The Coming Oil Crisis

 

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Canadian economist Jeff Rubin has a somewhat oracular reputation. Since 2000, he has predicted a massive oil-price spike, and he was among the first in 2007 to prophesy that oil would soar over $100 per barrel (a few months later, he said $150 a barrel and was basically proved right again). Now, even though oil has dropped considerably from its peak, Rubin warns that it's bound to skyrocket once more and cause another, even greater economic crisis. In his new book, Why Your World Is About to Get a Whole Lot Smaller, he lays out how this energy crunch will occur—and why it will spell the end of globalization.

The scenario goes something like this: the ongoing depletion of the world's oil resources, coupled with soaring demand from emerging economies like India and China, will send the price of crude through the roof, Rubin says. This will seriously escalate transportation costs, which in turn will cripple international trade, reverse commercial interdependence and disable the global economy. The resulting age will be one in which nations are isolated, technological progress is sluggish and travel is infrequent. The Middle East will be less relevant than it is today, and food scarcity will emerge as the foremost international problem. Countries with a shortage of arable land will scramble and compete to buy agricultural real estate from other nations (for example, as Saudi Arabia is already now doing in Sudan) to alleviate their ever-worsening food crises.

Rubin's future isn't all bad. To offset the effects of the energy crisis, governments will have to invest heavily in national infrastructure (especially public-transportation systems); national industries once hurt by outsourcing and foreign competition will thrive; and the environment will become cleaner as people are forced to use less fossil fuel and as cars disappear from the streets. But Rubin warns that governments can do only so much—successful adaptation to an energy-starved world will largely depend on individuals altering their energy-consumption norms. Still, he is willing to bet that people will make the right choices. All in all, he says, "don't be surprised if the new, smaller world that emerges isn't a lot more liveable and enjoyable than the one we are about to leave behind."

Rubin's argument is powerful. There's no denying that the international economy has become critically dependent on oil as its main source for energy. Yet, like other believers in the "peak oil" theory, he falls into the trap of underestimating society's capacity to meet future fuel challenges through innovation and conservation. The story of energy over the past century has been one of breakthroughs, not retreat—so although the energy problems we face today should be a cause for concern, global integration will continue to deepen and the world is not likely to get smaller any time soon.

© 2009

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  • Posted By: whitehawk @ 07/02/2009 12:16:29 AM

    2008 oil consumption: 85 million barrels of oil per day
    42 gallons equals one oil barrel
    55 gallon steel drum: 22??? wide by 3??? tall
    A mile is 5,280 feet long
    Circumference of the earth is 24,901 miles
    Speed of sound 768 mph

    Take the 85,000,000 bbl of oil & times it by 42 gal in a barrel to equal 3,570,000,000 total gallons of oil used everyday.

    Divide these total gallons by steel drums
    3,570,000,000gal / 55 gal steel drum = 64,909,090 drums of oil consumed each day.

    at 3 feet tall it takes 1,760 drums laid end-to-end to build a pipeline one mile long: 5280???/3??? = 1,760 drums

    Daily consumption of oil in drums divided by the number of drums in a mile:
    64,909,090 drums/1,760 drums in a mile = a 36,880 mile long pipeline worth of drums laid end to end being consumed every day

    Circumference of the earth is 24,901 miles

    At 85,000,000 barrels per day, in one year???s worth of consumption enough oil drums could be filled to make the trip around the world 540 times: (36,880 miles * 365days)/24,901 = 540

    36,880 miles / 24 hours in a day = 1,537 miles every drum would need to travel each hour to cover the 36,880 mile distance in a 24 hour period.

    1,537 miles / 768 mph speed of sound = 2 or twice the speed of sound.

    To sum: at 85,000,000 barrels worth of daily consumption you could build an oil pipeline using steel drums 36,880 miles long (or approximately 1.5 times the circumference of the earth), and since you???d be replacing this pipeline???s volume every day the crude oil flowing through it would be traveling at twice the speed of sound! And in one year's worth of production you would use enough drums to encircle the earth 540 times.

    Now, who in their right mind believes just half that amount will be replaced using bio fuels?

    The US uses 20 million barrels per day but only 5.1 million is produced domestically. The US roadway fleet uses 10 million of that 20 million. IOW, all other things remain the same, Obama and D.C. could outlaw all roadway transportation - motorcycles, cars, trucks, and SUVs - and close every gas station they'd eliminate 10 million out of the 20 million barrels of daily consumption. BUT at only 5.1 million barrels being produced domestically the US would still have to import 5 million barrels per day...or half its oil consumption.

  • Posted By: mpg50 @ 06/27/2009 10:39:31 AM

    An Immediate Fix For The Oil Crisis While We Develop Alternate Fuels.

    Save 75 Cents/Gallon At The Pump This Summer & Cut Pollution By 90%

    Thirty-seven years ago during the 1973 Oil Crisis- http://video.yahoo.com/watch/53792/1453429 -we developed a fuel enhancer. We call it MPG50. When added to gasoline or diesel fuel, it provides many benefits including a mileage boost of 20% to 30%, a several point octane boost & up to 90% exhaust pollution reduction. It is very cost-effective & widespread use of MPG50 could cut American dependence on foreign oil by 35%. See: http://www.youtube.com/watch?v=mSQh4zQcThc

    Buy a $25 trial bottle of MPG50 & get a $40 Gas Rebate Voucher good at any gas station in North America. You make a $15 profit for trying MPG50. With $3.00/gallon gas prices a bottle of MPG50 saves 75 cents/gallon & since 1 bottle treats 160 gallons, you save $120 in gas or diesel fuel.

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    God Bless America

  • Posted By: dan2429 @ 06/24/2009 11:02:39 AM

    Oh Please, anyone can have a doomsday theory, especially if it makes them money by selling their book!

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