Simon Snowden, a lecturer in Operations Management who recently addressed the All-Party Parliamentary Group on Peak Oil and Gas, believes the accelerating cost of oil heralds the beginning of a supply ‘plateau’ where oil production peaks and demand for the commodity outstrips supply to such an extent that world economies begin to fail because of their dependence on it.
Pressure on oil supplies has risen sharply as a result of huge economic growth in China and, to a lesser extent, in India. Increased demand has been compounded by production problems in several of the world’s oil-producing nations including Iraq and Nigeria, owing to their instability.
The price of oil and demand for the commodity has continued to rise for nearly 10 years but this has not been matched with sufficient investment in supplies. In the past 12 months the price of oil has soared from just above $50 to $125 a barrel. A recent report by Goldman Sachs claims the possibility of $150 to $200 a barrel is increasingly likely in the next six to 24 months.
Simon Snowden said: “Unless we completely cut our dependence on oil, we could see years of almost non-existent growth for the UK economy. Any recovery will be short-lived and at ever-lower levels. The cost of goods will rise even more sharply and the economy could stagnate into a recession for several years. We need to invest in alternative forms of energy and transport but changing our economy in such a fundamental way will take years so in this sense a recession is inevitable.
“Fuel poverty will be an increasing problem – it will be important to protect the most vulnerable such as the elderly and the poor. We also need to safeguard our farming industry which could easily be undermined as around 80% of the cost of cultivating crops is based on products vulnerable to the price of oil.”
He added: “The combination of global inflationary pressures caused by problems in the US sub-prime market and the soaring cost of oil are creating the ‘perfect storm’. Until we have adjusted our economy we will continue to suffer at the hands of oil.”
Source: University of Liverpool
Related stories:
Physicists urge U.S. to prioritize energy efficiency
The U.S. can reduce its dependence on foreign oil and greenhouse gas emissions by making cars and buildings much more energy efficient, according to a study released Tuesday by a large national association of physicists.
'Omnivorous engine' hopes to run on many fuels
(PhysOrg.com) -- The 'omnivorous engine' is no picky eater. Gasoline? Down the hatch. Ethanol? Butanol? It'll slurp those up too. The creators of the omnivorous engine, engineers at the U.S. Department of Energy's Argonne National Laboratory, seek to fashion an engine that can run on just about any type of spark-ignited fuel.
Dirty smoke from ships found to degrade air quality in coastal cities
Ah, nothing like breathing clean coastal air, right? Think again. Chemists at UC San Diego have measured for the first time the impact that dirty smoke from ships cruising at sea and generating electricity in port can have on the air quality of coastal cities.
Probing Question: Is peak oil a myth?
Unprecedented summer gasoline prices are squeezing Americans' wallets and also expanding their vocabularies, as terms like "peak oil" gain common usage.
MIT recommends steps to slash gasoline use by 2035
(PhysOrg.com) -- How much gasoline would the nation save in the year 2035 if lightweight hybrid and plug-in hybrid vehicles dominated the marketplace? More than 68 billion gallons, or about half the fuel currently used each year by today's vehicles.
As Economy Slumps, New Study Highlights Tools For Avoiding Fiscal Crises in Local Government
(PhysOrg.com) -- As news reports focus on the shaky footing of the national economy, a researcher from North Carolina State University has released a study laying out several best practices that can be implemented by state governments to prevent or mitigate fiscal distress at the local government level. In his paper, Dr. Charles Coe urges state governments to adopt these best practices in order to avoid the long-term problems – including high taxes, declining public services and an inability to pay local government employees – caused by fiscal distress at the local level.
Military action to influence oil-producing nations ineffective, expert says
There is another inconvenient truth about finite resources and human behavior on Planet Earth, an expert on international security and energy says. Trying to influence oil supply with military force in the Middle East is not only ineffective, it also is counterproductive.
Key to using local resources for biomass may include waste
The Northwest can have a sizeable biofuels industry based primarily on local resources -- if non-traditional feedstocks, such as municipal waste, and new conversion technologies are used, according to a report issued today by the Department of Energy’s Pacific Northwest National Laboratory.
