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: (more…)