Campbell's is the best book BY FAR on oil depletion, read THE COMING OIL CRISIS, by C. J. Campbell; Multi-Science Publishing Company & Petroconsultants, 1997 ISBN 0906522110 See a review and order it now from Amazon books: http://www.amazon.com/exec/obidos/ISBN=0906522110/3088-4711339-639335 Here is a sample: ---------------------------------------------------------------- SHOCK In an ideal world, governments would properly study the resource base and understand the principles of depletion. They do not, and in democratic societies cannot, because they are elected for short terms and are therefore motivated to deliver short-term benefits to their electors. As a consequence, it is most unlikely that the governments of either the United States or the European Union will adopt an energy policy with the aim of preparing for the inevitable peak in oil production and subsequent scarcity. It will therefore be left to the Middle East producers to alert the World to its predicament. They wont do so for an altruistic purpose, but simply to raise their revenues. Motive apart, their action will carry an important message. I don't think that their message will be delivered in small doses, nor can it be, given the efficiency of the new oil commodity markets. It will be the marginal barrel that sets the price. Quite a small shortfall could trigger a strong reaction. There will be nothing to counter it: oil will suddenly be in strong demand and the traders will hourly mark up its price as more buyers than sellers appear in the bullpen. Probably, as prices rise the buyers would at first hold back, but since their physical stocks are now so low, they could not do so for long. The market would move into contango whereby the futures would be above the present. That itself would deliver a message, which the sellers would pick up, holding back on physical delivery. It would spiral upwards as a crisis feeding on itself. Where would it end? POST-SHOCK The epoch immediately following the shock will likely see great volatility. There will be no shortage of comment, informed or otherwise, and it will be a field day for radio and television panel discussions. Mr Clinton may launch a few more missiles at someone. He might send in the marines to occupy Saudi Arabia. But it would all be posturing and gesture. If Exxon, backed by the marines, found itself controlling the world's oil supply, what would it do? Put up the price. There would be a flurry of new exploration in the hope that old solutions would again come to the rescue: they won't. But gradually, the realities will filter through. The Third World will be hit first: their oil-based energy consumption will begin to falter. We already have an example of what happened to Cuba when cheap Russian imports ended with the collapse of Communism. "Cuba has become an undeveloped country. Bicycles are replacing automobiles. Horse-drawn carts are replacing delivery trucks. Oxen are replacing tractors. Factories are shut down and urban industrial workers resettled in rural areas to engage in labour intensive agriculture. Food consumption is shifting from meat and processed products to potatoes, bananas and other staples" [ 2 ] It won't be so rosy in the developed world either. A permanent doubling or more in the price of oil, followed by growing physical shortages, must lead to a major economic and political discontinuity in the way the world lives. It heralds the end of rampant and mindless consumerism in the more developed countries, and will bring great suffering to the Third World. Every effort will be made to find alternative and renewable sources of energy. Nuclear power will be increased, although not fast enough to deal with the crisis. It will itself later become resource constrained by the finite quantities of uranium. Coal mining will be stepped up with adverse environmental consequences, especially in places like China where the power stations lack adequate smoke filters. The use of renewable energy will expand rapidly and successfully. The greatest progress will however have to be made in terms of using less. The World will become a very different place with a smaller population. The transition will be difficult, and for some catastrophic, but at the end of the day the world may be a better and more sustainable place. That seems to be a logical interpretation, but is it the correct one? I don't know, but I hope that the discussion which you have so patiently read will prompt you to think about it. I further hope that, having thought about it, you will make some provisions to protect yourselves as well as you can. I have discussed it with my broker, but I have to admit that we do not know what to do.
