For decades, the threat of “peak oil” has hung over policymakers of the developed world. The basic premise of peak oil is simple and difficult to argue with: At a certain point, we’ll extract as much petroleum as possible, and after that “peak,” our rate of extraction will inevitably decline. Since it takes so long for petroleum to develop naturally, there’s for all intents and purposes a finite amount of it on Earth. So, our rate of extraction can’t possibly continue rising forever. At some point, we will hit peak oil.
Of course, that’s not the whole theory. Nearly all peak oil theorists argue that following peak oil, chaos will erupt. As so many of our energy needs and products in the developed world rely on the energy produced from petroleum, an inexorable decline in its supply will wreak havoc on our society. This declining supply combined with the rising demand for oil will lead to higher and higher prices. Now, they’re not arguing that the exact moment we hit peak oil will immediately devastate our society or something along those lines. In fact, many don’t consider the actual timing of peak oil to be very important.
However, most do believe that the negative consequences of declining oil production associated with peak oil will rapidly become severe, as the rising price of oil will impact every sector of the economy. Modern peak oil theorists grant that the rising price of oil may occasionally dip as new discoveries are found and more efficient technologies are invented, but they don’t consider either of these periodic drops in the price of oil very important in the long-run. Finally, they argue that peak oil is right around the corner. Are they correct?
(Excerpt) Read more at principlesandpolicy.wordpress.com ...
