The Peakoil Theory
The peak oil theory describes what is expected to happen once the production of oil reaches its peak and begins to decline. Oil is a non-renewable resource that is widely used and on which many countries such as the US rely for their energy. Since there is only a limited amount of oil available in the world, at some point it will run out.
World oil production has been increasing rapidly during the 20th century. The peak oil theory is based around the fact that as the oil reserves decline, there will be a point at which the rate of production will peak. It will then have to start declining.
The peak oil theory has attempted to predict not only what the results of this decline in the availability of oil will be, but also when it is likely to happen. Most estimates of the date when peak oil will be reached suggest that is will happen within the near future, or even that it may have already been reached. The estimates are based on the known oil reserves that are available in the world, so they may change if more oil is discovered somewhere. However, even the more optimistic peak oil estimates place in within the 2020s. Oil is being used up very quickly, and peak oil has already been passed in many parts of the world. Peak US oil production, for example, has already been reached and passed. World production is expected to peak soon.
The peak oil theory has also suggested what the consequences of the peak and decline in oil production are likely to be. One of the first effects that is likely to be experienced is an increase in oil prices. Usually when oil prices go up, production increases in order to take advantage of the higher profits that can be made. This helps to lower the prices again. After peak oil, it will not be possible to increase production, so the prices will stay high, and they are likely to get higher as the production rate continues to decline further.
Another important consequence of peak oil is that the amount of oil that is available in the world will decline. As less oil is available and the price of the oil increases, alternative sources of energy will need to be found to take their place. If countries such as the US, which are heavily dependent ton oil, do not find suitable alternatives, then energy consumption will have to be reduced. This could have serious consequences for business and industry, as well as affecting the lifestyles of the general public. Fuel for cars and other vehicles will become expensive and difficult to obtain, which will make it difficult for people to continue driving as much as they do today, unless some other form of power for vehicles is discovered and made commonplace. Use of power in the home for heating, cooking and other activities, will also become more expensive.
In oil producing countries, the effects of peak oil will also have serious economic consequences. Although the higher oil prices could initially be beneficial, the decline in production and use of oil will eventually result in the loss of an important sector of the economy in these countries.
Once peak oil has been passed, the world will need to turn to alternative types of power.