|The US was once the leader in world oil production|
|But US oil production began to decline in 1970|
• US oil decline gave rise to the oil problems of the 1970s - OPEC, embargo
• Decline continues, year after year
• Decline occurred even with improving technology
• We began to import more oil and moved to a "service"economy
• Truth was too embarrassing to tell
|One by one, other sites have begun to decline also|
• Date not yet certain
• Association for the Study of Peak Oil-USA says "Before 2015"
• Case Western Reserve survey of oil experts says "highly likely" by 2010
• Several experts say 2005 or 2006
• Data suggests peak may be past
|Peak may have occurred about the time of Hurricane Katrina (2005)|
• Transportation - cars, buses, trucks
• Food - planting and harvesting, processing, refrigeration, transportation
• Raw materials - asphalt, building materials, clothing, pharmaceuticals
• Energy source - manufacturing
|Rough estimates of future world oil production - if peak is now|
• Historical: US energy Information Administration
• Symmetric: Assumes future production will be mirror image of past
• Analyst average: Average of close-date projections by Ace, Bakhtiari, and Robelius
|Future US oil supply will depend on level of imports|
• Imports likely to decline faster than world oil supply
- Exporters supply themselves first
- Hoarding; civil unrest
• US may be unable to purchase oil
- Balance of payments issues
- Will exporters take more IOUs?
|With less oil, real GDP is likely to decline|
• We weren't told when US production peaked.
• Can we expect to be warned before world production peaks?
• Declining economies are embarrassing.
• Technology didn't prevent the decline in US oil production.
• Technology didn't prevent the decline in North Sea oil production.
• Should we expect it to prevent a decline in world oil production?
• No, not really.
• Conservation is a partial solution.
• Alternative fuels (solar, wind, biofuels, geothermal) are likely to provide some help.
• New technology like battery-operated cars is likely to be too little, too late.
• We may need to unwind globalization; go back to simpler life-styles, technologies that worked before.