Looking back through human history, there has always been insights on the horizon before any major change or upheaval. The massive increase in population and industry since 1965 is arriving at a time when the amount of oil available and reduced over the same period. Another insight, almost certainly!
Imagine, If you had to travel from John ‘O’ Groats to Lands End on half a tank of fuel. You know that once the fuel gauge hits empty, then you will have to walk the rest of the way. With this in mind, would you, ease off the accelerator and conserve your fuel for maximum efficiency or hit the throttle harder and rush to your destination without care?
This situation is what humans are doing with oil. Since the 1860s, global oil production has steadily grown until its peak production year in 1965, where year-on-year the trend has steadily dropped for new worldwide oil field discoveries.
The simple fact is that oil’s story’s intertwined with our modern lives, and both ruled by the laws of common sense. Which begs the question, have we all lived through humanities peak and worse, not appreciated the fact?
- In the early baby years the rate growth is quick, but its true potential has yet realised.
- Throughout childhood, the number of skills or in oil’s case the number of its uses quickly builds up, and growth spurts within the wider economy quickly become regular occurrences.
- The teenage years of oil production are filled with building friends further and wider than has been known before. The industrial revolution is now in full swing, and everyone globally wants some of the action.
- Throughout the early and middle ages of oils production lifespan, the possibilities seem endless. Some might even say we could even reach the moon with our new found confidence.
- Middle age quickly and unexpectedly sets in, and like the peak of our human health, so too does oil productions healthy outlook seems downhill.
- The later years are now becoming increasingly expensive to maintain the norm. The simple things once taken for granted are now harder to achieve like staying warm. The youthful years of continued growth are nothing but a faded memory.
We are whether we like it or not, in the mature stage of our oil production lifespan. Just like the quest for eternal youth, the quest for endless oil supplies will end the same disappointment.
The chemistry and geology of oil formation are now so understood that the likelihood of any new large-scale oil well finds so stark. Oil’s found in sedimentary basins of ancient seas and lakes.
The remnants of the micro-organisms and the geological coincidences come together to cook the resulting sludge into oil and thus creating exploitable reserves, which we now know are rare.
In comparison, the additional demand put upon that steadily reducing the trend of fresh oil discoveries has grown exponentially year on year culminating in the Chinese and Far Eastern economic booms of the last ten years. A final growth spurt for humanity before the inevitable decline of supply.
The amount of oil now being discovered is lower than at any point in history, and the world economies are running out of spare capacity for emergency situations. As an example, during the Hurricanes Katrina and Rita, the world oil markets quaked after the US lost 30 per cent of its refinery and storage capabilities.
Typically this wouldn’t be an issue. However, this time worldwide oil production rate through higher demand was already at stretched capacity. Exponential growth is unsustainable in oil, and as has been proven since the 1950s by Marion Hubbert a brilliant Texan oil geologist, the trembles of a full-blown oil supply shocks are imminent and predictable.
Annual discoveries of untapped oil fields represent a third of our yearly consumption barely! Now either oil companies and governments are living in a cloud cuckoo land or privately concerned. Many suspect the latter to be true.
The public impression they give is that oil production can be held at its present level for over forty years and will collapse to zero in a single year, but this is technically and blatantly wrong. The peak will come long before the decline for the simple reason that all oil fields large and small decline gradually. Factor in the growing demand from the Far East and an apparent discrepancy in official rhetoric becomes obvious.
Just like the speeding car analogy, our governments have decided to keep the foot hard down on the accelerator rather than risk losing elections by confronting and acting on common sense and science. Whether by design or delusion, we are all speeding towards a destination which nobody wants to admit exists.
People around the world are preparing long-term unlike our politicians who incapable of seeing past the next election. Will expanding oil use, human populations or financial bubbles, growth can only rise, peak and decline? Suddenly and unexpectedly, just like your car running out of fuel!