Crude oil closed today at $129.07 a barrel, up $2.02 over yesterday. It seems like only yesterday that oil was flirting with the $100 mark and here we are pushing $130 a barrel with $200 a barrel most likely this summer. I've been harping about Peak Oil for quite some time and I'm not going to quit anytime soon. I cannot say it enough so I'll say it once more: World oil production has been on a plateau since May of 2005 despite a steady increase in demand. As oil has risen, demand has started to fall in Europe, North America and Japan but not in India, China or the Middle East. Countries like Sauid Arabia, Venezuela, China and Iran subsidize their oil, often making it as cheap as 15 cents a gallon. Needless to say, there is no demand destruction in those places and that's enough to offset any destruction in what used to be the primary users of oil. Thus the increase in the price of oil.
It's unknown how long we'll stay on this bumby plateau, some signs point to one last hurrah, a last surge in oil production before going into terminal decline sometime around 2010. A lot of new megaprojects are just now coming online and for a year or two, they will be enough to offset the steady decline out of Mexico, Russia, Iran and the North Sea. But the thing is, those projects just won't be able to replace what appears to be a Saudi Arabia in decline. The Kingdom has said that they plan to save substantial oil reserves for future generations and just last week, they laughed at George Bush when he begged them to open the taps. Regardless, as oil demand grows in oil producing countries, they will begin to export less and less oil. Should Saudi Arabia's mighty Ghawar, the king of all oilfields, begin to show signs of serious decline, well, we're just fucked.
Anyways, to put things into perspective, it's important to remember that oil isn't just used for transportation, it pretty much impacts everything we use in everyday life. Everything that you see around you, everything that you touch, eat, watch, play with and work with is impacted by oil in some meaningful way. Here's just a small list of products that are directly made from oil. These are products that will be in short supply once oil begins its terminal decline in the next couple of years:
Air conditioners, ammonia, anti-histamines, antiseptics, artificial turf, asphalt, aspirin, balloons, bandages, boats, bottles, bras, bubble gum, butane, cameras, candles, car batteries, car bodies, carpet, cassette tapes, caulking, CDs, chewing gum, cold, combs/brushes, computers, contacts, cortisone, crayons, cream, denture adhesives, deodorant, detergents, dice, dishwashing liquid, dresses, dryers, electric blankets, electrician’s tape, fertilisers, fishing lures, fishing nets, fishing rods, floor wax, footballs, glues, glycerin, golf balls, guitar strings, hair, hair colouring, hair curlers, hearing aids, heart valves, heating oil, house paint, ice chests, ink, insect repellent, insulation, jet fuel, life jackets, linoleum, lip balm, lipstick, loudspeakers, medicines, mops, motor oil, motorcycle helmets, movie film, nail polish, nylons, oil filters, paddles, paint brushes, paints, parachutes, paraffin, pens, perfumes, petroleum jelly, plastic chairs, plastic cups, plastic forks, plastic wrap, plastics, plywood adhesives, refrigerators, roller-skate wheels, roofing paper, rubber bands, rubber boots, rubber cement, rubbish bags, running shoes, saccharine, seals, shirts (non-cotton), shoe polish, shoes, shower curtains, solvents, solvents, spectacles, stereos, sweaters, table tennis balls, tape recorders, telephones, tennis rackets, thermos, tights, toilet seats, toners, toothpaste, transparencies, transparent tape, TV cabinets, typewriter/computer ribbons, tyres, umbrellas, upholstery, vaporisers, vitamin capsules, volleyballs, water pipes, water skis, wax, wax paper