Energy is the lifeblood of the world’s economy, the underlying means by which modern societies function. The interruption of supplies by natural or man-made events demonstrates how totally dependent we have become on the energy-consuming machines.
The skyrocketing gasoline and diesel fuel prices of winter and early spring 2000 are the direct result of a deliberate, if modest (about 4 percent), reduction in global crude oil production by the OPEC cartel.
The demonstrated sensitivity of oil product prices to a relatively small reduction in supply should serve as a sober example of what could well happen in the relatively near future when global crude production begins its inevitable decline, not as a result of an OPEC decision, but of an inability of producers to continue expanding production of what is, ultimately, a finite resource.
The likely timing of this peaking and decline is the subject of this paper.