This is an article from the UK Times I ran across online this morning. Are things really geting that bad? The news is full of bad economic predicters. Oil going thru the roof, food prices rising and shortages in different parts of the world, The continualy dropping value of the dollar. A freind of mine told me last night that there is an email going around predicting a crash of the stock market by the 3rd quarter.  My question is "Are we really heading where this article says??"

I agree except I think Wall Street is just reacting to something bigger. I have been looking into the theory of Peak Oil ( or Hubbert's Peak) lately and I am about convinced that we are at or slightly past that point. In a nut shell (and simplified):

1. from the time an oil field is found it continues to produce increasing amounts of oil each year until it peaks out, & then it enters what is called "Terminal Decline", meaning that each year it puts out less and less until it is no longer profitable to maintain the well (due to low production). Peak is on ave found 40 years after the start of the field

2. The world as a whole "peaked" in the number of oil feilds found in the 1960's. Once again each year after fewer and fewer ones were found.

3. 80 % of all oil wells in the world have already peaked and are in decline. This as demand continues to rise puts more pressure on the ones that have not peaked, causeing them to be overworked and to peak sooner.

4. The final result is that once we are not able to produce enough oil to meet the demand worldwide (which is increasing exponentially with China and India growing by leaps and bounds). The price will go thru the roof. Most experts I have read predicted that the world would peak somewhere between 2004 and 2010. Many are now saying that we are at or have just passed Peak right now.

That is simplified but the consequences are staggering. Just think about how many things we make from oil. One of the first signs predicted that we would see when we reached peak is that oil would go over 100 dollars a barrel. It is there. It is affecting the price of everything else right now too. We use it to plant, fertilize, harvest, transport, and process our food. We use it to make most plastics, fibers in our shirts, well, da*n near everything.

Another sign that I been looking at is that the oil companies are going back and checking old wells for crude. They are also putting money into the lesser grades of crude. Light Sweet crude is the grade A of oil. As long as there was plenty of it around it was not worth the investment to go after the "Grade B" or "Grade C". Well the oil companies are developing the lesser grades now. The tar sands in Canada is one fine example. It takes alot more effort and energy to get a barrel of oil out and convert it into our products than it does for light sweet crude. The fact that they are spending the money and developing these means that it is now cost worthy to do this because there is not enough Light Sweet to fill demand. Even the oil companies are coming out now and saying we are about at peak.

Youtube cartoon on peak oil; http://www.youtube.com/watch?v=Ulxe1ie-vEY

Cheveron brochure; http://www.chevron.com/Documents/Pdf/RealIssuesAdTrillionBarrels.pdf

http://www.smartmoney.com/decode/?story=20070216

http://www.energybulletin.net/26455.html

http://www.energybulletin.net/7388.html