If Murphy's Law ever met 2010, it could literally mean the end of an era that began in the industrial revolution, what will one day be called the industrial age. An age the will be marked by three phenomena: consumption, extreme violence (against humans and the environment), and innovation. The beginning of the 19th Century saw the perfect synthesis of an untapped, virtually virgin planet earth, a scientific culture on the brink of major breakthroughs and a human culture economically organized to create and fulfill unlimited human demand.
As we look back at the post-war era, from a post industrial age perspective, it will seem like a drunken paradise. Paradise in the sense of being able to quench, at least by the rich, almost any whim or desire, a limitless orgy. Drunken because only an intoxicated society could have been so blind to the destruction it was causing. Even while on the brink of disaster, the wealthy kept on living as if nothing was ever going to happen to them. The Titanic had already hit the iceberg, but they refused to believe it. History will not be kind to this generation.
Another, much larger part of the world, looked on in envy and despair, left out of the party, stripped of their natural resources and left broke by corrupt governments and overwhelming foreign debt. They have little to lose and will only cry because of their compatriots who made it to the Promised Land only to suffer along with the rich. The year 2009 will be remembered as the false peace, the year when the rich decided to dive headfirst back into the cookie jar instead of wising up. Who doesn't sense now that something is very wrong? Remember that feeling of real confidence in the future, like the 1990's? Does anyone believe that we are really okay? That the people who are leading us have any idea of what they are doing?
There are two terms that will become the catchwords of 2010, and unfortunately they are neither sexting nor iPhone. We will look back nostalgically for the time when we could have the luxury to care about Tiger Wood's sex life. The two key terms we will have to deal with are Peak Oil and Fractional Banking/Quantitative Easing. People will scream and howl about how our politicians and leaders were so blind, how they did nothing about this, and they will only be denying their own guilt. These concepts have been around for over a quarter of a century, and since the onset of the Internet, widely circulated. We can only blame ourselves. We let this happen, and we must find a solution.
Peak Oil is a concept developed by a Shell geologist M.K. Hubbert in 1956. He correctly predicted that America would hit Peak Oil around 1970. Peak Oil simply means that we have used half of all available oil. If there were, imagine, a total of 1,000 barrels of oil in the ground, when we extract barrel 500, we have reached peak. Below is a graph which shows a graph describing peak oil. It is impossible to predict exactly when we reach peak because calculations of how much oil is in the ground, and fluctuations in demand either bring it closer, or push it farther out. The time when we reach peak can be debated, but the concept itself is just simple math, not much to argue about.
Insert Graph here.
Why is Peak Oil a problem? Once we hit peak we can switch to solar, wind or even nuclear. Not so easy. Petroleum is the basis of our entire society: agriculture, transportation, electricity, in short, just about everything we do, eat, wear, consume, listen to or watch is based on cheap and available oil. The United States uses almost as much oil for food production as for driving, not to mention highways, plastics and airplanes.
Once we hit peak, or come very close to it, something dramatic happens. World demand for oil is relatively static. In a major world recession demand might fall two or three percent, but in most cases, especially considering the growth of China and India, world demand for oil will grow about two or three percent a year. Oil is not like caviar, if the price gets to high we can't stop consuming it. We have to drive to work, heat our houses, eat food that is grown with tractors, shipped by truck, stored in a refrigerated supermarket that is powered by an electrical grid based in part on oil. Once we hit peak, demand will remain constant, but supply will fall. This means two things. The price will sky rocket, and someone will have to go without. Every day that passes there will be less oil available, meaning that prices will continue to rise, and more shortages will occur. The geo-political implications are obvious. It is possible that we have already hit peak oil at 85 million barrels a day, but only time will tell as demand grows again in growing economy.
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