The truth may be that we are approaching the halfway mark in the world's oil supply, after which production will start to decline.

What's Happening to Gas Prices?

Guy Dauncey | BC Sustainable Energy Association

The truth may be that we are app
The truth may be that we are approaching the halfway mark in the world's oil supply, after which production will start to decline.
What's Happening to Gas Prices?
By Guy Dauncey, BC Sustainable Energy Association

If you drive a car, the chances are you're wondering "When will this stop?" At $40 a fill-up for a small car, or $80 for a family van or SUV, it's becoming an important question. If you heat your home with oil (or gas), you are going to have a much higher heating bill this winter.

So why is it happening? Are the oil companies gouging us? Is it a response to the war in Iraq, and the hurricane Katrina? Or is something else going on?

The answer to all these questions is probably yes. Yes, the oil companies may be playing the price increases: that's what oil companies do. People hate to feel they're being ripped off, but there's little we can do, and they know it. In England, if it's any comfort, they are paying almost $2.20 a litre.

Yes, political uncertainties in the Middle East may be adding somewhat, and yes, Katrina has caused a big spike in prices, since the hurricane closed down a quarter of all US oil production. These are temporary influences, however, which cannot explain the rise in the price of crude oil from $20 a barrel in 2002, to $30 in 2003, $40 in 2004, $50 in 2005, and now $60 to $70. At this rate, it will hit $100 a barrel by 2010, or sooner.

The US Energy Information Agency publishes a Monthly Outlook which shows the price of oil, and predicts its future. For the past three years, they have been consistently wrong. Every month, the price goes up. Every month, they predict that it will level off. And every month, it keeps on rising.

Why are America's top energy analysts so hopelessly wrong? Because every month, they believe the increase has been caused by a temporary blip which will soon correct itself. They are either unwilling, or unable, to tell us what may be really happening.

The truth may be that we are approaching the halfway mark in the world's oil supply, after which production will start to decline.

The consensus seems to be that the Earth's legacy of accessible oil, that was laid down by ancient sea creatures and plants millions of years ago, is around two trillion barrels, of which we have used one trillion: that is why we are close to the half-way mark. We are consuming 30.6 billion barrels a year (84 million barrels a day), which is rising steadily as China and India climb on board.

As soon as we pass the half-way mark, we enter the last years of the Age of Oil. From that moment onwards, the price will rise every year until we reduce our global demand by adopting more efficient, sustainable sources of energy, and leaving the oil behind us. This 'peak' may have happened this summer.

Alberta's tar-sands hold 300 billion barrels of unconventional oil, but the oil companies can only extract 1 million barrels a day, which is not enough to make a difference. The most they hope to extract is 4 million barrels a day, by 2020.

There is no reason to panic, however, or fear the end of civilization. We are a resourceful, energetic, innovative species, and this is simply a transition. It is no more the end of the world than was the change from horses to cars in the early 20th century.


The Dynasty Electric Car can run for as little as $7 a month.
See http://www.itiselectric.com

The world has an ample supply of sustainable electricity from the sun, wind, tides, and other renewable sources. We don't need nuclear power, or hot fusion. You can run a small, smart, electric vehicle for as little as $7 a month, or $20 for a larger one. You can add batteries to a Prius to create a plug-in hybrid which can run around town on electric power, and use biodiesel or ethanol from agricultural wastes for longer journeys. We can build zero-energy homes and developments that use no fossil fuels, and make no contribution to global climate change. We can grow much more food locally, instead of shipping it vast distances across the world.

The biggest problem is not a lack of solutions. It is a lack of political will among our leaders, who seem to be as blind to what is about to happen as America's leaders were to the impact of Katrina on New Orleans. The BC Sustainable Energy Association (www.bcsea.org) was created in 2004 to campaign for solutions in a positive, vigorous way, and so far, the response has been amazing. So don't waste time complaining about the price of gas. Get on board with the search for solutions, and celebrate the coming end of the Age of Oil.

Guy Dauncey is President of the BC Sustainable Energy Association (www.bcsea.org). He lives in Victoria, B.C., Canada.

 

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