That’s what we’ve got until there is ‘significant risk’ of a decline in global oil production according to the UK Energy Research Council. We’ve seen lower oil production recently, of course, but the argument can be made (and it’s a good one) that it has more to do with the global economic slowdown versus inability to keep total production numbers up.
The report said the world had used less than half of the planet’s conventional oil, but the remaining resources would be more difficult and expensive to extract.
With exploitation of the world’s reserves running at more than 80 million barrels a day, even major new discoveries, such as in the Gulf of Mexico, would delay a peak by only a few days or weeks.
Robert Gross, of UKERC, said: “The age of easy and cheap oil is coming to an end. It doesn’t suddenly come to an end, but we’re moving to increasingly difficult and expensive oil.”
He said the public should expect to see higher and more volatile petrol costs in the future, with long-distance travel also becoming more expensive.
By 2020 my oldest child will be 18. By the time he turns 30 he (and all of us) could be living in a radically different world. The end of cheap petroleum and the end of the global dollar hegemony are just a few of the forces that will reshape the planet in the 21st century.
In the meantime, if you can manage to hold on to your job things won’t be too bad for some time to come. The economic slowdown has led to less inflationary pressure in the cost of living from what I’m seeing here in the great white north. Long-term, though, I think inflation is inevitable. The US government (and most of its citizens) have racked up huge debts that will be very, very hard to pay off, and if you pay attention to what the Fed is doing on Wall Street, it looks to be trying to monetize the debt as much as possible without triggering inflation and/or panic. The fact that oil prices are not in freefall and gold is showing strength are both votes of no confidence in the dollar. Combine this with the news reports and rumors floating around about the Gulf states not wanting to deal oil for dollars and stories about having a new global reserve currency and you can see that change is coming… just not the sort that Obama or anyone else promised.
The US standard of living has been based in large part on the ability to offload our debt obligations on other countries that need dollars for global trade. Once that comes to an end, there will be many debts that will be impossible to repay. This is a very bad thing in any fiat currency system, which relies on incessant expansion of the money supply to keep going.