate. This is the world’s biggest serious question.” Matthew Simmons also stated “Without energy, we have no sustainable water, no sustainable food, and no sustainable healthcare.”
Secretary of Energy, Spencer Abraham said, “America faces a major energy supply crisis over the next two decades. The failure to meet this challenge will threaten our nation’s economic prosperity, compromise our national security, and literally alter the way we lead our lives.”
The Saudi’s have a saying, “My grandfather rode a camel, I drive a car, my son flies a jet airplane and his son will ride a camel.”
Anyone who thinks about this for two minutes will see that high-priced gas at the pumps is the least of our worries. Peak Oil also explains so much about the craziness that is going on in the world today.
Oil companies are downsizing, merging and out-sourcing. They have cut funding for oil exploration and plans to build further needed refineries.
Check it out for yourselves. Just look up Peak Oil on the Internet.
Dennis Renner is a resident of Cottonwood.