When demand outstrips supply, the price of oil will skyrocket - double or triple - in a short time unless alternative energy sources are available. (Peak oil theory).
- "Low-cost reserves of oil are being rapidly exhausted, forcing oil companies to turn to more expensive sources of oil. This replacement of low-cost sources of oil with higher-costs sources is driving the price of oil higher" and that "there is a risk that the world economy may be at the start of a cycle of supply crunches leading to price spikes and recessions, followed by recoveries leading to supply crunches".
"By keeping some of the cheapest oil off the market with its quotas, OPEC forces more expensive reserves to be used to meet demand, increasing the price of oil and their profit.
"The price of oil will continue to rise as the world is forced to turn to more expensive sources of oil for the marginal supply even if demand remains constant as low-cost reserves are exhausted and more expensive sources replace them"
Nearly 65 percent of the world's oil production takes place in 30 countries that are not democracies. These countries tend to be less stable, increasing the chance of disruption to oil infrastructure. The large oil producers nearly all rate very poorly on the Corruption Perceptions Index.Corruption is an obstacle to oil infrastructure investment in many of these countries."
New Zealand Parliamentary Report 2010:The next oil shock?
To increase their profits, parts of the fossil fuel industry has systematically tried to prevent development of alternative energy sources during the last decades. Their successful lobbying, especially in the USA, has made our societies increasingly vulnerable to peak oil situations and reckless speculation. In addition this "system" is sending billions of dollars every day to extreme, fundamentalist and terrorist-supporting dictatorships that tend to be formed in most oil producing countries
There are rumours that new drilling technologies may help oil companies exploit previously not profitable but huge oil field, especially when the oil price is above USD 80 per barrel. If so, peak oil will be postponed for some years. The serious economic shocks of peak oil might be partly avoided with more time for a shift to renewable energy sources. However, those who hope that peak oil will solve the problem of climate change will be disappointed.
The fossil fuel lobby
The energy inner circle controlling about 90% of the world's energy is a small group of probably less than 100 persons. That means they all know each other personally, and together plan for profit maximisation. National, political or religious affiliations are of secondary interest to most of the persons within this small but very powerful and heterogeneous group. - "According to observers ... Wahhabism gained considerable influence in the Islamic world following a tripling in the price of oil in the mid-1970s and the progressive takeover of Saudi Aramco in the period from 1974 to 1980. The Saudi government began to spend tens of billions of dollars throughout the Islamic world to promote Wahhabism, which was sometimes referred to as "petro-Islam"
With fields in most other parts of the world in decline, the United States reached its "peak," or maximum sustainable output in 1971. Production from the Persian Gulf became increasingly essential for the smooth operation of the global economy.
ARAMCO, the Arabian American Oil Company was founded in 1933 by John D. Rockefeller, owner of Esso, the world's richest man at that time, and the Saudi Arabian Royal family. Aramco is thought to be by far the world's most profitable company
- Peak coal?
Recent studies suggest that high-quality accessible coal reserves will run out much sooner than predicted by official forecasts from the main coal-producing countries. Global demand is growing rapidly, mainly driven by China.
Nature Nov 2010: