Econoclast: Peak Oil

Many of us are slowly becoming aware of such issues as global warming. Some are even taking action on some scale. But how many of us so far are aware of a closer danger lurking in our backyard - that goes by the name Peak Oil?

Though I cannot even hope to convey the breadth of scope and information on the subject covered in A Beginner's Guide to Peak Oil or even the effective alarm signal in Campbell and Laherrère's article "The End of Cheap Oil" (Scientific American, March 1998), the short version is this: at our current rate of consumption vs. available oil we have about 40 years before all of that is used up.
Sounds unbelievable? It is. That's why I encourage you not to just believe it, but to study the links above and judge for yourself. Both draw liberally from freely available sources. As a matter of fact, the 40 years estimate is from a publicly available British Petroleum study with data from 2005: BP oil reports
Just go to that webpage and download the worksheet and look up the R/P ratio at the bottom of the Proved Reserves worksheet. To clear the jargon: R/P stands for Reserves-to-Production ratios that - as defined on the BP site - "represent the length of time that those remaining reserves would last if production were to continue at the previous year's level".

Now, the point made is not that we will run out of oil altogether (though that point is also covered in some of the materials there) but that cheap oil is coming to an end. As I live in the US, I find it useful to know that soon enough I will be paying double what I was paying at the end of 2004 for a fill-up:
US DOE chart of retail gasoline prices
Now, my salary has not doubled since, so that is an issue. Especially if in less than 2 years I can expect to pay twice as much as this year, if things continue at this rate.

If you wish to factor in some more global data and correlate with the price of crude oil (inflation adjusted) study this chart instead. You will see how the current rate of increase is nothing like what happened before in the 70's for political reasons - this present increase is steady, though it could be compounded by current or impending political turmoil (Iran, Venezuela, Nigeria). If you sprinkle in a little bit of natural disasters, for good measure (cyclone Gonu in the Persian Gulf, these days, or hurricane Katrina in the Gulf of Mexico, back in 2005) you get a tasty recipe for even sharper spikes.

Well, let's all switch to hybrid vehicles. Not so quick, grasshoper! How do you think electricity comes about? Best option: natural gas (cleanest and most efficient choice, larger supplies than oil, available from less "politically volatile" suppliers. The same BP report gives it 66 years till exhausted... Hmm, much better than oil...) Next best: coal (twice the CO2 emissions of natural gas, though that does not prevent China from opening a new coal power plant every 3 days). In your spare time, you can monitor the price increases for electricity in the US, and try to map it to the increase in natural gas & crude costs. The relationship is complicated, but the relentless increase is undeniable.

Good thing I know how to ride a horse. Now all I have to do is buy one. It will be way cheaper in the long run...