The needle and the damage done

The hastening end of the Petroleum Age, a scenario that always has been confidently rejected by the global oil industry, is becoming harder to ignore.

This has little if anything to do with a world crude oil price poised to cross the $100 (U.S.) per barrel threshold. Oil, which closed last week at $98.18, is still below its all-time inflation-adjusted high of $102 per barrel set in April 1980. Which means it has taken 27 years for oil to recover to its previous peak price – six years longer than it took for stock prices to regain their losses during the Great Depression.
If anything, the sticker shock motorists have experienced at the pumps in recent years doesn’t yet reflect the enormity of a crisis in oil that even industry and pro-industry government agencies are beginning, finally, to acknowledge.

The world is not running out of oil. But, sooner than expected, it will run short of the kind that is easily and cheaply tapped, a day of reckoning some experts predict will be upon us early next decade – in the blink of an eye for a capital-intensive industry that thinks decades into the future.

Long before that point, before pools of conventional oil already in decline are depleted altogether, consumers, governments and the industry will have to make some very tough decisions (see “What”). We are close to a tipping point.

Toronto Star