$140+ per barrel - the end of the world as we know it?

[macsen rufus]

One of the advantages of living on a mountain of oil is that things like this only makes me smile

According to the CIA factbook, Norway is sitting on 7.7 billion barrels, proven in 2008. BP figures show global consumption at 31 billion per year. That makes your "mountain" worth three months, or to put it another way, it delays the peak by a whole six weeks.

2007 Oil Reserves stand at 1237.9 billion barrels
Reserves have grown 107.8 billion barrels since 2001 and 168.5 billion barrels, or 14%, over the last decade.

Even proven reserves amount to less than 40 years at current consumption. How old will you be in 40 years? Does the thought of sky-high prices or oil scarcity at that time of your life really make you smile? Even if we could somehow DOUBLE the reserves, that might add another 40 years.

Now, we know there are problems with the reserve figures - OPEC especially has had very good cause to to exaggerate their holdings in the past, as this is what determines their export quotas. And they have proved incapable of turning up the production by any significant amount. And I'm sure you realise that oil companies need new reserves to maintain share prices, it's a treadmill, yet there's more effort going into "marketplace acquisitions" than exploration. Mergers, acquisitions and "corporate cannibalism" are the order of the day, and this is not normally associated with a healthy sector of the economy.

Although the past performance doesn't guarantee future returns, we should also compare growth rates. 1997-2007, average 1.4% pa more reseves. 2007 consumption grew by 1.1% globally. That 0.3% sounds good doesn't it?

We're looking at a diminshing EROEI (energy return on energy invested) as newer finds are in deeper water, further from land, or harder to crack. Tar sands have an EROEI as low as 1.5:1, shales are technically difficult. Basically the new reserves aren't a like-for-like replacement of sweet Saudi crude, and that has to eat into the 0.3%.

No-one is suggesting the taps will run dry overnight. But small shortfalls in supply have large impacts on price, and price knocks on through the economy. A lot of people are going to be hurt badly, especially in the more oil-dependent societies. EVERYTHING depends on oil - agriculture (ironically the more "backward" agrarian areas are better placed to survive, they already know how to farm without huge energy subsidies...), manufacturing, communications, transport, and yes, even renewable energy. We will need to make some very wise energy-investment decisions, placing our energy in industiries which will generate more energy. Other sectors will need to de-intensify their energy use, agriculture especially - the only option will be more human labour, more people working the land again (gardens are more productive than farms on all measures).

If there is to be much of a future, it will have to be low-tech, localised and co-operative. The SUV of the 22nd century will probably have two wheels, a chain, and pedals