This blog will explore our faulty system of petroleum economics. Blog author Robert Anderson is a former Koch Refining executive with 30 years experience in downstream oil, biofuels and peak oil issues.
We’ll be monitoring the dangerous deficiencies of oil economics. With petroleum and energy prices spiraling up into catastrophic levels, its time to come to terms on some dire oil market fundamentals. Due mainly to a false faith in conventional economics and its resultant excessive fuel consumption, we have grown past the ability of the system to supply us.
Peak oil is a pending reality. It’s not a contrived shortage or a conspiracy. We are going deeper for smaller oil deposits. We aren’t discovering giant new fields like we did back in the ’50s and ’60s. Many of these are now starting to deplete. Its also important to realize that there arent viable net energy positive alternatives to fuel our excessive voracious energy consumption.
Peak oil does not mean we will run out of oil. We never will. A majority of oil reserves aren’t economic or net energy viable.
Peak oil does mean we will no longer grow oil supplies like we have for +150 years.
It does mean the political power shifts from the oil consumers to the oil producers.
It does mean the propensity for oil wars excalates. Both Iraq and Libya are prime examples.
It does mean economy wrecking high energy costs and onerous wealth transfers to the West’s adversaries.
Our current system of economics won’t solve this problem. In fact, our faulty economic approach got us into this energy quagmire. We’ve always subordinated energy to economics when it should have been the other way around. These current lofty energy prices are telling us that our economics of plenty are now getting trumped by basic geologic depletion. Contrary to expectations we will not be bouncing back into economic growth mode anytime soon. Why not? Revisit here frequently to find out.