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This recession and Peak Oil may be related, as we neared Peak oil, the increase in the price of oil caused people to convert their income (and borrowed money) from buying items to buying Gasoline. This pushed the price of oil up and up, till people stop buying gasoline and any other items. This reduction in buying (Both Oil AND other items) lead to a drop in International Trade, which lead to less demand for oil as the need to transport items from exporting countries to the US dried up with the drop in US Demand. This lead to the current recession, which in turned is tied in with a drop in demand for oil and thus its price.
Thus which occurred first? Peak oil or the recession caused by the price increase tied in with approaching peak oil? I would like to say Peal oil, but the above increase in the price leading to a Recession that saw a drastic drop in demand may be what happened instead. True Peak Oil may not yet have occurred, but may never occur. A similar situation occurred in the Steel Industry during WWI, Sometime between 1916 and 1918 US steel production peaked, and dropped (Except for WWII and Korea Wars) ever since. When did peak peacetime steel production occur? No one knows, for it incurred during WWI, when steel demand was War driven. If it was NOT for WWI, peak production should have peaked in 1917, but do to the demands of WWII increased even in 1918 (And again during WWII and Korea). The second factor of WWI Steel production covered up the true peak steel production. The same with this recession, true Peak Oil may have occurred in 2008, but do to this recession and the subsequent drop in demand do to this recession, production is DOWN in 2009 when it may have gone up if the recession had not occurred, This may even be true of 2010 (i.e. if no recession had occurred, increase production even in 2010). I do NOT believe so, but my belief is NOT a fact. We have to keep an open mind on this subject, while at the same time preparing ourselves and this country for Peak Oil. Peak Oil either has occurred or will occur soon, all this report says is world wide oil production has dropped, it may be do to Peak Oil, it may be do to the price increase tied in with Peak Oil which caused this recession. We can NOT say at the present time, we may be able to say in three to five years, but not right now.
Having said the above, lets remember, Peak Oil will Occur and what has happened since the Summer of 2008 I foresee as the "Norm" for the next 10 years as we hit Peak Oil and start on the down slope of the production graph. Price starts low, then goes up as demand for oil goes up as the economy kicks into gear. AS the price of Oil goes up, the price sooner or later gets to high for low income people to buy, they drop out of the workforce (Can't afford to drive to work). This leads to a drop in pay for this group WHILE their employers try to keep them getting to work any way the employer can. The problem is the best way is to increase wages, but that leads to a further demand for oil which leads to further price increase of oil and more people looking for ways to pay for the oil to get to work, even if that means cutting back on other things they buy. Sooner of later you get to a situation where employers refuse to increase wages and people stop working do to the increase in the price of oil (One reason is many employers will see addition increase it the items they sell do to the price of oil, thus most employers will NOT have the money to pay employees so the employees can drive to work). Sooner or later the price of oil will get so high the economy will do what it did last Summer, collapse. With that Collapse the demand for oil will drop like a rock, like it did last fall. The subsequent Recession will see low price for oil and then the whole cycle will start all over again. Thus we will be looking at recessions after recessions as we ride the roller coaster of the down side Slope of Peak Oil.
Now sooner or later we will have to make long term decisions to end the roller coaster ride. I do NOT see this till at least another cycle, for no one is proposing any solution to Peak Oil, in fact they are denying the existence of Peak Oil. As long as that is the case, we will be on this Roller Coaster. Now as soon as our Leaders (and only after most Americans also accept that Peak Oil is the Problem) accept that Peak Oil is the problem, then and only then will solution be proposed and passed. These include funding for mass transit, Amtrak and Bike Trails, all means to reduce US Oil usage. I even foresee an excise tax on Oil so that these items can be paid for. I foresee the US pulling out of Iraq and Afghanistan and other foreign bases, more to divert the money to US programs to end oil dependency then any other reason. The Federal Government will also try to get local and State Government to do things to reduce oil usage, improving rural roads and bridges (So people do NOT have to travel as far), provide more train stops in such rural areas so people can drive to the train and then to the big city (when rural people have to) instead of driving into the city. Suburban growth will die, but this is more the product of oil prices then any Government Action. To save some of Suburbia I foresee the Parking lots near Suburban Malls be built over for low income housing, so the Mall can have their low income employees when Gasoline gets so high that such employees can no longer drive to work (again this will be more the work of the Suburban Malls response to high Gasoline prices then any Government action except in Local Government approval of such low income housing).
Notice it will be an interaction of people (and Companies) reacting to the increase in the price of Gasoline, the Local Government efforts to reduce the cost of the price of Gasoline on its residents (Including the Local Mall shops), The State Governments addressing the needs of transportation of its Rural and Suburban residents, the Federal Government trying to reduce Oil usage no matter how, and inner cities handling the increase in the use of Bicycles of its residents as while as interacting with the Suburbs as to Light Rail systems connecting the Malls with the old urban core and thus connecting the Malls with each other and suburb residents (I foresee a move back to the city, but that will take at least till the next generation as this generation is still committed to Suburban living, as had their parents and Grandparents).
Just a comment on short term affect of Peak Oil and Long Term Affect of Peak Oil once we are on the down hill slope of the production Curve. We are probably as that point right now, but the evidence to that is still NOT available. We will know ONLY three to five years after it happened (Like how the US did NOT accept it had hit lower 48 state peak oil in 1969 till the mid 1970s and by that time we were hopelessly addicted to foreign oil).
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