No one is going to come out and say, “Guess what? We only have enough oil left on this planet to last another 75 years.” At least no one in the U.S. government or in the U.S. main-stream media. The evidence is there but they try to deny it or only hint at it.
Now of course I don’t know that we actually have 75 years worth of oil left, maybe we have more like 100 years left or maybe only 50. The fact is that we’ve been using oil for 150 years and a lot of signs are pointing to the fact that we have reached or are nearly reaching the peak of oil production. If we continued with the same amount of consumption spread out over the same amount of time, that would mean that we have enough oil to last another 150 years. But we know that’s not the case. Every year we need more and more oil to live the life we want to live.
So where are those hints? Reuters published an article yesterday about the G7 conference that just wrapped up. The body which represents the financial chiefs of the United States, Britain, Canada, France, Germany, Italy, and Japan agreed that “the global economic outlook had brightened significantly”, but as France put it “The principal risk is the oil price risk.” Now why is the price of oil a risk to the future of global economics? Here in the U.S. the industry analysts that are called upon to make a statement whenever there is another hike in gasoline prices often cite increased demand. In fact over the last few months there have been several increases in gas price, and the increased demand of the summer driving season has been regularly suggested as a reason.
Maybe it’s just me. Maybe I’m a crazy or I don’t really understand global economics–and believe me I don’t pretend to understand global economics–but that does sound like a drastic over-simplification of the situation. The kind of “sound bite” material that the American press loves to make use of. Not to mention that I’m not sure that the U.S.’s summer driving season (which if I’m not mistaken we haven’t even hit yet) can be the sole reason that the entire world sees increased gas and oil prices.
It seems much more likely that in addition to increased demand world wide–don’t forget that China and India are rapidly industrializing a large scale–a decrease in the amount of readily available oil, or an increase in cost to get that readily available oil, would be just as much if not more of a factor in the increased price of oil.
Take a look around. You’ll see hints of it everywhere. Today, one day after the G7 conference, Reuters published another article about yet another gasoline price increase. The national average price of gas went up another $0.03 in the last two weeks.