Where are we going with this oil thing?
On Sunday afternoon I was headed back from Salt Lake and stopped at a convenience store in Springville to fill up with gas, just as every red blooded Carbonite does on their way home from the big city. The price on the pump read $1.99.9.
I had to wonder if it was the last time I would ever see gas below $2 again.
After attending the BLM scoping meeting on oil shale and tar sands Thursday evening at the Holiday Inn in Price, I have to say I have been thinking a lot more about the oil situation this country is facing. Each time I read news reports or information about the oil imports, and where the next reserves will come from, I feel like I did when I was in elementary school as parents and administrators talked about the possibility of going to year-round school. In other words I get a pit in my stomach.
Being a car lover, and in particular a muscle car lover, I remember what it was like in 1973 when the first oil interruption, or the Arab Oil Embargo as is called today, occurred. Suddenly my friends and I went from cruising State Street in Salt Lake with our big V-8 cars to buying Vegas and Pintos, hoping we could fill our tanks with our minimum wage salaries and still pay our tuition at the U.
But that was just the start of it. That was a time when people started talking about alternative energy sources in earnest; electric cars, solar power, bio-diesel, etc.
We all talked a lot about it, but we did little, because even though gas had gone from 25 cents per gallon up to over 50 cents and even higher, most Americans just thought of it in terms of a cost increase rather than a true shortage, despite the fact that long lines and shortages did take place in some areas of the country.
As I stood at that pump, filling up my mid-size American car that today gets 32 miles per gallon, I thought about how unfathomable it would have been for me at 21 years of age to imagine gas costing $2 a gallon and thinking it was a real bargain. But it is, and some day I will look back at that price and long for the good old days.
Some researchers I read about say that most Americans will continue to gripe as the price for gas goes up, but that it will only affect our driving habits substantially when it hits between $6-7 per gallon.
That is truly scary. Most Americans are unaware that, based on most research, maximum possible oil production in the world will reach it's peak in the next two years and then decline rather rapidly. Now we are driving more vehicles than ever, more miles than ever, in a world where the primary power for those vehicles comes from a source of energy that is going to, for all intents and purposes, run out in a couple of generations. And even if it doesn't completely run out, it will become so expensive that only the rich will be able to afford it.
Unless we change our ways, and start to convert to non-petroleum based power for our vehicles, some of us could end up with vehicles that are still having payments made on them that we will not be able to afford to drive.
The demand for gasoline isn't just an American problem though; just imagine an emerging Chinese middle class of 300 million people that want the same kind of life we have. Each time you buy an item from a store that is made in China you are helping them to pursue that dream just a little farther.
In 2004 the worldwide demand for petroleum grew by 2.8 million barrels per day or a growth factor of 3.5%. That was almost double what the average growth per year was in the past. That growth, mostly coming in the form of consumption from the Indo-China area of the world, took away any illusions that there is overproduction going on. Every barrel of oil that is being produced is now being used. At the production rate of 84 million barrels worldwide per day (or 30 billion barrels a year) the supply, and more importantly the exploration for more, cannot keep up with the demand for much longer.
Some experts say we won't know when the world will be at it's peak production and then start to go down hill for some time after it occurs. Other "experts" say it has already happened and we just don't know it yet. We just need to face the fact that it will continue to cost us more and more, and that gasoline will someday be a hard commodity to find as well. Welcome to the world of Mad Max.
There goes that pit in my stomach again.