Life After the Oil Crash
Part I: Peak Oil and the
Ramifications for Industrial Civilization
I have designed the following passages with somebody new to the issue of oil depletion in mind. If you would like more in depth explanations, with graphs, charts and the like, please consult The Oil Age Is Over: What to Expect as the World Runs Out of Cheap Oil, 2005-2050.
What is "Peak Oil"?
All oil production follows a bell curve, whether in an individual field or on the planet as a whole. On the upslope of the curve, production costs are significantly lower than on the downslope when extra effort (expense) is required to extract oil from reservoirs that are emptying out. Put simply: oil is plentiful and cheap on the upslope, scarce and expensive on the downslope. The peak of the curve coincides with the point at which the world's endowment of oil has been 50% depleted. “Peak Oil” is the industry term for the top of the curve. Once the peak is passed, oil production begins to go down while cost begins to go up.
In practical and considerably oversimplified terms, this means that if 2000 was the year of Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world's population in 2020 will be both much larger (approximately twice) and much more industrialized than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin.
The more demand for oil exceeds production of oil, the higher the price goes. Ultimately, the question is not “When will we run out of oil?” but rather, “When will we run out of cheap oil?”
Click here for more information on oil production curves.
When will Peak Oil occur?
The most wildly optimistic estimates indicate 2020-2035 will be the year in which worldwide oil production peaks. Generally, these estimates come from government agencies such as the United States Geological Survey, oil companies, or economists who do not grasp the dynamics of resource depletion. Even if the optimists are correct, we will be scraping the bottom of the oil barrel within the lifetimes of most of those who are middle-aged today.
A more realistic estimate is between the years 2004-2010. Unfortunately, we won't know we hit the peak until 3-4 years after the fact. Even on the upslope of the curve, oil production varies a bit from year to year. It is possible that worldwide oil production peaked in the year 2000 as production has dipped every year since. The energy industry has quietly acknowledged the seriousness of the situation. For instance, in an article recently posted on the Exxon-Mobil Exploration homepage, company president Jon Thompson stated:
By 2015, we will need to find, develop and produce a volume of new oil and gas that is equal to eight out of every 10 barrels being produced today. In addition, the cost associated with providing this additional oil and gas is expected to be considerably more than what the industry is now spending.
Equally daunting is the fact that many of the most promising prospects are far from major markets — some in regions that lack even basic infrastructure. Others are in extreme climates, such as the Arctic, that present extraordinary technical challenges.
If Mr. Thompson is that frank in an article posted on the Exxon-Mobil Webpage, one wonders what he says behind closed doors. The Saudis are no less frank than Mr. Thompson when discussing the imminent end of the oil age. They have a saying that goes, "My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."
Big deal. If gas prices get high, I'll just carpool or get one of those hybrid cars. Why should I be concerned?
Almost every current human endeavor — from transportation, to manufacturing, to electricity, to plastics, and especially food and water production — is inextricably intertwined with oil and natural gas supplies.
A. Oil and Food Production
In the US, approximately 10 calories of fossil fuels are required to produce 1 calorie of food. If packaging and shipping are factored into the equation, that ratio is raised considerably. This disparity is made possible by an abundance of cheap oil. Most pesticides are petroleum- (oil) based, and all commercial fertilizers are ammonia- based. Ammonia is produced from natural gas, a fossil fuel subject to a depletion profile similar to that of oil. Oil has allowed for farming implements such as tractors, food storage systems such as refrigerators, and food transport systems such as trucks. Oil-based agriculture is primarily responsible for the world's population exploding from 1 billion at the middle of the 19th century to 6.3 billion at the turn of the 21st. As oil production went up, so did food production. As food production went up, so did the population. As the population went up, the demand for food went up, which increased the demand for oil.
Within a few years of Peak Oil occurring, the price of food will skyrocket as the cost of producing, storing, transporting, and packaging it will soar.
For more on oil and food production, read the following articles when you get the chance:
1. "Eating Fossil Fuels" by Dale Allen Pfeiffer
2. "The Oil We Eat" by Richard Manning
B. Oil and Water Supply
Oil is also needed to deliver almost all of our fresh water. Oil is used to construct and maintain aqueducts, dams, sewers, wells, as well as to pump the water that comes out of our faucets. As with food, the cost of fresh water will soar as the cost of oil soars.
C. Oil and Health Care
Oil is also largely responsible for the advances in medicine that have been made in the last 150 years. Oil allowed for the mass production of pharmaceutical drugs, surgical equipment and the development of health care infrastructure such as hospitals, ambulances, roads, etc. . . .
D. Oil and Everything Else
Oil is also required for nearly every consumer item, sewage disposal, garbage disposal, street/park maintenance, police, fire services, and national defense. Thus, the aftermath of Peak Oil will extend far beyond how much you will pay for gas. Simply stated, you can expect: economic collapse, war, widespread starvation, and a mass die-off of the world’s population.
What do you mean by "die-off"?
Exactly what it sounds like. It is estimated that the world's population will contract to between 500 million and 2 billion during the Oil Crash. (Current world population: 6.4 billion)
Are you serious? That's as much as 90% of our current population. How could that many people perish? Where does that estimate come from?
That estimate comes from biologists who have studied what happens to every species when it depletes a key resource in its environment. Two notable examples are explained below:
Example A: Bacteria
Bacteria in a Petri dish will grow exponentially until they run out of resources, at which point their population will crash. Only one generation prior to the crash, the bacteria will have used up half the resources available to them. To the bacteria, there will be no hint of a problem until they starve to death. Before that happens, the bacteria will begin cannibalizing each other in last-ditch efforts to survive.
But humans are smarter than bacteria, right? You would think so, but the facts seem to indicate otherwise. The first commercial oil well was drilled in 1859. At that time, the world's population was about 1 billion. Less than 150 years later, our population has exploded to 6.4 billion. In that time, we have used up half the world's recoverable oil. Of the half that's left, most will be very expensive to extract. If the experts are correct, we are less than one generation away from a crash. Yet to most of us, there appears to be no hint of a problem. One generation away from our demise, we are as clueless as bacteria in a Petri dish.
Example B: Easter Island
Over the course of history, many human populations have suffered from die-offs. The die-off most analogous to our current situation is the one that took place on Easter Island during the early 18th century. Easter Island was discovered by western civilization in 1722 when Dutch explorer Jacob Roggeveen landed on the island. At the time, Roggeveen described the island as a wasteland. The islanders he encountered led a particularly primitive existence, even by 18th-century standards. The island had no firewood, few species of plant life, and no native animals larger than insects. The islanders possessed no wheels, no draft animals, few tools, and only 3-4 flimsy, leaky canoes.
Despite the barren existence, Easter Island was populated with huge, elaborately constructed, stone statues. Roggeveen and his crew were completely perplexed by these statues, as it was clear whoever built them had tools, resources, and organizational skills far more advanced than the islanders they encountered. What happened to these people?
According to archeologists, Easter Island was first colonized by Polynesians sometime around the year 500 AD. At the time, the island was a pristine paradise with lush forests. Under these conditions, the island's population grew to as much as 20,000. During this population bloom, the islanders used wood from the forest trees to power virtually every aspect of a highly complex society. They used the wood for fuel, canoes, houses, and; of course, for transporting the huge statues. With each passing year, the islanders had to cut down more and more trees as the statues became larger and larger.
As the trees disappeared, the islanders ran out of timber and rope to transport and erect their statues; springs and streams dried up, and wood was no longer available for fires. The food supply was also diminished as land birds, large sea snails, and many seabirds disappeared. As timber for building seagoing canoes vanished, fish catches declined and porpoises disappeared from the dinner table. With the food supply greatly diminished, the islanders resorted to cannibalism to sustain themselves. The practice became so common that the islanders would insult each other by saying, “The meat of your mother sticks between my teeth.”
Before long, local chaos replaced centralized government, and a warrior class took over from the hereditary chiefs. By around 1700, the population began to crash toward between one-quarter and one-tenth of its former number. People took to living in caves for protection against their enemies and the statues were torn down in clan warfare. Once the home of a highly complex society, Easter Island had turned into an atoll of the barbaric.
As UCLA Medical School Professor Jared Diamond has explained:
Easter Island looks like a metaphor for us today. The islanders were isolated in the middle of the ocean with nobody to turn for help, with nowhere to flee once the island collapsed. In the same way today, one can look at Planet Earth in the middle of the galaxy, and if we too get into trouble, there's no way we can flee, and no people to whom we can turn for help out there in the galaxy.
I still can't imagine that number of deaths. It's just too ghastly to imagine. Only 10% of us are going to make it? How can that possibly be?
I know how you feel. This is all very difficult to handle, both emotionally and intellectually. As former UK environmental minister Michael Meacher recently stated, in an issue of Financial Times, “It's hard to envisage the effects of a radically reduced oil supply on a modern economy or society. The implications are mind-blowing.” Perhaps the following explanation, while considerably over-simplified, will help illustrate the future we are marching towards.
As explained above, worldwide oil production follows a bell curve. Thus, if the year 2000 was the year of peak production, then oil production in the year 2025 will be about the same as it was in the year 1975. The population in the year 2025 is projected to be roughly 8 billion. The population in 1975 was roughly 4 billion. Since oil production essentially equals food production, this means that we will have 8 billion people on the planet but only enough food for 4 billion.
With that in mind, visualize the following situation: you, me, and six other people were locked in a room, with only enough food for four of us. At least four of us will die from starvation. Another one or two will likely die as we all fight each other for what little food we have. That's what will happen if we are fighting with just our fists. Give each of us weapons, and you can imagine what that room will look like when we’re done with each other.
Clearly, we have a real problem, but you're describing the worst-case scenario, right?
I'm describing the most likely scenario. The worst-case scenario is extinction, as the wars that will accompany the worldwide oil shortage will likely be the most horrific and widespread that humanity has ever experienced.
Where are you getting this information from? Who else is talking about Peak Oil? What type of backgrounds do they have? How do I know they’re credible, not crazy?
When you are done with this site, I encourage you to do a Google search for “Peak Oil.” You will find, much to your dismay as well as my own, that everything you read in this site is supported by an analysis of hard facts reported by highly respected sources. Some of the more notable sources are described below. As you will see, this is not the usual “end of the world/the sky is falling” crowd.
In fact, the most troublesome aspect of Peak Oil is there seems to be a correlation between an individual's credibility and scientific background and the degree to which they are concerned (even terrified) by the ramifications of Peak Oil:
A. Dr. David Goodstein: Professor of Physics and Vice Provost of Cal Tech University
ABC News interview with Goodstein
B. Matthew Simmons: Investment Banker, Energy Advisor to George Bush, Member of Dick Cheney's Energy Task Force
August 2003 interview with Simmons
Simmons' complete February 2004 Power Point Presentation on Peak Oil
Complete Index of Simmons' essays on Peak Oil and related issues
Video and Transcript of an Interview with Matt Simmons
C. Dr. Colin Campbell: Former Exploration Geologist for Texaco, Chief Geologist for Ecuador, and Founder of the Association for the Study of Peak Oil and Gas
Over 35 Newsletters on Peak Oil by Dr. Campbell
Over 15 Articles on Peak Oil by Dr. Campbell
Video and Transcript of an Interview with Dr. Campbell
D. Articles from Mainstream News Publications
*Over 50 Articles From Publications Such as The San Francisco Chronicle, The Los Angeles Times, Barons, New York Times, Newsweek, The Financial Times, The Washington Post, Business Week, etc. (click on "Articles")
Are you only getting this information from "left wing" sources?
Watch those interview with Bush's Energy Advisor, Matt Simmons. Simmons describes himself as a "lifetime Republican" and a big fan of George W. Bush.
Peak Oil was not on my radar screen till I realized that both Matt Simmons and Michael Moore are both extraordinarily concerned about this situation.
Anytime an avowed leftist and liberal icon like Michael Moore is in complete agreement with a member of the Bush administration, it's safe to say the shit has hit the fan.
Is it possible that we have already hit Peak Oil and are now in the first stages of the Oil Crash?
Yes. Ample evidence exists that we are already crashing:
A. Declining Oil Production
In May 2003, at the Paris Peak Oil Conference, Princeton Professor Kenneth Deffeyes, author of Hubbert's Peak: The Impending World Oil Shortage, explained that Peak Oil actually arrived in 2000 by noting that production has actually been declining since that time.
It is likely that we are now in the "Petroleum Plateau", which is the top part of the bell curve that is almost flat. We will begin going down the downslope of the curve at some point between 2005-2020. Unfortunately, it's likely to be sooner than later.
B. Drastically Revised Estimates of Oil & Natural Gas Reserves
In October 2003, CNN International reported that a research team from Sweden's University of Uppsala has discovered worldwide oil reserves are as much as 80% less than previously thought, that worldwide oil production will peak within the next 10 years, and once production peaks, gas prices will reach disastrous levels. In January 2004, shares of major oil companies fell after Royal Dutch/Shell Group shocked investors by slashing its "proven" reserves 20 percent, raising concerns others may also have improperly booked reserves. A month later, energy company El Paso Corporation announced it had cut its proven natural gas reserves estimate by 41 percent.
C. High Oil and Gas Prices
In March 2004, the price of oil hit $38 a barrel, the highest since 1991. The average nationwide price of a gallon of gasoline in America reached a record high of $1.77 this month. In some parts of the country (San Francisco, CA.), gas has already hit $2.40 a gallon. Many analysts are predicting gas prices will exceed $3.50 a gallon by the summer of 2004.
D. High Unemployment
You can think of "Peak Oil Production" as a synonym for "Peak Job Creation." As of December 2003, the "adjusted" unemployment, which has been squeezed out of as much meaning as conceivably possible, still hovers in the 6% range. However, if you factor in the quality of employment, then the real numbers are closer to 12%-15%. We need to create over 250,000 new jobs per month just to keep up with population growth. Creating new jobs is essentially impossible now that oil production is peaking. Without an excess supply of energy, the economy cannot grow, and the necessary number of decent paying jobs cannot be consistently created.
From time to time, there will be months such as March 2004, when a healthy number of jobs are created. These months, however, will not happen consistently, ever again.
The rolling blackouts experienced in California during fall of 2000, the massive East Coast blackout of August 2003 and the various other massive blackouts that occurred throughout the world during late summer of 2003 are simply a sign of things to come.
F. Reduced Food and Chemical Production
World grain production has dropped every year since 1996-1997. World wheat production has dropped every year since 1997-1998. Recent food price hikes in China could be the sign of a coming world food crisis brought on by global warming and increasingly scarce water supplies among major grain producers. Last year in the US, a quarter of the US fertilizer factories shut down permanently, and another quarter were idled until prices settled back following a spike in natural gas prices.
(Source: Richard Heinberg, "Oil and Gas Update", Museletter Number 142, January 2004)
If you were to look at any one of these pieces of evidence in isolation, it would not tell you much about the situation the world is in. However, when you look at all of them together in the context of Peak Oil, the fact that we are already crashing becomes obvious.
If you want to watch the crash as it unfolds, just check Breaking News.
What about the oil in the Arctic National Wildlife Preserve (ANWR)? If the environmentalists got out of the way, couldn't we just drill for oil there?
At current rates of oil consumption, the ANWR contains enough oil to power the US for only six months. The fact that it is being touted as a "huge" source of oil underscores how serious our problem really is.
What about the oil under the Caspian Sea? I heard there was a massive amount of oil underneath it.
As recently as September 2001, the Caspian Sea was thought to be the oil find of the century. By December 2002, however, just after US troops took Afghanistan, British Petroleum announced disappointing Caspian drilling results. The "oil find of the century" was little more than a drop in the ocean. Instead of earlier predictions of oil reserves above 200 billion barrels, the US State Department announced, "Caspian oil represents 4% of world reserves. It will never dominate the world's markets."
Furthermore, the area has the potential for wars and disruptions that could make the Persian Gulf look tame by comparison. Unstable countries surround the Caspian, including Russia, Kazakhstan, Turkmenistan, Uzbekistan, Iran, and Azerbaijan. Proposed pipelines to carry the oil run through hotspots such as Afghanistan, Pakistan, Turkey, China, Russia, Ukraine, Bulgaria, and Kyrgyzstan. Meanwhile, the region is isolated and unforgiving, so the expenses associated with drilling would be enormous.
Despite these monumental obstacles, oil is becoming so scarce that even the disappointingly modest amounts located in the Caspian Sea will remain extremely important from a geopolitical standpoint.
What about so-called "non-conventional" sources of oil? Doesn't Canada have an enormous amount of this type of oil?
So called "non-conventional" oil, such as the oil sands found in Canada and Venezuela, is incapable of replacing conventional oil for the following reasons:
1. Non-conventional oil has a very poor Energy Profit Ratio and is extremely difficult to produce. It takes about 2 barrels of oil in energy investment to produce 3 barrels of oil equivalent from those resources. The cost of Canadian non-conventional oil projects is so high that in May 2003, the oil industry publication Rigzone suggested, "President Bush, known for his religious faith, should be praying nightly that Petro-Canada and other oil sands players find ways to cut their costs and boost US energy security."
2. The environmental costs are horrendous and the process uses a tremendous amount of fresh water and also natural gas, both of which are in limited supply.
3. Although non-conventional oil is quite abundant, its rate of extraction is far too slow to meet the huge global energy demand Dr. Colin Campbell estimates that combined Canadian and Venezuelan output of non-conventional oil will be 2.8 million barrels per day (mbd) in 2005, 3.6 mbd in 2012, and 4.6 mbd in 2020. These are drops in the bucket, given today’s consumption of 75 mbd, which is expected to increase to 120 mbd by 2020.
I just read an article that states that known oil reserves keep growing. What do you have to say about that?
That article is most likely citing data from sources that are about as reliable as an Enron accounting team.
A. United States Geological Survey (USGS) and Energy Information Agency (EIA) "Cooking the Books"
In recent years, the USGS and the EIA have revised their estimates of oil reserves upwards. This has led many observers and commentators to believe that the possibility of severe oil shortages is a thing of the past.
While USGS and EIA reports on past production are largely reliable, their predictions for the future are largely propaganda. They admit this themselves. For instance, after recently revising oil supply projections upward, the EIA stated, "These adjustments to the estimates are based on non-technical considerations that support domestic supply growth to the levels necessary to meet projected demand levels."
In other words, they predict how much they think we're going to use, and then tell us, "Guess what, nothing to worry about — that is how much we've got!"
B. Certainly OPEC Wouldn't Cook the Books?!
The USGS and the EIA aren't the only parties guilty of "cooking the books." For instance, during the late 1980s, several OPEC countries drastically increased their reported oil reserves with no corresponding major oil discoveries. Why was this? The reason is that an individual OPEC member’s quotas are proportional to their proven reserves. Since the larger the quota, the more money they can earn, this obviously gave them a strong incentive to 'adjust' their figures. As Dr. Campbell and Jean Laherrere have explained, "such reserve growth is an illusion."
Is it possible that there is still more oil left to be discovered?
Almost certainly not. According to a recent report from the Colorado School of Mines entitled The World's Giant Oilfields, the world's 120 largest oilfields produce almost 50% of the world's crude oil supply. The fourteen largest account for over 20%. The average age of these 14 largest fields is 43.5 years." The reserves in the world's super-giant and giant oilfields are dwindling at an average rate of 4-6 percent a year. The study concludes that "most of the world's true giants were found decades ago."
Matthew Simmons has stated succinctly, "All the big deposits have been found and exploited. There aren’t going to be any dramatic new discoveries, and the discovery trends have made this abundantly clear." On a similar note, according to Dr. David Goodstein, "Better to believe in the Tooth Fairy than the possibility of any more large oil discoveries."
(Source: Dr. David Goodstein, Out of Gas, p. 35)
Is it possible that things might get better before they get worse?
Yes. Once an oil find is made, it takes about 5 years for production to come online. As stated in the previous question, the last remotely decent year for oil finds was 2000. This means the last decent year for new production to come online will be about 2005. By 2008-2010, those projects will be in decline.
I heard that some scientist has a theory that fossil fuels actually renew themselves. If that's true, wouldn't it cast doubt on the validity of Peak Oil?
The scientist you speak of is a man by the name of Dr. Thomas Gold. In his 1999 book, The Deep Hot Biosphere, he proposes a theory that oil comes from deep in the Earth’s crust, left over from some primordial event in the formation of the Earth, when hydrocarbons were formed. If his theory were true, it would mean that fossil fuels are actually renewable resources.
Unfortunately, his theory has been proven to be false, time and time again. As Steve Drury, who reviewed Gold's book for Geological Magazine, puts it:
Any Earth scientist will take a perverse delight in reading the book, because it is entertaining stuff, but even a beginner will see the gaping holes where Gold has deftly avoided the vast bulk of mundane evidence regarding our planet's hydrocarbons.
When asked about the validity of theories such as Gold's, Dr. Colin Campbell responded:
Oil sometimes does occur in fractured or weathered crystalline rocks, which may have led people to accept this theory, but in all cases there is an easy explanation of lateral migration from normal sources. Isotopic evidence provides a clear link to the organic origins. No one in the industry gives the slightest credence to these theories: after drilling for 150 years they know a bit about it. Another misleading idea is about oilfields being refilled. Some are, but the oil simply is leaking in from a deeper accumulation.
Finally, the deep-earth hypothesis has a fatal flaw: If oil were, indeed, formed under intense heat and pressure in the center of the Earth, it would tend to disintegrate as it rose from the regions of high temperature and pressure to the benign, cooler, low-pressure world closer to the Earth's surface.
(Source: Lita Epstein, The Politics of Oil, p. 22)
Didn't the Club of Rome make this exact same prediction back in the 70s?
In 1972, the Club of Rome (COR) shocked the world with a study titled The Limits to Growth, which concluded that:
1. If the population continued to grow and industrialize as it had been, society would run out of renewable resources by the year 2072. A mass die-off would ensue.
2. Even if the supply of resources was magically doubled, a collapse would occur as a result of pollution.
Often, whenever somebody makes an "end of the world"-type prediction, they are derided as a "Club of Romer." This is extremely unfortunate, as it appears the COR turned out to be correct. Says who? None other than Matthew Simmons, who stated in 2000, "In hindsight, The COR turned out to be right. We simply wasted 30 important years by ignoring this work."
We had oil problems back in the 1970s. How is this any different?
The oil shortages of the 1970s were the results of political events. The coming oil shortage is the result of geologic reality. You can negotiate with politicians. You can threaten, blockade, or invade Middle East regimes. You can't do any of that to the Earth.
As far as the US oil supply was concerned, in the 70s there were other 'swing' oil producers like Venezuela who could step in to fill the supply gap. Once worldwide oil production peaks, there won't be any swing producers to fill in the gap.
The "end of the world" is here, once again. So what's new? Y2K was supposed to be the end of the world, and it turned out to be much ado about nothing.
What's new is that this is the real thing. It isn't a fire drill. It isn't paranoid hysteria. It is the real deal. .
Peak Oil isn't "Y2K Reloaded." Peak Oil differs from previous “end of the world” scenarios such as Y2K in the following ways:
1. Peak Oil is not an “if” but a “when.” Furthermore, it is not a “when during the next 1,000 years,” but a “when during the next 10 years.”
2. Peak Oil is based on scientific fact, not subjective speculation. The individuals sounding the alarm are scientists, not psychics.
3. Government and industry began preparing for Y2K a full 5-10 years before the problem was to occur. We are within 10 years of Peak Oil, and we have made no preparations for it.
4. The preparations necessary to deal with Peak Oil will require a complete overhaul of every aspect of our civilization. This is much more complex than fixing a computer bug.
5. Oil is more fundamental to our existence than anything else, even computers. Had the Y2K predictions come true, our civilization would have been knocked back to 1965. With time, we would have recovered. When the oil crash comes, our civilization is going to get knocked back to 1765. We will not recover, as there is no economically available oil left to discover that could help us recover.
How quickly will things collapse?
Many people mistakenly believe that anarchy will set in the moment we pass the peak. While such a scenario is highly unlikely, things will get dicey early on.
Capitalism is by far the best economic system on the planet. This doesn't mean it's invincible. Although a market economy is superior to all other economic models, it has an achilles heel: if it lacks the energy it needs to grow, it collapses very quickly. Even a 1-2% energy shortfall can have catastrophic effects on an economy that requires growth.
Once we pass the peak, oil production will decline by 1.5-3% per year. Demand, however, will continue to increase by 1.5-3% per year, every year. This equates to an additional 3-6% shortfall every year.
That means 10 years after the peak, we will have between 30-60% less oil than we need. 15 years after the peak, we will have between 45-90% less oil than we need.
Even if, by some miracle, oil production remains at its current level for the next 10 years, we will have between 15-30% less oil than we need by the year 2014, as demand will continue to go up, regardless of what happens to production.
The market won't address this situation until these shortages actually hit. By then, it will be too late - the economy will be completely devastated. There will be no money or energy to invest in the modest alternatives we have available.
This inability of the market to resolve this for us is explained in greater depth on Page II and Page III.
To make matters worse, natural gas is set to run out in the next few years, while coal is set to get very expensive. (...)