The Twilight Era of Petroleum
By Michael T. Klare
Several recent developments -- persistently high gasoline prices, unprecedented warnings from the Secretary of Energy and the major oil companies, China's brief pursuit of the American Unocal Corporation -- suggest that we are just about to enter the Twilight Era of Petroleum, a time of chronic energy shortages and economic stagnation as well as recurring crisis and conflict. Petroleum will not exactly disappear during this period -- it will still be available at the neighborhood gas pump, for those who can afford it -- but it will not be cheap and abundant, as it has been for the past 30 years. The culture and lifestyles we associate with the heyday of the Petroleum Age -– large, gas-guzzling cars and SUVs, low-density suburban sprawl, strip malls and mega-malls, cross-country driving vacations, and so on -- will give way to more constrained patterns of living based on a tight gasoline diet. While Americans will still consume the lion's share of global petroleum stocks on a daily basis, we will have to compete far more vigorously with consumers from other countries, including China and India, for access to an ever-diminishing pool of supply.
The concept of a "twilight" of petroleum derives from what is known about the global supply and demand equation. Energy experts have long acknowledged that the global production of oil will someday reach a moment of maximum (or "peak") daily output, followed by an increasingly sharp drop in supply. But while the basic concept of peak oil has gained substantial worldwide acceptance, there is still much confusion about its actual character. Many people who express familiarity with the concept tend to view peak oil as a sharp pinnacle, with global output rising to the summit one month and dropping sharply the next; and looking back from a hundred years hence, things might actually appear this way. But for those of us embedded in this moment of time, peak oil will be experienced as something more like a rocky plateau -- an extended period of time, perhaps several decades in length, during which global oil production will remain at or near current levels but will fail to achieve the elevated output deemed necessary to satisfy future world demand. The result will be perennially high prices, intense international competition for available supplies, and periodic shortages caused by political and social unrest in the producing countries.
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In setting the stage for its simulated crisis, Oil Shockwave identified a set of conditions that provide a vivid preview of what we can expect during the Twilight Era of Petroleum:
*Global oil prices exceeding $150 per barrel
*Gasoline prices of $5.00 or more per gallon
*A spike in the consumer price index of more than 12%
*A protracted recession
*A decline of over 25% in the Standard & Poor's 500 stock index
*A crisis with China over Taiwan
*Increased friction with Saudi Arabia over U.S. policy toward Israel
more at:
http://www.tomdispatch.com/index.mhtml?pid=10216
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