PEAK OIL - What price will we pay?

By Ben Goldby on May 8, 09 03:07 PM

The Case

It is widely accepted that the modern world's unquenchable thirst for oil has left mankind facing a dilemma.
We are told that global oil production is nearing its peak, and that soon this most precious of resources will have run out.
As governments scramble to find alternative fuel sources, oil rich nations are enjoying a "black gold" rush.
The future scarcity of oil has handed the Organization of Petroleum Exporting Countries (OPEC), a blank cheque and left the oil markets in turmoil.
With the cost of oil soaring past the $100-a-barrell mark, the producers are recording record profits, while the public is facing unprecedented price hikes at the petrol pumps.
We are told that all of this is necessary, a market adjustment, an inconvenience born of the natural clash between decades of excess and a slowdown in oil production.
But there is another theory.
What if this oil peak is a myth, a spook story created by the multi-trillion dollar petrol companies and the oil rich nations that control the supply lines?
What if instead of a scientific, evolutionary fact, the idea of a peak in production is a tool to control the markets and keep pump prices high?
Surely such a conspiracy is unthinkable, who could orchestrate such a complex and dastardly plot?
If it was going to be done, it would require a group with massive sway over global financial markets, influence over the leading governments of the world, a huge amount of cash and a ruthless desire to exploit human suffering and poverty in order to make a profit.
Conspiracy theorists are torn as to who this group may be. The famed "illuminati", a shadowy cabal of New World Order devotees and the oil companies themselves are among the main candidates.
Whoever the conspirators are, the idea that peak oil is nothing more than a money-making myth drives right to the heart of the global economic meltdown we are currently experiencing.
If this is a conspiracy, then everything from politics to finance, from industry to the military is being manipulated, and that is a very worrying thought indeed.

The Official Story

The Hubbert Peak Theory, that there is a point of maximum oil production which will be reached in the next few years, has become the basis for the official story on peak oil.
The idea that oil demand is now, or soon will be, outstripping supply is widely accepted in the scientific community.
Repeated so often it has become an integral part of our understanding of global energy strategy, the bell-shaped Hubbert graph paints a clear, if worrying, picture of the future.
With the peak in oil production either imminent or already behind us, the supply of oil will become increasingly scarce.
As oil takes millions of years to form beneath the earth's surface, and the discovery of new, untapped oil fields becomes rarer, alternative fuels must be sought to satisfy the modern world's energy demands.
The Hubbert Peak Theory has spawned a global effort to find sustainable alternatives to oil, with governments around the world ploughing money into wind farms, solar power projects and ethanol production.

The Conspiracy Theory

With petrol prices sky high and OPEC nations demanding more than $100-a-barrell, it is not hard to see who benefits from the peak oil "conspiracy".
But theorists believe the hype about peak oil is not backed up by scientific fact, and that shadowy forces may be using the peak oil panic to control more than just the price of crude.
Many of those who believe that peak oil is a myth point to the fact that there are numerous untapped oil resources, but many of them are situated in hard to access areas of the earth's surface.
The snow plains of Alaska, the tar fields of Alberta Canada, and the vast wintery bleakness of Siberia all offer rich rewards for any firm that can tap them.
What may be running low is the easy to access crude oil fields that have so far offered oil companies cheap extraction costs and massive profits.
If oil is to continue to fuel our society, these out of the way spots will have to be exploited.
But the oil wells of Saudi Arabia are still producing enough to satisfy demand, as are the Russian rigs that continue to make billionaires of the wheelers and dealers who make up the former Soviet state's nouveau riche.
So if we are running out of oil, why hasn't the flow of crude stopped, and where are the fuel shortages we should be experiencing?
The conspiracy theory is simple, the vast globalized companies that rely on high oil prices for their sky high profit margins are deliberately misleading the public into believing they should be paying over the odds for their fuel.
The science has been manipulated, and the actual Hubbert Peak is centuries away. Oil executives and Arabian princes have created a panic about dwindling oil supplies to feather their own nests.
With the price of oil able to dictate the economic fortune of the world and even create wars in the Middle East, many theorists believe the people behind the peak oil conspiracy are in fact controlling much more than just the price of petrol.
Believers in many of the secret society theories believe that one of these shadowy cabals, either the Illuminati, the Skull and Bones Society or even the Freemasons, are using peak oil myth to control the global financial system, and pit nations against one another.

Pros

- The President of Saudi Arabia's national oil company, Abdullah Jum'ah, has said that he believes peak oil is not likely to happen for centuries. In January 2008 he said: "I do not believe the world has to worry about 'peak oil' for a very long time."

- "Oil doom" theories have been doing the rounds for 80 years. Numerous economists have dismissed the idea of "peak oil" as unfounded since the rate of consumption relies on political and financial factors, as well as scientific issues.

- The OPEC nations have an inordinate amount of power over the price of crude, and can therefore alter the global economic climate with the stroke of a pen or the click of a mouse.

- There are vast amounts of untapped oil that could satisfy our thirst for fuel in out of the way spots around the world. While these supplies may be difficult to extract, the huge rise in prices created by the peak oil theory means it is now profitable for companies to spend extra cash recovering this "difficult" oil.

Cons

- The Hubbert Peak Theory is widely accepted by both the scientific community and the governments of the world.

- It stands to reason that there can only be a finite amount of oil under the earth's surface, the planet is only so big. Whether it is imminent or many years away, the fact that oil supply will peak is inevitable.

- As a method of controlling nations through the economy, oil supply manipulation is extraordinarily risky. You cannot guarantee the outcome of a rise or fall in the price. If the Illuminati or the Freemasons are in charge, they would need a better tactic for securing their goals.

- Unprecedented investment in alternative energies, global conferences on energy policy and climate change, major scientific research projects and a worldwide consensus on the issue suggest peak oil is all too real.

Conclusion

It seems clear that the Hubbert Peak Theory is correct, and that oil production will eventually dwindle. Whether or not that point has arrived, will arrive soon or won't arrive for another thousand years is for geology students to argue about. The question here is has the peak oil theory been deliberately used to jack up fuel prices. It certainly hasn't harmed the profits of the oil companies and it may well have been used for a little price gauging, but there is nothing to suggest that peak oil is a myth created to control the global economy. It is simply a widely accepted scientific fact, and though the oil may still have hundreds of years to go, it is only sensible that governments begin to look beyond oil to fuel economic expansion in the 21st Century.