Posts tagged peak oil

The message you get about petrol prices is that the prices are unsustainably high these days and the government should do something about it until they get back to normal. 

Here are the facts. Check this website. Brent crude prices have been steadily increasing for the last twelve months.  Today’s price of $116 is only about $3-4 above the trend line. I can’t tell you what will happen to crude prices in the short term but todays price is not atypical or exceptional.

However I can tell you what will happen to the crude price in the next 5-15 years.  It will skyrocket to the point where $116 a barrel seems unbelievably cheap.  Why? Because the reserves of oil are being used up and sometime in the next decade (or two at most) production will peak and start to decrease. 

What happens to the oil price when demand increases (by about 1million b/day per year) and supply starts to decrease? The price will go through the roof.  

But, it is no problem really. We just need to anticipate the issue and plan for it by buying more fuel-efficient cars, developing alternative sources of energy and so on.   It is not rocket science. Unfortunately as the crisis stretches beyond the next parliament it is totally off the agenda as far as politicians are concerned. 

Guys. We need to do something about this now!