Surfing the Peak
There’s a phenomenon called Hubbert’s Peak, named for the guy who correctly predicted that once the United States had consumed half of its oil reserves, that increasing demand would combine with diminishing supply to push prices steeply upward. From my reading, I have found that this prediction worked out domestically, but the oil prices didn’t shoot up because we have been successful at importing oil from overseas.
The really interesting Hubbert’s Peak, is when the world’s oil reserves will pass the 50% mark, at which point, unless we successfully adopt alternative energy, the oil prices will definitely shoot up a great deal, and they will never, barring a crash in the world economy, come down. I have read in a few places, that most predictions place that between between now and 2025 or so, 2012 seems to be the median. Some good advice I read said not to trust oil company estimates, because they try to over-estimate their reserves to improve their stock prices. There’s a decent chance that we are already at, near, or just a bit past, the peak:
This should come as little surprise, but oil prices just topped $60 per barrel.
While this is the highest nominal price ever, it’s far from the highest inflation-adjusted price; in the early 1980s oil topped $94 in today’s dollars. Still, the recent price runup has been pretty darn steep: the price of a barrel of oil has increased roughly fivefold since the winter of 1998.
So, who knows? At any rate, it isn’t far away, and when we get there, the “car economy” is going to be put under tremendous strain. It makes me feel better, more innovative, you could say, not to mention healthier, because we chose housing near public transportation, and near shopping, so we rarely need to drive. I realize that energy costs will push up prices for everything, so even us non-car hippie types will feel the peak, so to speak, but its nice to know that those of us who want to get ahead of the curve, so to speak, on the downward slope of Hubbert’s Peak, have some options.
Anyway . . . I expect to be paying $3/gallon next year. “And that is just for starters.” Interesting thing about gas prices, Americans pay among the least for gasoline. We don’t have to import as much as other companies and our taxes are lower than most other industrialized nations. Taxing non-renewable resources ahead of time is actually pretty clever, as a nation can use the tax money to build public transportation. The taxes reduce demand for gasoline, and increase the utility of public transportation, making it more sustainable without actually requiring a tax. Because, you see, once the fuel prices rise up, you’ll want to decrease fuel taxes or those who are stuck relying on gasoline will definately be hurting.
America, it seems, well, we so hate to plan ahead. That and we got towelheads to fight. But, I’d like to save up enough cash to buy a house in a nice, transit-oriented city like Chicago, which should do relatively well in the impending post-petroleum correction.