FLASHBACK FRIDAY: AN INTRODUCTION TO PEAK OIL
Everyone has their own stipulation about peak oil. It can be interpreted as delayed or dead, depending on the factors you are referring to. Peak oil is a theoretical point in time when the global oil production starts to dwindle after reaching its peak. An excerpt from American geologist and geophysicist Marion King Hubbert’s peak theory, the concept highlights oil production will hit an inevitable downfall at some point in time.
Let’s expound on the following ideologies depicting peak oil.
Crude alternatives become more cost efficient, making exploration and operation no longer profitable and valuing oil out of the market;
New deposits are difficult to obtain and existing reserves begin to decelerate; and
All reserves have been maximized and are nowhere to find.
The first idea indicates this situation is not that bad as perceived by individuals who have greatly participated or invested a considerable amount of money in crude. Whether there are still reserves or not, expect the market to beef up peak oil. There’s more to oil than a mere gasoline. Bear in mind chemical compounds and lubricants will keep oil pumping alive regardless if vehicles or vessels find other means. Unless there is a new technology which can turn the industry upside down, production is still on the safe side.
Now, on to the second situation. It is said there are only few cheap, huge oil deposits left here on earth. Good thing the technology unceasingly evolves, finding new ways to explore resources. In the United States alone, companies use fracking, which is not available in other countries yet. New trends mean greater investments. Hence, peak oil is not expected to be visible in the near future.
What if all crude reserves have been exploited? Far from impossible! Sure, we may run out of tools to make use of oil or options to dig deeper. But one thing is certain: oil will remain. Trust the market to come up, discover with alternatives, or mount various explorations.
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