26 Oct 2008
The true crisis is still to come
Forget the financial crisis, the true global economic crisis will come in the next ten years. The end of cheap oil and the beginning of climate change are the first warning signs. We won’t be able to stop increasing oil prices in the long term. And we won’t be able to stop climate change and global warming.
Global warming and increasing oil prices are coupled: the more fossil fuels we burn, the more carbon dioxide will be emitted into the atmosphere. If the last drop of oil or gas and the last piece of coal is burnt, the amount of CO2 has obviously reached the maximum. Each oil source will be exhausted one day, but the million barrels of oil the world consumes each day is growing constantly. The point of peak oil corresponds to the beginning of global warming.
The earth’s finite oil supply means that the point of peak oil is inevitable. If the global oil production finally declines while the consumption rises, the prices will continue to climb according to the principle of supply and demand. The reactions on the stock markets will be dramatic. The effect of crossing the point of “peak oil”, will be a global energy crisis. We have already a war about the last middle east oil reserves. More wars and social unrests will come.
Our whole economy is based on fossil fuels. There is no preventing of global warming or peak oil. As long as there is oil in the ground, it will be exploited. From the biggest companies of the world, nearly all have something to do with oil and automobiles (except Wal-Mart, but even Wal-Mart has to ship their products to the local stores somehow). 8 out of 10 from the biggest companies of the world live from oil or oil-consuming products: Exxon Mobil, Shell, British Patrol (BP), General Motors, Toyota, Chevron, Total, and ConocoPhillips (ConocoPhillips operates 19 refineries around the world) – including all the supermajor non state-owned oil companies. Big companies change their course as easy as an aircraft carrier.
The problem is global has negative long-term consequences, but governments act local and need positive short-term reactions to be re-elected. I don’t think we will be able to slow down climate change or global warming. We are only seeing the first signs of the true crisis. Prepare to live in warmer world without oil.