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What is peak oil?
Oil is an essential commodity that humanity cannot do without, and it has brought about a big change in the global environment. Peak oil is a situation where the extraction of oil from the existing oil reserves is at maximum, and from this point onwards, the production of oil dwindles. During this period, the demand will either remain constant or go up, but with high demand and few new oil discoveries, the supply will go down to the point of exhaustion.
The main issue
The main issue with peak oil is the depletion and dwindling of oil reserves. Since the Industrial Revolution, people have discovered new ways of doing things and even improving their health, which has led to a rapid increase in populations all over the world. The ever-growing populations require food, energy, transport, and manufacturing industries to support their living standards. Oil use is high in the transportation field, which sees a gradual increase in demand for oil due to the growing number of a personal vehicle, airplanes, trains, and ships. For example, this sector consumes approximately 68% of oil in the United States. The modern society entirely relies on petroleum for food production, transportation and travel, heating, lighting, and running of industries, among others. Due to this scenario, the supply of oil has been over stretched, which might lead to oil depletion (Herold 81). There is a need to develop hybrid engines and electric vehicles, thus encouraging the use of renewable energy in industries and for lighting at homes to reduce the consumption of oil.
The need for economic growth has led to the consumption of oil at a very high rate, which is much higher than what it is being supplied. There are fears that with the escalating depletion of oil resources, human activities may come to a deadlock. The increase in demand for oil without matching new oil discoveries caused the rise in prices for petroleum. For instance, in 2011, oil demand had increased to 85 million barrels, with a price of $100 per barrel (Greer 101). The increase in oil prices increased the cost of production, hence the rise in commodity prices and any other services that depended on petroleum products. This aspect has caused a global economic recession, which has greatly hindered international development. Furthermore, with the rise in the cost of living across the world, people are likely to resort to riots and strikes. The world governments have been under pressure to act swiftly to bring down the cost of living.
The cost of transportation and traveling has gone up, and people have been forced to pay more to sustain their simple lifestyles. Transportation and traveling via road, air, railway, and water have been a major contribution to economic development across the world. Also, through these forms of transport, tourism has flourished greatly. Commercial exchange of goods and services solely depends on transportation with trucks, ships, and cargo planes at the center of ferrying heavy loads across the continents. Rising oil prices causes a reduction in international business and lack of some commodities in various parts of the world. Finally, people will have to incur increased costs in heating and lighting their homes (Aleklett 73). In conclusion, peak oil is an energy crisis that has to be addressed by all stakeholders, viz. oil-producing companies and governments.
Aleklett, Kjel. Peeking at Peak Oil, New York: Springer, 2012. Print.
Greer, John. Not the Future We Ordered: The Psychology of Peak Oil and the Myth of Eternal Progress, London: Karnac Books, 2013. Print.
Herold, David. Peak Oil, Munich: Hurstelung und Verlag, 2012. Print.