Lower gas prices won’t last forever, economists warn

…”As soon as the world economy turns around, then prices will shoot higher again,” said economist Ken Mayland of ClearView Economics LLC in suburban Cleveland. “As soon as those economies pick back up, we’re going to be right back in the soup.”

Mr. Mayland is talking about the economic theory of peak oil, the belief that oil production will or already has reached its maximum, and that as production declines, prices will rise accordingly. Peak oil theory, first proposed in 1956, may play out in a series of wildly speculative price swings that grow increasingly volatile over time, proponents say.


“World crude oil production stopped growing in 2005. It’s hard to hide that one behind the curtain,” argues Ken Deffeyes, professor emeritus of geology at Princeton University and a longtime proponent of the peak oil theory.

Peak oil theory

Advocates of peak oil theory believe that efforts to keep oil production high by extracting oil from more exotic locales, such as shale oils in Canada and the deep seas off Brazil, won’t be able to keep up. And as demands for oil rise from a population that uses it for everything from transportation fuel to plastics to agriculture, competition for ever decreasing resources will increase exponentially.

Toledo Blade