And it will happen sooner than you think. Are you ready?
A recent piece in Supply Chain Digest states that oil prices (are) set to soar according to Dr. Fatih Birol, the chief economist at the International Energy Agency, and Dr. Birol is right. About every decade we get a new peak, and the last two decades have seen faster boom and bust cycles. Plus, now that international shipping is now consuming 20% of all oil production, we’re not only draining reserves faster than expected, but getting close to the point where we will be consuming oil at full production capacity. There are only so many fields and so many rigs and we can only pump it so fast.
Now, I don’t think the “oil crunch” will start as early as 2010, primarily due to the fact that this recession is going to linger a little longer, but I do think we could see it as early as 2012, which, of course, will make the new age conspiracy theorists (or is that the true believers) squeal with delight, especially if it peaks at the end of the Mesoamerican (Maya) Long Count Calendar on December 20, 2012.
It’s not that unlikely, given that IEA’s recent assessment of over 800 major oil fields, that cover three quarters of the global reserves, found that most have already seen production peaks and that the rate of oil production decline is now running at nearly twice the pace that was calculated a mere two years aga. These are unsustainable levels, and with the lack of new exploration and development by the major oil companies, it is extremely likely we could see oil prices skyrocket within two years.
So, are you ready?