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Monday, May 29, 2017

Mr Oil is already making a long, slow exit. You might not be seeing it though…

Posted by steve on July 5, 2009

slow-exit2Since the end of the First World War, oil has been flowing into almost every aspect of our daily lives: as fuel, as basis for chemicals, as plastic, fabrics etc. In fact today, it is hard to think of a product that does NOT contain a large portion of oil or oil energy.

Oil is such a compact source or energy – one cup is enough to pull a small car up the Eiffel tower. Compare that to a chunk of wood the same size – it is mostly water! As I write this there is no known source of energy that is so convenient, compact and easy to transport, that can power the millions of vehicles and machines all over the world.

If you think that oil will be available to drive business indefinitely, think again. The fact is, oil is just not being found any more in large quantities. And we are using more than is being found.

THIS IS GOING TO FUNDAMENTALLY ALTER THE WAY WE  LIVE,  DO BUSINESS AND THINK – WITHIN THE NEXT DECADE.

The long exit was first announced in 1956 by petroleum geologist M King Hubbert. He calculated the US would peak in 1970 and the world around 2000. The long exit started in 1964 when world oil discoveries peaked. Since then, year on year, less oil has been discovered. There have been no significant discoveries of new oil since 2002. In 2001 there were 8 large scale discoveries, and in 2002 there were 3 such discoveries. In 2003 there were no large scale discoveries of oil. For every year since the mid 1980s, annual production has been greater than annual discoveries.

Since 2005, there has been no real increase in world oil production, remaining at around 85 million barrels a day. But it gets worse. The oil remaining in the ground is harder to get. The easy stuff was extracted long ago. At the beginning of the oil age the equivalent of one barrel of oil invested would bring you 100. Nowadays, depending on the oil field, it is between one and 18 you get back.

Many argue I am overstating the case. But many, most even, are heavily invested in Business As Usual and would be hit negatively if people started to change their ways.

Advice:

When planning your business, daily life and investments, factor in decreasing availability and increasing price of oil. Oil prices dictate energy prices so this applies to all energy sources, even renewable ones.

Things to look for:

Where am I or my business vulnerable? To what extent is my business or my daily life reliant on uninterrupted supplies of oil based products? What alternatives are available now? What services do I rely on that might be increasing in price soon?

Comments

2 Responses to “Mr Oil is already making a long, slow exit. You might not be seeing it though…”
  1. Steve says:

    It looks like Dr Fatih Birol -the chief economist at the
    respected International Energy Agency (IEA) in Paris,
    which is charged with the task of assessing future
    energy supplies by OECD countries – agrees with me. See the
    interview with him in the INDEPENDENT.
    http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html

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