Peak Oil Is Still Real, Despite Recent Speculation Frenzy

Peak Oil has made a lot of headlines lately. What is Peak Oil? It is not the name of a new oil company but a theory that says that at a certain point worldwide production of oil will hit a peak and will go downhill from that. Furthermore, since the world economy is growing the need for oil will keep rising, creating a severe shortage. Peak oil theorists believe that wars, famine and general hard times will follow. If you look at today's headlines it may seem as if they are right. Granted, much of the rise in the price of oil lately, as much as $40 per barrel can be blamed on speculators running up the price. Bubbles develop in any sector whether it is real estate, corn or Beanie Babies. Oil is no different but what is different is that it is a non renewable resource that is being used up.
Peak Oil has already happened, at least in the United States. In the late 1970's we went from a next exporter of oil to an importer as domestic production declined and the appetite for large, gas guzzling cars grew when people slowly forgot about the Arab Oil Embargo. Into the 1980's Washington threw open the doors to Middle East Oil and the death nail was driven into the US oil industry.
Now companies are drilling up US dirt like mad looking for more oil but not finding the easy to find stuff. Instead they have found an ocean of natural gas hiding in shale formations that were previously overlooked because horizontal drilling had not been developed.
What is the real price of oil, less the speculative price? The answer came a few weeks ago when Russia invaded Georgia and then confirmation came when hurricane Gustav took dead aim at the offshore oilfields.
The price barely wavered when Russia invaded a country that has a pipeline carrying 1/3 of the worlds oil supply. In past months that would have meant at least a twenty dollar rise. This told us that the speculators had lost their power to drive oil prices up, for the near term. Then hurricane Gustav took aim at the Gulf of Mexico and instead of sending oil prices spiraling upward there was only movement of a couple dollars.
Now it appears the real Peak Oil price of oil is right around a hundred dollars a barrel. Below one hundred, (which just a year ago was considered "crazy price territory") consumers will fall back into a false sense of security and put off buying more efficient cars. Peak Oil is like an enemy that advances and then makes a truce and swears peace, only to repeat the battle and advance a little more and make a truce again.
By the time or leaders and citizens realize what has happened it will be too late. Switching to alternative energy requires a lot of oil. An incredible amount of oil will be required just to make fiberglass wind turbines and the steel that they sit on. It is like some primitive island where the natives cut all the trees in the forest and burned them as a sacrifice to the volcano god and now need to build a life raft to leave the island and exploding volcano but don't have any logs. As our grandchildren look back at films of the year 2008 and prom queens riding in stretch Hummers they will wonder what the heck we were thinking as they fill up their motorcycles with $18 a gallon gas.
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