What is Peak Oil ?

Have you ever heard of Peak Oil?

Peak Oil is a theory (actually a fact) that oil production would peak at some level of production, and then would go into decline. Forever.

In 1956, Peak Oil was a prediction by Marion King Hubbert (commonly known as M. King Hubbert), a geologist and geophysicist for Shell Research Lab in Houston, Texas.

Hubbert predicted oil production, in the United States, would peak in the early 1970s.

Hubbert was proven correct, in about 1971 or 1972, after the United States oil production started to decline, from its peak of about 10 Million barrels of oil per day.

Does this alarm or shock you? Likely, it doesn't, simply because you are unaware of the dire situation we are now in!

But everything seems normal. Financial news channels report that we've got a "glut" of oil supply. Gas is cheap - in some places, currently, gas is under $2 per gallon, and traffic congestion seems to be getting worse in the big cities, such as Chicago, Boston, New York, Seattle, Houston, San Francisco, Washington DC and the nightmarish interstates of Los Angeles. (Wait till you hear about what's going on in other "developing" countries, like India and China)

Before going much deeper, you should understand that oil production can be done in at least three different ways. 1) Conventional Oil Drilling, 2) Fracking and 3) Oil Sands extraction (also known as "Tar Sands").

Without going into the details of each, it may intuitively be understood that "conventional" oil production is the easiest, most cost-effective method. Fracking is more expensive and less productive. And Oil Sands is the costliest worst way to get it! Got it?

For now, just talking about conventional oil drilling and production...

What you need to know about peak oil is that every single oil well has a bell curve. A bell curve is simply a bell-shaped curve that looks like a bell. Or maybe like a roller coaster. It starts off as an increasing line going up, peaks, and then goes down. After that, the ride is over. But please remain buckled and seated until the ride comes to a complete stop.

Once you have a well producing oil, it can be extracted easily and production can increase for years. Perhaps 10 years or longer. After time, the flow begins to slow. At that point, water and pressure may be required to continue to extract oil. At that point, you are burning more energy to extract oil. You are also adding water and other chemicals to keep the pressure and extraction going. At that "mid point" you begin to extract less and less oil, until the point that is no longer economical and the well must be shut down and capped.

The bell curve can be applied to a single well, to a single oil field, to a region of the country, a region of the world, and (here comes the gut punch) to the world!

So - where the hell on the bell curve are we now? Don't look now, but we're on the down side!

The next question could be, "Are we running out of oil?"

The answer is not so simple. But the answer is, we are OUT OF CHEAP OIL!

Just to clarify... THE WORLD IS OUT OF CHEAP OIL.

I know... things seem normal. Gas still seems cheap and abundant. But when you look close at what's happening with the major oil companies - ExxonMobil, Shell, Chevron, you might discover the underlying debt propping things up, for now.

The complex answer would require you to know and understand more about the geopolitical, economic and natural forces that are happening right now. Such as "the petrodollar," the fiat money/currency system we've been forced into, gold, silver, geology and many things I'm sure not even I'm aware of, at this time.

You can do some research yourself, but be warned NOT to believe everything you hear or read. Don't even believe me - find out for yourself. Do some YOUTUBE searches for "peak oil." There are many videos on the subject. Search for official government and corporate reports and documentation on oil production, by country or regions.

Once you understand the growing population (now about 7.5 billion people on this planet) and how exponential growth, forever, in a finite world, is an impossibility, you may start to get concerned about what's ahead in the not-too-distant future, and you might start to think about how you will handle the tsunami of problems coming into view. Not clear to see if you're wearing blinders.

There are many things to consider. How much oil is used in the United States, compared to the rest of the world. The growing demand for oil by other countries, especially in China and India. Will there be oil and gasoline shortages here in the United States? Will the price of gasoline go to $5 or $10 per gallon? Could we see $500 per barrel oil?

You gotta wonder - how will I be affected by all of this? What does this mean for how we live, travel and do business? Are bad things really going to happen? And WHEN?

I don't have the answers, but it seems like the tremors are now happening and an earthquake or tsunami of "trouble" may be imminent - as in months or a few years.

Learn and prepare, at least mentally.

Understanding what may soon be upon your doorstep can help guide you to take proper actions instead of faulty reactions.

I'd like to conclude by recommending two very short videos (only 2 minutes each).

FIRST: M. King Hubbert in a 1976 interview:

SECOND: A little cartoon showing the past, and heading into the future: