Will declining oil production plunge our planet into a Depression?
If we were to list the most important issues facing humanity, resource depletion has to be in the top three. Among a long list of dwindling resources, however, declining oil production presents us with one of the most significant challenges.
Oil depletion is not a future event that we can ignore. It is real. It is upon us. The economic and cultural destiny of mankind is inexorably tied to the availability of oil. It is impossible to feed our growing population without ample supplies of petroleum for agriculture, food processing and distribution. Oil provides the raw material for thousands of products, including medicines, clothing and heating oil. It is the only practical fuel for motor vehicles, diesel engines and airplanes.
But the days of surplus oil are coming to an end.
World oil is transitioning from a market driven by consumer demand to one limited by producer capacity. As a result, oil exporting countries are now able to control the price and the availability of an increasingly scarce commodity. Corporate behavior, government action, cultural stability, economics, legal agreements, geography, weather, crude oil transportation, military diplomacy and the always potent combination of religion and politics are now more important than geology in developing oil production forecasts.
Published reserve estimates have a questionable value. There is no compelling reason for producer nations to tell the truth. Even if we find another trillion barrels, that discovery will only serve to delay the inevitable oil crisis. Production disruptions will cause sporadic shortages that alternate with periods of surplus, causing economic and political chaos.
Cultural conflict will be a primary barrier to oil exploration and production. Most of the world’s existing oil is under the feet of a culture that has serious doubts about the industrialized world. Deep seated hatred and distrust have exploded with insidious energy. Islamist extremists believe that their enemy is clearly identified, badly disorganized and endemically corrupt. They obviously understand that oil is a weapon of war. So it doesn’t matter how much oil sits under the ground in some pool of reserves. What really matters is how much oil can we actually produce? And that takes us to Saudi Arabia. And Iraq. The world’s economy, it seems, teeters on the political stability of these two countries.
The approaching oil crisis will have a global reach, impacting the economic and cultural health of every region. However, the energy intensive economies of the industrial nations will suffer the greatest deterioration. That includes the United States and Canada, along with the nations of Europe and the Pacific Rim.
We can either try to manage a “soft landing” or let nature take its course. Doing something means encouraging new attitudes about fuel production and consumption as well as the privilege of parenthood on a worldwide basis. If we do nothing, chronic recession is probable. Economic depression is possible.
Oil, Jihad and Destiny provides a comprehensive examination of oil reserves and production, reviews the cultural challenges of the Middle East, analyzes the economic impact of four alternative oil depletion scenarios, and outlines a proposed course of action to enable a “soft landing”. World oil production and consumption are evaluated by geographic region. This evaluation, along with a projection of how oil depletion could influence inflation, unemployment, economic growth and the price of gas, is presented in 8 tables and 32 charts.
The results? There is not enough oil to sustain the world’s economy. The cost of finding, producing, refining and distributing oil will exceed the price that we humans are able to pay for oil based products long before we run out of oil. The economic impact of this constrained consumption will be devastating. Shortages, whether periodic or sustained, will drive world GDP into a long term decline. Unemployment and inflation will increase. Recession is inevitable. Depression is possible.
Depletion, along with the associated cultural disintegration and political chaos, could easily trigger the four plagues of the 21st century – disease, famine, violence and lethal misery.
What can we do? If oil depletion is one of most important issues facing mankind, then shouldn’t we pay more attention to potential solutions? Oil, Jihad and Destiny examines our energy options and makes specific proposals to facilitate our transition to an alternative energy system. In addition, it suggests the implementation of cultural changes many will consider impossible. Change will require international cooperation – people to people – on a scale we humans have seldom achieved.
If we can’t escape the destructive impact of oil depletion, can we at least mitigate its effects?
We want to ignore oil depletion.
And we will.
Until it eats us.
You will find Oil, Jihad and Destiny at www.booksurge.com and www.postcarbon.org
Ronald R. Cooke has over 33 years of professional marketing and business development experience. He has an extensive background in market research, industry analysis, and strategic planning. Prior experience includes technology assessment, operations analysis, and the evaluation of corporate financial performance. An economist by training, Ron has pursued the study of Cultural Economics since 1969.