Seeing as it has been exactly 2 months since my last update, with a dash of having else to do at 1 in the morning except be bitter and cynical, I have decided to talk about something that has been on my mind recently. Go figure, a 21 year old who thinks about peak oil, no wonder I’m single and forlorn.

But how to suck you, the reader, into this article with a clever hook. Dare I say we are on the brink of the collapse of global industrial civilization as we know it? I guess you’ll now have to read on…

First of all, allow me to say…shut up, just shut up and stop talking. From the guy who cuts my hair, to the anchors on CNBC, to family and friends, to the politians, none of these people have it right. None of these people really understand what is going on with oil. The most commonly used explanation for these higher fuel prices is that Exxon Mobil and Shell are evil greedy corporations that jack up the price of gasoline to increase their profits while simultaneously burning down forests on a whim and killing bunny rabbits. The second most commonly used explanation would be that OPEC, or rather, those dirty Arabs, purposely keeps oil production low to inflate prices. These are both wrong. OPEC is also not just made up of only Middle Eastern countries.

The problem lies in this mystery term of “peak oil”. But what does peak oil really mean? It is the exact moment where maximum global oil production has been reached. That is to say, the amount of oil under the ground is not the determining factor in prices, so much as the rate at which we get it out of the ground in relation to how much demand exists for it. Think of it as a bottle neck, it doesn’t matter how much you may have in the bottle, only how much can come out of the neck. So now that we have that sorted out let’s continue onto some statistics that you can either accept or deny.

There is roughly 1.255 trillion barrels of proven oil reserves left on the planet.
Demand is currently 85 million barrels per day
Demand will be 98 million barrels per day in 2015
Demand will be 118 million barrels in 2030

There are other non-conventional sources for oil, and there will be discoveries of new and conventional oil fields. In 2000, according to the U.S. Geological Survey estimated the world contains 3 trillion barrels of oil with only 2.3 trillion having a 95% chance of ultimately being recovered, factoring in the other 700 billion barrels would be technologically impossible to be obtained or just too expensive to be worth it.

So the end of oil in inevitable, with increasing levels of demand (a 38% increase in 22 years), the total pool of oil will dry up within a century. Ultimately that is far away and our prices are going up right now, so that’s what we have to discuss. That 38% increase in global demand in the next 22 years is the real killer, that’s the downfall of life as we know it. It’s not even the U.S., the king of fossil fuel consumption by far, that is causing such a jump in demand. All of those pesky third world nations are finally industrializing like whoa. I’m aware saying “like whoa” has destroyed my credibility but I couldn’t help myself. For example, India’s oil consumption is expected to triple in the next 10-15 years.

Now the next important question is when do we hit peak oil? Pessimistic estimates say we hit it 3 years ago, but the general consensus is that peak oil is anywhere between right now and 2010. So if our oil production grows at 0-1% by 2030 and demand has grown 38%, that means a lot less oil to go around which means dramatically higher prices.

It seems that no one wants to believe it, that oil companies sat in wait during the 80’s and 90’s with incredibly cheap gasoline only to finally give us the business end of a giant price hiking dildo in the last 7 or so years. In the last 6 years the price of oil has gone up over 500%. That has translated to gasoline prices hovering just below $4/gallon in most of the United States. But as demand globally continues to rise rapidly and conventional oil fields dry up or go into production decline, prices are going to go even higher, fast.

You can pretend this isn’t happening, but it is. Oil sits at $124/barrel and is poised to advance to $200/barrel within 2 years. This will translate to unleaded gasoline being $5.60/gallon. Within 5 years gasoline will approach $8/gallon. The U.S. uses 20 million barrels of oil A DAY. Nothing is going to save us from this collapse. $8 gasoline will equate to unprecedented inflation, food prices spiking, and a long term economic depression. Petroleum isn’t just a source of fuel, it’s a source for the plastics in bottles and computers, it helps heat homes in the winter. It is in every facet of our society and it’s inescapable. In 5 years it is going to cost people around $100 to fill their gas tanks, and most people go through a tank a week.

So you see, this has little to do with us, blame the third world and blame your politicians for not implementing alternative energy strategies earlier. It’s honestly too late. To have transitioned out of this without harm would take about 20 years, and now the presidential candidates are talking about it. It’s all quite funny because it doesn’t even matter what we do as a country, we are not the ones who are sucking up excess supply, that is China and India.

My advice to you all is to buy a Prius, a gun, and take some money out of your mutual funds because we’re going to be taking an economic hit here very soon.

Oh yeah, and here’s a chart of all major non-OPEC oil producing countries. According to this, we have already hit peak oil in most of the nations on the planet.