Peak oil

From Wikireason

Background information

• Wikipedia:Hubbert peak theory
• Wikipedia:Oil reserves
• Wikipedia:Image:Hubbert_world_2004.png - Graph claiming oil production outside OPEC and the former USSR has already peaked
• Wikipedia:Image:TrendLinesOilDepletionScenarios41211.png - Graph showing various projected trendlines
• Wikipedia:Image:ASPO 2004.png - Graph showing one projected world production peak, by region
• High Cost of Crude Drives Up Prices at the Pump (20 April 2006) - Gasoline hits $3/gallon in Los Angeles
• Wikipedia:Energy crisis

History:

• Wikipedia:1973 oil crisis
• Wikipedia:1979 energy crisis
• Wikipedia:Oil price increase of 1990
• Wikipedia:Oil price increases of 2004 and 2005

Arguments

1. The world's annual production of oil is increasing, but the increase is slowing. Soon it will stop increasing, and start decreasing.
2. Demand for oil is continuing to increase.
3. Long-term price increase trends for oil and derivatives like gasoline in 2004-06 are fundamentally caused by increased demand without corresponding increases in supply.
4. The long-term trend will continue. In Western countries, the average inflation-adjusted cost will soon surpass those experienced in the 1970s oil crises.
5. Political and economic changes are necessary to speed the adoption of alternative fuels.
6. Failure to change will cause prices to increase enough to cause serious economic disruptions.
7. Failure to change will cause actual shortages which will cause even worse economic damage.

Counterarguments

1. The free market is the best mechanism to deal with this problem.
2. Price increases will automatically spur investment in new energy technologies, both from alternative sources and more efficient fossil fuel extraction.
3. Price increases will automatically provide an incentive for energy conservation.

Remedies

• A reasonable target would be for developed countries to stop increasind in domestic demand for oil within the next ten years (by 2015).
• Ratification of the Kyoto Global Warming treaty by more countries.
• Developed countries should subsidize development of alternative technologies in developing countries.
• Developing countries should adopt the stricter environmental standards of developed counties, to avoid repeating the historical mistake of building an economy dependent on fossil fuels.
• Allowing free-market mechanisms to work the problem.