I wonder, as I walk by the Chevron station on Gayley and Le
Conte avenues, just how many of my UCLA colleagues realize what the
frightening $3.439 per gallon price really means.
Most people I speak to tend to think of it as a temporary
annoyance ““ a peak fluctuation in the market due to some
nebulous and ambiguous “issues in the Middle East.” I
wish to present a better explanation and I can only hope a few of
you will consider it.
Phillip Bowman, head of ScottishPower, expects oil prices to
reach $100 per barrel of crude oil within a year, and economist Lee
Heng Gui of CIMB Securities forecasts $90 per barrel by the end of
2006. A barrel of oil is currently priced at just about $70, and
about a year ago it was just under $50. In 2000, it was at just
about $30 per barrel of crude. If you recognize a disturbing trend,
you’re not alone. The steeply rising price of oil, which, by
the way, is an international malaise and not attributable to the
U.S.’s “issues in the Middle East,” is the result
of a global peak in the production of oil. Up until about now, the
global oil yield has largely exceeded demand.
As production yields level off and begin declining, demand
continues to grow at unprecedented rates. And with the recent
addition of a super-industrial China (now the second-largest oil
consumer after, of course, the U.S.) and the prospects of an
industrialized India, the world will soon be facing a scenario akin
to you and 15 friends competing over the crumbs of the last Diddy
Riese cookie ““ one that costs $20. It won’t be
pretty.
The end of cheap oil is upon us. Some may say there are still
sizeable reserves in the earth. But what is being overlooked is
that the oil left in the earth is extremely difficult and expensive
to find, to extract, and to refine. It would probably take more
than a barrel’s worth of oil to extract a barrel from the
currently untapped reserves. If you have to use a barrel’s
worth of oil to get a barrel out, all you’ve made is an
expensive mess.
Also be wary of oil substitutes. Hydrogen is actually
impractical as a replacement. The industrial processes required for
hydrogen production require heavy inputs of fossil fuels. The most
important thing for us to be skeptical of is a complete surrender
of faith to the free market, which many of us are relying on to
magically create a replacement in the nick of time.
As the U.S. developed, the proliferation of industry became
increasingly reliant on oil not only as fuel, but also as a
lubricant and a by-product. Our entire way of life is completely
and utterly dependent on a cheap, abundant supply of fossil fuel.
Once that supply stops, so does our entire way of life.
Consider all the ways in which you use fossil fuel-derived
products in your everyday life. They fuel and lubricate cars, they
are used in fertilizers and pesticides. Pharmaceuticals and
plastics use oil. Oil is the massive rug on which we all stand
that’s just about to be pulled out from under us.
Deel is a fourth-year English student.