Oil Peaks At Over $75 A Barrel
Oil has peaked at over $75 a barrel today. This certainly should fuel prices well over $3 a gallon in most of the U.S. And on the East Coast, some shortages of gasoline supplies have even boosted some gas prices to over $4 a gallon in Brooklyn, New York.
Not only does this indicate that China is very concerned about tensions with Iran that could threaten it's chief oil supply outlet. China's economy which grows at an average rate of 10% per year, while the U.S. grows at slightly over 3%, uses 6.5 million barrels of oil a day for transportation, heating, and manufacturing. The U.S. uses 20 million barrels a day.
Since 1977, when the "peak oil" level was surpassed, extraodinary means have been used to maintain oil well production at previous levels. The giant Ghawar oil field in Saudi Arabia is only able to maintain acceptable production levels by pumping 4.5 million barrels of seawater into the oil well each day to raise the oil level up. In Russia and other countries, the main oil wells have witnessed steadily lower oil well output even with the pumping of gasses or air injection to raise oil production levels.
With declining production from nearly all of the world's oil wells since the 1977 "peak oil" production breakpoint, and as China is set to become the world's largest industrial economy by 2042 or possiby sooner, there is hardly enough oil supplies in the world to satisfy all the world's oil demands if a nation such as China required even 1/2 of the oil demands of the U.S. per person. This alone would account for 40 million barrels a day of oil. If China used oil in the same proportion as the U.S. demand, then this would account for 80 million barrels of oil a day. There simply is not the oil reserves available in the world to satisfy such a future huge oil demand.
The small French company that has developed a compressed air powered automobile, www.theaircar.com, and experiments with hybrid technology and alternate fuels become even more important as a serious fossil fuel crisis in both supply and demand level is developing. This problem is both real and very serious.
And in the past, serious political problems over shortages of materials and commodities have even helped to spur serious war as well. Japan attacked the U.S. at Pearl Harbor when the U.S. cut off scrap steel exports to this nation. Britain decided to create and occupy the nation known as Iraq in 1922 after it had defeated the Turkish Ottoman Empire and oil had been discovered in the region. This led to Britain involved in combat difficulties in Iraq until a bloody 1958 rebellion forced British troops to withdrawal from the region. If the U.S. intended to invade Iraq partially to bolster it's presense in a region to counter Iranian control of one side of the Strait Of Hormuz that may have been seen as vital to maintaining the pipeline of oil to the U.S. economy, then most Americans were unaware of a conflict in Iraq that could cost the lives of U.S. soldiers for decades.
The political, economic and war and peace prospects of a shortage of world oil supplies and steep oil prices can in no way be understated. This is indeed the beginning of a serious world crisis with some very serious implications for the future.