No more cheap oil: What now?

 Resource Shortages  Comments Off on No more cheap oil: What now?
May 042011

(March 5, 2011) Investment expert Jim Rogers:

Without oil your life will change dramatically.“…the current situation is certainly causing oil to go higher and oil will go over $150 and it will go over $200 eventually. The problem is the world is running out of known supplies of oil–period. The IEA (International Energy Agency) is going around pleading with people to listen that the world’s known reserves of oil are declining at rates of 4-5% a year. Figure it out–that’s simple arithmetic; we’re running out of known reserves of oil.” See this site and view video interview of Jim Rogers. (4.34 minutes)

The fact is that we have reached peak oil several years ago. Some point to 2006 as the time when the known reserves have peaked and the wells are now pumping less oil every year.

(March 11, 2011) Jim Rogers said, “The price of oil is going to rise for years to come.” But he added, “Crude oil will go higher, though there can be intermittent corrections.”

Rogers also mentioned turmoil in the world: “Of course, it’s supply constraints. Libya has closed down some of its oil production, while Egypt is having problems with its production. There are turmoils in many countries and this is causing supply problems.”

But there isn’t any solution to the turmoil or oil depletion. The problems with dictators, no jobs. and no food won’t be solved. In fact, the situation is becoming more desperate. Those who study scenarios for the world’s future are in agreement that we are heading for a day of reckoning. Now that day has moved up from around 2030 to sometime between now and that date.

The unrest and overthrow of governments will continue and the United States won’t have enough troops to plug all the leaks. Mass migration by the hundreds of millions will lead to wars and more violence.

Rogers: “These may be temporary problems, but the world, in the meantime, is losing some of its inventory. So, if there is calm and peace tomorrow, we may have oil go down for a while, but the basic problem that the world is running out of known reserves continues.”

There are other oil discoveries out there but many are difficult to access or won’t be producing for 15 or more years. And that oil will be expensive, much more than the approaching price of $4 per gallon in the United States. And there have been no large oil fields discovered.

I read of two recent discoveries for oil, one in the arctic and the other in the Gulf of Mexico. If we could recover all of the oil in those two fields, 3 billion barrels in the Gulf and 9 billion barrels in the arctic, the United States alone would use every drop in about 16 months at the rate of 7.6 billion barrels per year.

Fatih Birol, chief economist at the International Energy Agency, says the world’s oil production peaked in 2006 and “oil prices are likely to rise 30 percent over the next three years.” (Most likely much more than that if the expected global demand rises as expected. Over 6000 products are made from petroleum.)

Birol, who monitors the size of global oil supplies states, “The existing fields are declining so sharply that in order to stay where we are in terms of production levels in the next 25 years, we have to find and develop four new Saudi Arabias.” (We won’t.)

The bottom line on our resource shortage is that there are too many people in our world and we are in the process of adding 2.2 billion more to our planet by 2050. This will be the end of life as we know it.

This is a sample of the future before it all breaks down:

Over-population and the fallacy of an eternally-growing economy will destroy us.(August 24, 2010) Beijing–“A 60-mile traffic jam near the capital could last until mid-September, officials say.

‘Traffic has been snarled along the outskirts of Beijing and is stretching toward the border with Mongolia ever since roadwork on the Beijing-Tibet Highway started Aug. 13.”  The average speed in Beijing is less than 9 miles per hour. Read more.

Developing countries, led by China, India and Brazil, are building a huge upwardly mobile economic class that is demanding the same things that we westerners once had in our now declining middle class. The big item currently is personal transportation, an automobile. Estimates are that this demographic will purchase one billion vehicles over the next 15 to 20 years. That would be added to the already one billion vehicles in service globally. China has more than 400 Buick dealerships and customers buy the top of the line models.

Our known oil  reserves are are declining 4-6% a year and there is no help on the way for the next two to three decades. Currently we barely have enough to meet our needs. When the global economy takes off what do you think will happen?

Some forecasts predict a significant shortage of oil by 2015. At some point rationing will occur with long lines. The pipeline of poorly made, sometimes contaminated goods from China will be stuck in port and we Americans don’t have the factories to manufacture much of anything. Wal-Mart’s port in Mexico will be slowed down or shut down. Globalization is dependent on cheap oil to exist.

Meanwhile President Obama has declared that a North American perimeter will be constructed around our continent (Feb. 4). The goal is free labor mobility within the continent, meaning Mexicans can “live and work” anywhere in North America. This will be our new workforce, here to lower wages for North America and make us competitive.

Obama has shown that he has utilized the CFR plan for Building a North American Community with his North American perimeter announcement and a North American Border Pass for Canada and Mexico (see p.8). This full labor mobility between the U.S., Canada and eventually Mexico will be accomplished when “the wage differentials between Mexico and its two northern neighbors have diminished considerably.” (pp. 27, 28). That means when American wages diminish considerably. The Americans’ unemployment rate will jump as Mexicans take our place in all job categories (p.26).

Given that shortages of oil, food and water will be a global problem over the next 4 decades, the United States will still increase its population  from 304 million to 439 million people by 2050, both legal and illegal. With that growth we would need 36,000 more schools, 52 million new housing units and roads to handle 106 million more vehicles.

Remember, we could have serious shortages of oil starting in the next 5 years and yet our leaders will be adding 106 million more vehicles to our roads. This is not the time to be adding any more people to our nation but our leaders have that agreement with our corporations to complete a North American Community that will make us competitive with China and the rest of the world. More profits for corporations.

Mexicans truly do not like white Americans.Obama recently said that he will also fight for a “comprehensive immigration bill” that would  legalize the illegals here and certainly those millions who will cross the border once they hear about amnesty.

We know that resource shortages are already a problem for the world and the U.S. So how is adding 150-200 million people, most not speaking English and with a clearly-stated hatred of white Americans, going to make our resource shortage situation better? Not only will prices keep setting new records for food and energy, this overcrowded nation will have a large number of people without food and jobs. And the rest of the destitute masses in the Caribbean and South America will also make the trek north to America.

I would think that a vigorous civil “unrest” would break out somewhere in this time period and the president would need to dispatch USNORTHCOM, his trilateral North American response force. Not only is this a possibility, it’s a given. That’s why George Bush set up this continental army before turning it over to Obama. The U.S. Fifth Army (US Northern Command) is not here to mix it up with a few Islamic terrorists. These troops, integrated with other units from the U.S., Canada and Mexico (CFR pp. 10-12), will be used to maintain order in North America and control U.S. citizens and others who no longer have a government they can trust and an America that no longer exists.

American leaders turning on their citizens. Kind of reminds me of some recent events far away. Until now, I never thought it would happen here. But times change.

 Posted by at 10:35 am