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    just me duncan drennan's Avatar
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    Peak oil

    I've never quite understood the term "Peak Oil", but this blog post put it pretty clearly for me,

    For the past few months I have been reading all I can about Peak Oil. The basic idea is that the global oil supply will soon (around 2010) be less than oil demand. As oil is so fundamental to our lives (all transport, manufacturing, fertilisers for agriculture) this will cause big problems. Some people think modern society will end (literally), others predict a global depression, and some the death of the suburbs as the world reconfigures itself for a low energy lifestyle.

    Here are some common predictions that I rate as plausible:

    • Oil prices will sky rocket, like over $150/barrel, causing the price of everything to increase, i.e. high inflation.
    • Stock markets tumble as every stock is based on the assumption of continuing economic growth sustained by cheap energy.
    • Widespread unemployment as whole industries collapse, i.e. “demand destruction”. Starvation in less developed countries (no fertilisers)
    • People with very high debt levels (the norm in Australia) will be in deep trouble. Overpriced housing markets collapse. The “perfect storm” for a modern economy.
    • As the taxation base decreases the government will be less help. For example they won’t be able to fund a switch to renewables, pay unemployment benefits, fix blackouts.


    After a few months of research I am convinced Peak Oil is for real. While I am not in the survivalist camp (I think modern society will pull through) my best guess is that there will be very tough times for the world economy.

    Read the full blog post on Beer, Coffee and a little DSP
    For more info you can also look at Peak Oil on Wikipedia.

    What I never realised was how close (2010) the predictions are for the peak oil event to occur. Even the optimistic predictions are 2020-2030. It does not leave us with much time before oil prices start climbing dramatically.

    So how much are Sasol shares at the moment?
    Last edited by duncan drennan; 28-Sep-07 at 01:27 PM.
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