Peak Oil: $ome Number$

[The] increased oil expenditure is drawing money away from the rest of the economy. Overall, were it not for the price increase [from the historical average of $25.00 per barrel], the US would have an extra $1.5 billion per day to spend in the broader economy, or $543 billion per year. Instead, all that money is being spent on expensive oil, which is distorting the economy. Is it any wonder oil-dependent economies are struggling to grow their economies? Could it be that expensive oil signifies the twilight of industrial growth, as we have known it…?
At the current price of $105 …, the world spends $9.45 billion per day on oil, or $3.5 trillion per year. This is a difference of $7.2 billion every day, an extra cost to the global economy which is largely a result of crude oil having peaked. It lacks credibility to pronounce the death of something that is costing the global economy $7.2 billion per day – or $2.6 trillion extra per year. (links/citations in the original) [1]

Once the conversation rises to the point where billions of dollars are being discussed, paying a bit more attention to the subject seems like a reasonable suggestion.

Imagine if our own economy had a few extra Trillion dollars available here at home? If one objects to the research totals, how about just half of a few trillion?

There are many benefits accruing to organizations or industries or nations in receipt of trillions of dollars. That’s especially true when the outlays to acquire such sums aren’t even close to matching. Several hundred billion or a trillion or so in profits is not a bad year’s worth of work! We might even find ourselves a bit giddy with delight right about now if those numbers were flowing in rather than out. But such are the realities of free market principles applied to (finite) energy resources.

While the numbers are eye-popping, there are of course some not-so-pleasing truths accompanying all that good news. Keep in mind it’s those high prices producing those awesome profits. Those are the same high prices we’re all paying … in an economy not nearly so kind to almost all of us.

Of course, not-so-high prices not only reduce the profits, they reduce if not eliminate even the possibilities of generating profits. High prices enable the industry to search out and produce the Plan B resources we’re increasingly relying upon because conventional crude oil supplies are on the decline.

Setting those realities aside (as if we could), imagine how much preparation and progress in countless other areas of our society might result if those outflowing dollars stopped flowing out? Of course, if prices were lower, we wouldn’t be having a conversation about the same totals, but we could still be discussing the possibilities of greater levels of investment and research into a broad range of technological and cultural improvements.

We might even be devoting more research, effort, and investments into alternative sources of energy. No guarantees of success, of course, but we’re going to eventually have to rely on alternatives and renewables because the expenses, efforts, and returns of increasingly harder-to-extract Plan B fossil fuels won’t justify the continuing investments of time, money, and manpower. All those wonderful-sounding gazillions of barrels of resources will stay right where they are.

The most obvious problems is that we’ll be at a point with inadequate supplies of what we’ve always relied upon to power up a massive transition we’ve done almost nothing to prepare for.

That suggests a problem or two which all of those billions and trillions today won’t help alleviate if we don’t start taking a longer and smarter look at the future. It will be here before we know it, and we’ll all agree that having planned and prepared for its arrival will be a much better alternative than chaos.

Unreasonable minds may and probably will disagree. Let’s hope—selfishly—they are very, very small in numbers.

Peak Oil Matters