The Peak Oil Crisis: As Summer Ends

The economic news has been relatively quiet in recent weeks. The wild plunges in the various indexes that were happening last winter have subsided. The financial writers and cable networks are busy interpreting or, where necessary, spinning each new economic report as yet more evidence that the recession is nearly over.

Oil prices have been hovering around $70 a barrel of late and gasoline has been selling for circa $2.65 a gallon since June -a dollar less than this time last year. This must be a satisfactory price, for given the decrease in world prices for goods and services in the last year, OPEC has stopped complaining about low oil prices and has even been sneaking a touch more oil onto the world markets. U.S. gasoline consumption has been holding steady despite a major drop in economic activity — diesel consumption is down 10 percent so far this year – and millions being added to the unemployment rolls.

Lost in the din of “recovery is here” and “cash for clunkers”, much of the underlying economic news that will determine our future is simply being ignored – foreclosures, commercial property, unemployment, sales, and industrial production. Interest rates, government securities, and the stock market are all being propped up by the Federal Reserve’s monetizing of the national debt. The realization is growing that it is going to take decades, at best, to get out of this mess.

Among the more dramatic news is the growing realization that instead of centuries worth of coal reserves, worldwide coal production may start declining in as little as 15 years. Here in the U.S. our Geologic Survey recently reported that production of saleable Appalachian coal may begin declining within the next ten years. We had better learn to live with fewer, dimmer lights, less or more efficient air conditioning and drying our clothes in the backyard. We are going to have a hard time building enough wind generators fast enough to keep up with declining coal production.

Falls Church News-Press