If/when a petroleum shortage impacts it will concentrate minds wonderfully. But when it comes the window of opportunity could be brief and risky. If things deteriorate too far too fast there could easily be too much chaos for sense to prevail and for us to organize cooperative local alternative systems.
Unfortunately, the more often the more prominent voices--those unwilling to share with followers the full scope of our future fossil fuel/energy supply challenges--are given forums for public consumption, the greater the odds that "too much chaos" will be the strategy available to all of us. A public fed only glowing, upbeat parts [and not necessarily without some justification] of partial-truths is understandably relieved that one major problem is off the table before it even becomes a major problem.
But the flip side is that sharing partial-truths means being kept in the dark about the more unpleasant and just as prominent challenges casting a cloud over the Happy Talk of abundance and "No-Worries" energy supply. Those lacking that information will be terribly unprepared for the reality of a diminishing, finite resource which in due course will no longer be in adequate or affordable supply to meet their needs. That's a major problem in the making....
Of course, none of this is going to happen next month or next year, or perhaps not for several more years. But that's not a reason to set it aside for now. The scope of adaptation to a diminished and ever-diminishing thereafter fossil fuel supply does not lend itself to anything close to a quick-fix. Given how dependent we all are on an always-available supply of energy to satisfy every personal and commercial need, any prolonged limitations will create no small amount of stress.
So why is oil so cheap? There are various contributing factors relating both to supply (production rate) and demand. The main supply factor is that production of U.S. shale oil has increased rapidly to 3.5 million barrels a day, along with the renewed oil production from Iraq and Libya. Saudi produce one third of OPEC's output, and this time they have refused to cut production because they want to keep (grow?) their share of the market.
At the same time, demand has fallen because the global economy (especially China) has slowed down. Since everything we do uses oil, when an economy is strong the demand for oil goes up, and when the economy weakens, demand goes down.
High debt loads by oil producers necessitated continuing production efforts despite the drop in prices last year. There's a lag time between price decreases and how that translates into lowered production totals. Some earnings from oil production are better than none. But lowered demand is not exactly an ideal solution for economies around the world. Sellers can't sell if buyers aren't or won't buy, and that tends to have a drag on sellers relying on income from buyers. Not exactly astrophysics. Something's gotta give.
And as I and others have pointed out, the decline in both price and demand has lead to the suspension if not cancellation of a significant number of oil production projects. If they aren't producing, we're not getting, and in due course that fact will take care of whatever glut we're experiencing now. It will also cause problems on the flip side if and when demand picks up, or even if it remains essentially level.
We could of course keep on waiting until we're at the "too much chaos" stage to start considering what we might need to do going forward. Or, we could start having honest and meaningful conversations pre-chaos in order to both understand what lies ahead, and start planning for it without the stresses and challenges associated with "too much chaos."
Good to have options....
Adapted from a blog post of mine