For the last few years, I've been studying our modern society.
It basically just continues to amaze me. Society has come a long way in the last 100 years. In this twenty-first century we are living in, life is just about perfect. The level of comfort we are experiencing everyday is mind-boggling. Think of all the modern technology and science around you. The stuff you own and use everyday; Internet, plasma TV's, SUV's.. Think about the enormous houses we live in, featuring everything to make life easy as hell every single day. Air conditioning, refrigerators, heating, flowing water, garbage disposement, big basements full of food,. Hence, if you're not happy with the way you look, you can get a total makeover thanks to the wonders of plastic surgery. Most of these luxuries weren't available 100 years ago.
Even more amazing though, is the fact that we take all of these things for granted. It's like we feel we have the 'right' to live this way.. Answer these questions though: Are you happy these days? Are you satisfied? Most likely not. The human race will always find something to complain about. It's in our genes. We whine about the fact that our neighbor John just bought a Corvette and that we cannot afford that. Instead, we have to drive in this stinky, 4 year old mustang. Just to make things worse, the same neighbor just got an enormous 30 inch computer screen!! I have to play my computer games on a 17 incher!!! Life just isn't fair! Now is it?!
Not only do we see the way we are living as 'normal', we actually expect life to be twice as good in say 25 years. For this to happen, we believe in the promise of technological progress. There's a slight problem though. The advancements made in industry and technology over the last 100 years and the luxury we enjoy every day, have been made possible by one thing and one thing only..
Cheap energy.
OPEN YOUR EYES
I encourage you to do the following: Go outside and go sit on a bench in the centre of your city. Now look around and watch what everyone is doing. Open your eyes. Just ask yourself these questions: What makes it possible that we do what we do? What makes us have jobs? How can we buy anything we want? What powers all the conveniences in my house? What makes my car go around? What makes the water flow? Why are the Walmarts always full of food? What is this magical thing? It's energy. Massively available, cheap energy. Now, the big thing here is that this cheap energy won't be here for too much longer. Our modern society is at a turning point.
OIL
The world had a total reserve of 2 or 3 trillion barrels of conventional oil in the ground when we started drilling the first well. We have used about half of it at a current rate of 28 billion a year. No need to worry right? The glass is still half full!
Before oil can be produced it has to be found. There won't be many people who will disagree here. Most of the biggest oil fields were discovered more then 40 years ago. Over the last decades there were less finds year after year. It is now widely acknowledged that about 95% of world's oil reserves have been found.
Since Oil-discovery reached a peak, it is inevitable that Oil-production will reach a peak too. This peak is expected when about half of the reserves are used up, which is about right now. The irreversible decline in production is expected in the next 5 - 10 years. Natural gas will follow soon after that. These resources combined, account for about 75% of our cheap energy. Cheap energy is essential for our western economy.
WHAT DOES THIS MEAN FOR SOCIETY?
Good question. It's very difficult to predict a future scenario. The first signs are already there though. Oil has been making the headlines quite a bit in the last few months. Oil-supply has gotten extremely tight. Production has a hard time keeping up with demand. This results in higher oil prices. OPEC has promised to increase production somewhat, but this will only ease things short term..
Basically, once oil peaks, production will decline 2% or 3% on a yearly basis. On the other hand, demand for oil is expected to rise with 2% or 3% per year. This will result in a 4% short-come just a year after the peak and will rise to a 15% - 20% gap in 5 years.
This means there will be less energy available for everything we do. Less energy for the industry, less energy to heat our houses, less gas for our cars, and last but not least, less energy to produce food. 17% of our energy is used for producing food. We use oil for fertilizers, pesticides, packaging and distribution of the food.. As a result of rising demand and declining production, the price of crude oil will rise significantly. This is basic economics. It's not unreasonable to imagine a barrel of oil trading for $100 or higher by 2010. This translates to paying $5 - $10 dollars for a gallon of gas at your local pump.
Not only the cost of oil will rise though. Food-prices will double, as oil is used for fertilizers and because there's energy involved in the process of growing food. Industrial goods will become more expensive, because oil is the primary material for plastics and such. Costs for Medical care will rise.. basically everything will cost you more.
As a result of this, inflation will skyrocket. We already see this happening. The fed is creating more and more money (M3) to power the war in Iraq and to push economical growth. This results in inflation, because money loses value when there's more of it. A market-crash might follow. To protect your financial situation somewhat, it might be a wise choice to start investing now in alternatives like gold, silver and real estate. [See prepare - investments]
Question remains: Will people accept these higher prices and the fact that they will have to downgrade their lifestyle and use less energy? I sure hope so. If not, we can expect a much worse scenario. Think strikes, think riots and think empty grocery stores.
IS THERE ANYTHING WE CAN DO ABOUT THIS PROBLEM?
Well.., we might, but it may be too late already... Society and politicians should have started dealing with this 10 or 20 years ago. If we want to solve this problem, it will require major investments in alternatives for oil and natural gas RIGHT NOW. I'm talking trillions of dollars. It would be a start if US government puts just as much money in developing alternative energy's as it does in maintaining the war in Iraq.
There ARE some other sources of energy currently available. You've probably heard about the magical 'hydrogen' which is to solve all of our energy problems. Let me educate you on this alternative. Hydrogen is an energy-carrier. It's NOT an energy-source. This means it takes energy to produce Hydrogen. Most of the hydrogen created these days comes from oil. It is possible to create hydrogen from water, but it requires electricity, which will split the water into oxygen and hydrogen. It will never replace oil as an energy-source. There are some good aspects of it though. It's a cleaner energy than oil. Burning hydrogen produces a lot less CO2 output, so it won't contribute to global warming as much as fossil fuels do.
WHAT ABOUT SOLAR AND WINDPOWER?
Both of these are very clean sources of energy, but they are (currently) pretty pricey. This makes them not competitive for oil at this moment, but they will be better choices when oil prices start to rise. However, in 2004, solar-cells and wind power produce just 0.2% of total energy supply. This number is expected to rise to only 1% in 2020.
That's pretty disturbing.
OK, WHAT ABOUT NUCLEAR POWER?
Nuclear power might be an option, but there are some serious issues. First of all, many of you will remember the Chernobyl tragedy in Russia in 1986. The amount of radiation that was distributed because of this accident killed a lot of people. The recent threat of terrorism is the next concern. Nuclear plants are extremely good targets for terrorists, just like oil-pipelines and refineries. Even if the government chooses nuclear as a valid alternative they better start building now. We will need to build hundreds of new nuclear plants over the next decade, if we want nuclear power to become a serious backup for the upcoming oil-production decline. Lets assume for a moment that we succeed in doing that. It will only generate a different and perhaps even bigger problem: What to do with all the nuclear waste??
I HEARD THE MIDDLE EAST STILL HAS LOTS OF OIL LEFT
You are painfully right. 65% of the world oil-reserves are located in the Middle East. This means they will become a major player in the next decade. It also means that when oil will become scarce, western country's will go over there to make sure they get there oil. In a worse case scenario this could result in an international war for oil. In fact, it may have begun already. The war in Iraq is not only about WMD's and bringing democracy. It's mostly about oil. Expect the middle east to become one big battlefield in the next 10 or 20 years. This includes Saudi Arabia. In fact, there are some bills floating around in the senate to reinstate the draft. This is a pretty disturbing fact.
ALL OF THIS SOUNDS LIKE A HOAX
In fact, it does. Lots of people deny or dismiss peak oil as being another one of those doom predictions like asteroid impacts, alien invasions and so forth. The big difference is that everything that is written here is backed up by cold numbers and facts. The people behind 'peak oil theory' are among the most respected scientists and geologists in the world. Even some politicians support the theory. Michael Moore and Matt Simmons (Bush energy advisor) are some of the major names on the list. Dick Cheney said in a speech in 1999 that around 2010 the world would have to produce an additional 50 million barrels a day to meet oil-demand.
CONCLUSION
We are living in interesting times. The world and our society are about to change in a big way. Whether it will be for the better or for the worse is still a difficult question to answer. My view is that the coming years will be a time of increasing international tension, inflation and flattening economic growth. When things go bad, all of this could result in a global war for energy (or clean water). The outcome of this war would be too harsh to imagine if we take into account the amount of nuclear weapons that the US , Russia and Asia have in their basements.
So there you have it. A pretty unbiased introduction on the coming energy crisis. I'm not expecting you to just believe everything that has been said in this article. However, I do encourage you to do some research on this subject yourself. The facts are all out there on the internet. Some of it comes straight from BP and Exxon and there is a lot of data out there from ASPO. ASPO is a highly respected organization that does research on this very same subject. Do whatever you want with the info. Dismiss it, criticize it or take action. There IS something we can do to protect ourselves financially and socially. Our future and the one of our children is about to be determined by the actions we take now.
Best regards,
Al
This introduction has made
people aware of the coming energycrisis.
Internet, plasma TV's, SUV's.. Think about the enormous houses we live in, featuring everything to make life easy as hell every single day. Air conditioning, refrigerators, heating, flowing water, garbage disposement, big basements full of food,. Hence, if you're not happy with the way you look, you can get a total 
The world had a total reserve of 2 or 3 trillion barrels of conventional oil in the ground when we started drilling the first well. We have used about half of it at a current rate of 28 billion a year. No need to worry right? The glass is still half full!
Both of these are very clean sources of energy, but they are (currently) pretty pricey. This makes them not competitive for oil at this moment, but they will be better choices when oil prices start to rise. However, in 2004, solar-cells and wind power produce just 
You are painfully right. 
In fact, it does. Lots of people deny or dismiss peak oil as being another one of those doom predictions like asteroid impacts, alien invasions and so forth. The big difference is that everything that is written here is backed up by cold numbers and facts. The people behind 'peak oil theory' are among the most respected scientists and geologists in the world. Even some politicians support the theory. Michael Moore and 
So there you have it. A pretty unbiased introduction on the coming energy crisis. I'm not expecting you to just believe everything that has been said in this article. However, I do encourage you to do some research on this subject yourself. The facts are all out there on the