The price of gasoline has risen almost fifty cents since the start of 2012, and many analyst are predicting that national average per gallon could reach a record $4.25 per by late April (Kahn, 2012). Mainstream media typically attributes the rise in crude oil and gasoline prices to the volatility of international oil suppliers located in the middle east. And while there might be some truth to argument that oil prices have spiked recently as a result of growing tensions about Iran’s nuclear program (Jewell, 2012), the real underlying factor influencing rising prices is that growing demand for petroleum is outpacing the available supplies.
Without delving too deep into specifics, the concept of Peak oil theory holds that at some point the global community will reach a point of maximum worldwide petroleum extraction; as a result of this peak “the production of easily accessible oil and gas will not match the projected rate of demand growth” (Ross, 2011). Estimates of when peak oil production occurred or will occur range anywhere from 2005 to 2020 (Kuhlman, 2012).
Many individuals skeptical of this theory claim, among other things, that there are still large amounts deposits of oil that have yet to be discovered. These opponents of peak-oil theory believe that our technological capabilities will spur future discoveries and increased capacity for extraction. What these individual are failing to recognize is that “there have been no significant discoveries of new oil since 2002” (Kuhlman, 2012), and that the locations where new discoveries might be found—the ocean—are the most difficult and inefficient areas for extraction. For example, “oil and natural gas production fell 9 percent in the fourth quarter [of 2011]. That's despite the $20 billion a year the company has spent since 2007 to find new sources. At Chevron, production levels last year were the lowest since 2008” (Jewell, 2012).
“Oil and gasoline prices are expected to keep rising because global consumption continues to outstrip production.” (Jewell, 2012). It is not unfathomable to assume that prices could reach $5.00 per gallon by the middle of the summer, which will undoubtedly add to what is shaping up to be a highly contested and contentious presidential campaign, where energy and the economy will be the two most talked about issues. No one can say for certain when Peak Oil production will occur, as “gas and oil do not have to disappear entirely, nor do gas prices have to rise into the stratosphere before Peak Oil’s impact is felt” (Turcotte, 2012). It is likely that we are still a few years away from experiencing the severity of this impact, but sooner or later, we all will.
List of Work Cited
Jewell, M. (2012, March 2). Rising Gas Prices Aren't Lifting Big Oil Stocks | News | Manufacturing.net. Manufacturing.net | The Leading Source for Manufacturing News and Insight. Retrieved March 2, 2012, fromhttp://www.manufacturing.net/news/2012/03/rising-gas-prices-arent-lifting-big-oil- stocks
Kahn, C. (2012, March 2). The Associated Press: Gasoline prices rise for 24th day. Google. Retrieved March 2, 2012, from http://www.google.com/hostednews/ap/article/ALeqM5gdaBAArCNUc66IVYgkpHjitEob Nw?docId=8dacc3dddc504fc4a2254eacbd104a36
Kuhlman, A (2012, March 2). :: Peak Oil: The End of the Oil Age ::. :: Peak Oil: The End of the Oil Age ::. Retrieved March 2, 2012, from http://www.oildecline.com/
Ross, R (2011, March 2). Shell Study Affirms Peak Oil Theory | The Pelican Post. The Pelican Post: Louisiana Politics and Policy. Retrieved March 2, 2012, from http://www.thepelicanpost.org/2011/03/02/shell-study-affirms-peak-oil-theory-3/
Turcotte, R. (2012, February 8). Rising Gasoline Prices & The Phony Blame Game - Peak OilMatters. Peak Oil Matters - A fresh perspective on the concept of peak oil and the challenges we face. Retrieved March 2, 2012, from http://peakoilmatters