As global consumption of oil continues to increase because of new demand from countries like China and India, the US military worries that by 2015, demand for oil will outweigh the world’s ability to supply it. In other words, peak oil is real.
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander, General James N Mattis.
It adds: “While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India.”
The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with “an intellectual foundation upon which we will construct the concept to guide out future force developments.”
The warning is the latest in a series from around the world that has turned peak oil â€“ the moment when demand exceeds supply â€“ from a distant threat to a more immediate risk.
If we think gas at $3 or $4 a gallon is expensive here in the US, imagine per gallon prices of $10 or more. Many would look at this number as fear mongering, but consider that the price of gas in western Europe is currently hovering around $7.
Is $10 a gallon gas possible?
At the top of the 2008 oil bubble, when oil was trading at $140, residents of the EU were paying from $9 to $10.25 per gallon. So yes, it is not unreasonable to suggest that prices in the US could go just as high in the future, even without a major oil crisis. With new green agendas like cap & trade on the table and government revenue shortfalls, it is not out of the question that government action alone could lead to massive price increases over the next few years.
Couple that with a loss in purchasing power of the dollar and increased demand from the 2 billion strong populations of China and India, and you can see where the long-term trend is headed.
The US military should be concerned, because as we saw in 2008, high gas/oil prices can literally crush economies. And if the military is right, and peak oil is just around the corner, then the latter half of this decade should be quite interesting.
Investigative journalist Michael Ruppert’s documentary Collapse deals with the subject of peak oil and the end result, which basically boils down to economic collapse, societal upheaval and the potential collapse of political systems around the world.
Everything from global transportation systems to tupperware is dependent on oil, and any significant increases in the price of this essential commodity can literally bring the economic systems of the globe to a standstill.
The end result of peak oil, for those who are concerned, will inevitably be a fight for resources, especially among the USA, China, India, Europe and Russia. China, for example, is already working with the Russians to ensure they will have supplies pumping in directly from their neighbors. And Russian President Vladimir Putin, last week, signed a $1 Billion oil development deal with Hugo Chavez, the President of Communist Venezuela. Even President Obama sees the danger of peak oil, recently reversing his campaign pledge to not drill off the shores of the US, and has committed to oil exploration along the coasts.
Peak oil is an issue that should not be taken lightly. For the last 100 years the world has been sucking the ground dry, and it is only a matter of time before oil, at a reasonable cost to the general population, runs out.
Hat tip SHTF reader Greg B.