The economic effects of peak oil are as obvious as they are frightening. The most immediate effect is to increase oil prices, and this has its own effect of slowing the economy down. There was a period in which Saudi Arabia could modulate the world’s rate of oil production by turning up the flow, but even that is a thing of the past. Oil prices jump up and down in response to rumors and temporary conditions — the worldwide economic slowdown has tamped them down a bit over the past few years — but the overall pattern is a steady price increase, all other things being equal….
We should understand that peak oil has probably already occurred, and we will be spending the rest of our lives, and our children their own lives, dealing with the consequences.
But we avoid the long term relevancies. There was plenty of oil yesterday and there will be enough today to maintain a modest lifestyle, and we all hope that there won’t be another big oil shock very soon….How do we prepare?