SudoSeth

In the not-so-distant future dwindling crude oil production capability will cause economic devastation on a large scale. This is not what I personally believe will happen, but what could be considered a worse case scenario. Peak Oil is a theory that was introduced in 1956 by Marion King Hubbert that is used to accurately predict the rate of oil extraction of a single oil well, oil field, region, country, and most recently applied to the entire world. Peak Oil is defined as the idea that the rate of oil extraction from a well follows a bell curve, starting off slow when the well is first discovered, rising exponentially as more equipment is used to extract the oil, reaching a peak, and then equally as quickly declining in output due to the increased difficulties of lower pressure, lower quality of oil, and other such issues. This is a proven concept on the individual oil well, field, region, and nation oil production level.

For the purpose of this essay it is assumed that the theory of peak oil applies to global production rates as well. It is a common misconception that reaching peak oil means that the world is running out of oil. In reality, that is far from the truth. Peak oil simply means that the maximum production RATE of oil has been reached, and then irreversibly declines from that point on. This would have a disastrous effect on the world.

It is common knowledge that almost everything that humans do in the western world depends heavily on fossil fuels, and oil in particular. Even relatively small changes to the ratio of supply and demand can have huge effects on the cost of oil. Hurricane Katrina is a prime example. For several weeks key oil refineries in the Gulf of Mexico were shutdown, which decreased gasoline supply in the USA by several percentage points. As a result, gasoline and diesel prices around the country increased, in many places, dramatically. Running out of gasoline was not the problem (in most areas); it was the increasing cost of gasoline that was the issue.

At this point I’m going to begin my speculation. Based on the previous information I am going to extrapolate one possible outcome. The year is 2015 and although the global economy has been struggling to recover from the American financial crisis of 2008, life has been continuing more or less, business as usual. Crude oil prices have recently sharply risen due to a particularly cold winter, but nothing is really out of the ordinary. Spring comes and goes, but oil prices continue to rise. As the summer driving season begins oil prices set new records, beating out the previous highs of $150 per barrel set in 2008. Many families cancel summer vacations in order to save money.

The fall season has arrived, but oil prices are begging to rise at increasingly rapid rates, and most people are not sure why. People are driving less, there haven’t been any natural disasters of consequence, and the weather is mild, and yet still oil prices continue to rise. Most of the population still has no idea as to why prices continue to climb.

As the winter comes, things take a turn for the worse. It is now known that the reason prices are rising so quickly is that although global demand for oil has slowed in growth over the past year, oil supply has fallen from the year before. In particular, several key oil fields under OPEC have cut oil production rates after maintaining them at constant levels for the past two years. Global supply of oil has only shrunk 5 percent, but that was enough for demand to outstrip supply. This has the immediate effect of raising gasoline prices, but it also has many deeper reaching effects. Food prices will increase dramatically because the oils that fertilizer is made from have increased in cost. Transportation cost for everything from t-shirts, to building supplies, to food at the supermarket have skyrocketed due to rising diesel prices.

As time passes prices for all goods begin to increase as the cost of oil derived plastics, Styrofoam, and even medicine begin to feel the pressure from crude oil prices. The United States decides to take military action in the middle east in order to “spread democracy” and “liberate the local population”, while in reality is only interested in securing oil supply to itself. The action backfires and a shipping port is destroyed, cutting off a major trade route and further reducing the oil supply to the world, because most oil is transported by large ships. If the tanker ships can’t reach a function port to be filled with oil, then there is no way to transport the oil from the Middle East to other countries. What ports remain are stressed to the breaking point in order to keep up with demand.

Due to the further reduced global supply of all sorts of goods, the middle class struggles to stay functional. Some people resort to crime, stealing food from super markets, robbing gas stations late at night to get free gasoline, trucks and SUVs sit parked in driveways with empty fuel tanks. During the coldest parts of winter there is no longer any source of affordable heating oil, causing extremely cold conditions in northern regions. Soon mobs form, robbing downtown areas for much needed supplies. The government and police step in to try to contain the situation, but are stretched very thin themselves due to insufficient fuel budgets. Small unprepared police departments are soon overrun and a sense of lawlessness ensues. Governments are virtually powerless to help, immobilized by their un-prepairdness. As the winter nears its end, gasoline becomes so scarce that it is difficult to find a functioning gas station. Economies worldwide come to a crashing halt. These conditions could easily lead to war as countries try to fight for the few remaining large oil fields.

Whether these dire events actually take place in the manner previously described is up for debate, and should most likely be taken with a dose of salt, but the point illustrated remains valid. If even small disruptions in oil supply can cause gasoline prices to rise dramatically, peak oil occurring in an unprepared world could cause disastrous results.

College essay, peak oil