EconomicsPeak Oil

Oil Supply Crunch Coming

The Future of Travel?

At the risk of labouring the point, I must bring the following warning from the International Energy Agency (IEA) to your attention:

Nobuo Tanaka, the IEA’s executive director, warned there could be a "supply crunch".

… "Currently the demand is very low due to the very bad economic situation," Mr Tanaka said.

"But when the economy starts growing, recovery comes again in 2010 and then onward, we may have another serious supply crunch if capital investment is not coming." – BBC

I made this exact same warning recently:

In fact, the economic slowdown is now taking centre-stage, pulling politician’s minds away from what has just occurred on the oil front. Most economists are expecting continued economic recession throughout 2009 – but (perpetual optimists that they are) not a few are gingerly anticipating a new phase of growth – to hit sometime in 2010. Just today the world’s leaders are trying to forge a new economic model – a ‘Bretton Woods II’ – and the announcement from the G20 financial summit is that they have committed to "restore growth". When (or if) that happens it seems to me that as soon as a measure of optimism lifts the spirits of investors, unfreezing credit and trade, enabling markets to give birth to a new, fledgling economic bubble, they will get up just to hit their heads on the low ceiling that is now our maximum daily oil production limit of around 85 million barrels per day (or less by then). If this happens, prices will skyrocket once more, and the economic mood may never recover again. – Staring at the Future from the Top of the Slippery Slide

With all eyes, understandably, on the economy at the moment, the impending mother of all economic catastrophes (yes, it can get worse, much worse…) is being all but ignored – and certainly is in the mainstream media.

The good news, if you can call it that, is that people no longer regard Peak Oil adherents as ‘conspiracy theorists’. Indeed, with oil prices plummeting due to the economic crisis, you’d expect a cacophony of gloating and beration from those that believe fossil fuel supplies are all but limitless, but those voices seem to be strangely muted today.

But, this isn’t about who is right and who is wrong – it’s purely about adaptation, transition, and survival. It takes many years – decades even – for a society to prepare for peak oil…. I fear many will come to understand, in hindsight, the significance of the precautionary principle over the next couple of years. Saying “I told you so” just ain’t satisfying if it’s anarchy all around….


  1. Thanks Tim.

    Of significance is the fact that now when serious investment needs to go into building a new sustainable infrastructure the funds are now not there, and perceived ‘more pressing’ (immediate) concerns take priority. Although I’m loathe to see world economies investing trillions into oil exploration and development (the IEA is asking for more than 26 trillion – right as we’re sinking into a global depression), for example, the reality is that the world is now in an extremely vulnerable position, as society’s dependency on oil is all but absolute (how many of us can actually say we source all our food, clothing and other needs from within our own local community?) – and now the financial crisis is seeing oil development projects put on hold, and even maintenance of existing sites, etc.

    The scale of what needs to be done if we’re to preserve some kind of social order is immense, and yet the world’s politicians, as Kurt astutely notes, are still trying to patch up the old economic model, one based on oil, based on ever increasing debt, based on energy intensive global trade, and based on the systematic consumption/destruction of increasingly finite resources (be they oil, or water, or soil, or forests, etc.). The necessary transition to relocalised self-sufficient communities is the very last thing the world leaders are pushing for – indeed, they are vowing to keep the global free trade agenda moving forward.

    That’s the big issue with leaving preparations for a post fossil-fuel world very late – we end up reacting, instead of acting. We now need to relocalise, and democratise, extremely fast…

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