Reply #13: Because we didn't need the oil in 1992 [View All]

[IrateCitizen]

I don't know if you bothered to notice, but oil prices have risen a full $20 per barrel in the past year alone. Since the late 1990's, they've gone from around $10 per barrel to over $50 per barrel. There's a distinct reason for that -- oil supplies are starting to reach the levels of scarcity.

Just look at the activity of multinational oil companies over the past 5 years or so. Shell had to significantly revise their estimates of reserves downward last year. Companies are pushing money into mergers, not exploration. In fact, discovery of oil reserves has plummetted to near nothing over the past several years.

Now, nobody knows for sure what the state is of fields in Middle Eastern countries, like Saudi Arabia, because all the businesses there are state-owned. However, given the fact that Saudi Arabia promised to boost production a few months back in order to bring prices down, and was unable to do so, is not a good sign. What it points to is the fact that there is no longer such a thing as a "swing producer" -- a producer that can increase production to bring prices down -- so we've actually reached the point at which our oil demand is equal to our available production.

This, my friend, is the definition of "peak oil". And what it means is that we are now facing a downward production slope in which oil grows more scarce and expensive as time goes on. It won't take much for prices to spiral out of control -- a mere 5% reduction in supply send prices skyrocketing about 400% during the 1970's gas shortages. That will seem like a day in the park with what we're facing.

The reason that Bush went into Iraq has everything to do with this. If the US can create a police station in the Middle East, it can control the flow of oil and thus maintain some semblance of "the American way of life", which Dick Cheney has declared as being "non-negotiable". At least, that's their thought process on the matter. Personally, I don't think they'll be able to maintain it, because it is clear that things will never calm down in Iraq so long as we remain there, we're overstretched militarily and economically, our culture is rotting out from within, and as oil prices jump over the next few years we simply will not be able to afford fielding a military that is incredibly dependent on oil in order to function.

In short, we will all likely see the end to the way of life we have grown accustomed to in our lifetime. All of it -- gone. Without cheap oil, there is no "American way of life", other than perhaps a return to the 18th century but without the extensive expertise in craftsmanship that existed back then. If anything, it will usher in a new Dark Age for humanity while civilization is forced to re-invent itself.