End Of Cheap Oil, The Global Energy Crisis And Climate Change

The increase in oil prices has led to protests, which have moved to the center stage of Indian politics, displacing the protests against reservations in medical and engineering colleges.

Increase in oil prices translates into higher prices of all commodities. As Hindustan Times reported oil price hike turns cereal killer (Hindustan Times, Wednesday, June 14, 2006, p.2 table). Yet the increase in oil prices in world markets is inevitable because the resource is dwindling and supplies have peaked, peak oil means the end of cheap oil, and an end to economies organized around the increasing availability of cheap oil.
Oil is a non-renewable resource. We have always known that yet the world has been behaving as if oil is in endless supply. And we in India who have lived in a biodiversity and biomass energy economy are rushing into oil addiction precisely when the global oil supply is running low and prices are running high.

The Association for the Study of Peak Oil (ASPO), an umbrella organization of oil expects, mainly geologists who helped find oil fields are now warning us that there are only a trillion barrels or less of oil left, and the supply will peak within this decade. “Peak Oil”, or the topping point, is the highest amount that can ever be pumped. Beyond “peak oil”, there will be an overall decline in production and an increase in oil prices. Oil that costs $5 per barrel to extract could become $ 100 per barrel when confidence in supply erodes and demand increases, and there is recognition that we are in a world of shrinking oil supplies, not growing supplies.

Why are we as a country tying our future to a resource that must shrink and become more costly? As we build more superhighways and mega cities, destroying the decentralized fabric of our socio-economic organization, we need to ask how long will this last?

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