The Upcoming Oil Crisis

I am going to start a new series of blogs on this subject and may even start a new blog on it. I am really getting concerned to the point of having it shadow everything else to do. Our civilization is slowly running out of oil. I just hope that this current runup of gasoline prices is not the start of what the oil experts call the "Big Rollover", the point at which demand for oil exceeds supply.

Today I will summarize the problem and show a scale from 0-10 on which people who talk about the oil situation can be rated in terms of optimism and pessimism. The first thing to note is that there is only a finite amount of oil on this planet, and that it is not renewable, since it takes a million times as long for this planet to develop oil as it takes for humans to use it up at our current rates. Further, the development of our current standard of living seems to be mainly a product of oil; so much so that we may want to call the period from 1900-2050 the Oil Age. This age will contain my entire lifetime.

Now for some figures. According to the World Almanac, which gets its figures from oil companies and oil-producing nations, there are one trillion barrels of oil on this planet right now; a barrel is 42 gallons. The world is currently using oil at the rate of 80,000,000 barrels of oil per day, or 30,000,000,000 barrels per year. A simple division yields 33 years. It's not that simple. As oil is taken out of the ground it gets harder and harder to get the remaining oil. The amount of oil that a well is capable of getting out in fact goes down exponentially with time. For this reason, production of oil can increase only to a certain point, and then it must decline, even with plenty of oil in the ground. The point at which this is reached is called "Hubbert's Peak". The United States reached its Hubbert's Peak in 1970, and after that we had to import oil. At the same time, demand is rising exponentially, currently at about 2 percent a year. Sooner or later, supply will fall behind demand, and then prices will go up hyperbolically, an event called the Big Rollover. This will cause a severe jolt to our civilization, and the pessimists are predicting no more driving, political upheavals including possible catastrophic wars, starvation, blackouts, and possibly up to 4 billion people dying off.

So we go to other fuels. The problem is that this may be difficult or expensive, despite the fact that more energy hits the Earth from the Sun each day than is in all the oil that ever was, is, or shall be on this planet. Natural gas will peak shortly after oil. Coal will last a while but its use will seriously pollute the planet. Going nuclear will increase the chances of nuclear weapons getting into the hands of terrorists. Hydrogen seems a way out. It is like fossil fuels such as gasoline, but without the carbon. Already we can make a hydrogen or fuel-cell powered vehicle. But where do you get the hydrogen? Getting it from a fossil fuel would defeat the purpose of using hydrogen. It will have to be obtained from water by electrolysis, and that requires energy, which will need to come from the Sun. Already there are solar-powered electrolysis plants built, but this still remains a method with a lot of problems. The optimists are saying that we will convert to these and this will ease our transition from oil. The pessimists are saying that all of these will fail.

So which is it? I will write about this for a few days, but I am going to provide here a scale from 0 to 10, with 0 being the most pessimistic and 10 the most optimistic. Here are my guidelines:

10 - Oil is a renewable resource.
9 - We will run out of cheap oil well after 2050 and we should be on other fuels by then
8 - We will run out of cheap oil around 2035 or so and with some effort we should get through OK
7- We will run out of cheap oil around 2015-2020 and this will cause a serious crisis, but we will get through OK with other fuels
6 - We will run out of cheap oil next decade, causing a serious crisis, and it is probable, but not certain, that we can develop other fuels
5 - We will run out of cheap oil next decade, causing a serious crisis, and it is not certain if we will get through it.
4. - We will run out of cheap oil within about 10 years or so, causing a severe crisis, and it's probable that we will not be able to get through it.
3 - We will run out of cheap oil in about 10 years, and we will probably wind up with a serious deterioration of our style of living
2 - We will run out of cheap oil in about 10 years, and this will cause many calamities, such as famines, wars, and blackouts.
1 - We will run out of cheap oil in about ten years, bringing us back to the 1700s and causing 4 billion people to starve or be destroyed by nuclear war.
0 - We will run out of cheap oil soon, causing the human species to become extinct.

I feel that I am a 6 on this scale. So I think we are headed for a serious crisis. One thing working in our favor is that we will be entering a Fourth Turning, the time in which people take on crises and solve them. Here is how I rate other authors: Vijay Vaithyswaran, 8; Kenneth Deffeyes, 3; Colin Campbell, 2; www.lifeaftertheoilcrash.net , 1; http://www.dieoff.org , 1; Paul Roberts, 5; Jeremy Rifkin, 7 (although he sounds like 3 in the beginning of Hydrogen Economy), Goodstein ("The Party's Over"), 4; Heinberg, 2; the US Government, 8; Kiplinger (letter and magazine), 8. In future blogs, I will go in to more detail on these items. What I would like to empathise, though, is that this will be a crisis, and like the Chinese ideogram for this word says, it will be a time of danger and opportunity.

It is now too close to call

Up to now I have been saying that Bush will probably win election this fall because he has lost only 4 Lichtman keys. A while back I said that Bush may lose Key 9 (Scandal) but he probably would still be re-elected, since he still will have lost only 5 keys.

I now say the election is too close to call. It has been behaving that way for a while. A look at Rasmussen Reports shows that for the past few months, Bush and Kerry have been running neck and neck. The graphs of their percentages intertwine with each other like a braid. But it is not the polls primarily that make me say that it is too close to call; they are almost meaningless at this time anyway. No, what's happened is that three of the keys are so shaky that is probable that one or more of them will fall by Election Day, and if two or three of them fall, Bush will be defeated. These are the Short Term Economy Key 5; the Scandal Key 9; and the Foreign or Military Success Key 11.

Short Term Economy. The economy has been perking up as of late. The stock market has been going up and companies are earning more on their bottom lines up front. It seems now that the employment rates are picking up. However, a Rasmussen poll shows that a substantial portion of the American electorate think that we are in or about to head into a recession. If that's the case, the key falls, since what people perceive, not what is in some table of statistics, is what matters with respect to the economics keys. Further, there are trouble signs ahead. The price of gasoline keeps going up and up and up, and I feel that it will go up until people stop demanding it. Since people feel they have to go to work and so forth, and since they feel that $2 and $3 /gallon gasoline won't bother them, the price is likely to exceed $4/gallon. That will certainly hurt the economy. And there is the threat of higher interest rates and the ballooning federal deficit. To me this points to a possible setback in the economy, one which may cause Key 5 to fail.

Scandal. The pictures keep coming and coming and coming. Each new prison abuse scandal picture raises questions and keeps the scandal alive like twigs being added to a fire. A few down the line are being punished, but it seems to me that this scandal is going to affect the higher-ups. Sen. McCain says that the administration should not let it dribble out like this and should come clean with it all. But the clincher is Lichtman himself saying in El País that "Rumsfeld…is a political corpse." I.e., we may have bi-partisan criticism of the scandal and high officials about to leave. This would constitute scandal as far as Key 9 is concerned and would cause the key to fall. I said earlier that it has fallen, but I now see that people need to perceive of it as a major scandal, and this may not have happened yet. But if things continue like they are, it will.

Foreign or Military Success. It seemed at first that Bush earned this. He got rid of a cruel dictator and was going to make it easier for 112 billion Iraqi barrels of oil to get onto the market. But now the perception is that we have gotten into a quagmire instead. This together with the prison scandal may take away this key; Lichtman has expressed some hesitation now as to whether he has this key.

In summary, all three of these keys are shaky indeed, and it seems probable that Key 9 will fall. To me it now seems possible, but not certain, that two or three of these keys will have fallen by Election Day, and if that happens, Bush will lose. Of course if only one of these keys fall, Bush will win. So it is my opinion now that the election is too close to call. Further deterioration of these key's positions may lead to my calling the election for Kerry.