Back to blubber
I haven’t talked about oil in a while, mostly because ever since the ol’ economy took a big shit and died it hasn’t been a big issue - oil consumption drops with other kinds of consumption (fewer trucks delivering goods, fewer people driving and flying around, fewer people heating their pools with a hundred curling irons, etc.), so things have been pretty slow for the past few years. Snazzy graph from EIA:

Nevertheless, though things have slowed, that doesn’t mean our wild-eyed blubberings about peak oil are now completely mitigated. Quite the contrary; the problem was quite real, and remains. I read the other day that when OPEC recently trimmed their output in order to encourage the oil price back up around $100/bbl after it collapsed down to the $40s, the level they ratcheted down to was still an incredible 97% of capacity, leaving a whopping 3% margin of spare capacity - at the low end of productivity.
So we should be expecting news like we got last week from the US military, which announced that it expects a major shortfall in oil production in the next two years, and a serious crisis by 2015. By then, they expect a shortfall of 10 million barrels a day - that is, something like 12% of global oil consumption. As an exercise, just try to imagine the effect this will have on the price of oil.*
We’ll pause to note the irony in the US military - the largest single consumer of oil in the world, at about 400,000 bbl/day - making this announcement. They haven’t announced exactly what they’re going to do about it. Maybe if we fought a couple of more wars it would help. Fortunately, it seems like the economy is going to be lying in the shitter and weeping for a bit longer, which might buy us some time.
In the meanwhile, to make up the shortfall, I advocate going back to doing what we were doing before: sending teams of ferocious, hook-wielding men in boats to kill thousands of whales for their oil-rich blubber. I’ve already done my part by canceling my contributions to Greenpeace.
* Put a few hill giants and evil wizards into your scenario for good measure, just to spice it up.
posted by saurabh in Petrolatum, We're Doomed! | 2 Comments