Peak Oil

By Dan Shapley

Oil is a finite resource — it is produced by subterranean pressure over the course of millions of years. So what we've got is all we've got. Oil drillers go for the easy and most profitable crude first — the stuff that requires the least energy to pump out of the ground and the least refining to make into a useable product. When that is gone, what's left is harder and more expensive to get at and deliver to the market.

The peak oil theory says that when we've pumped about half the crude in the world, demand for oil keeps rising but the supply falters. Maybe it hits an "undulating plateau." Maybe it falls in fits and starts. Maybe it drops like a stone. Off a cliff. But it falls — leaving a widening gap between supply and demand. That will not only mean higher gas prices, but higher prices for just about everything because petroleum is the basis for many of the products we use. If oil runs short before there are alternatives available, expect big geopolitical shifts as nations vie for control of the oil reserves that remain.


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