Rising Oil and Gas Prices Will Continue As We Reach Peak Oil

rising gas and oil prices as a result from peak oil may be devastating to economy.

Rising Oil and Gas Prices Will Continue As We Reach Peak Oil Production

While oil and gas prices keep rising, and us nearing peak oil, many are concerned with where and when it will stop. Price spikes have occurred in 1973, 1979, 1991 and most recently 2011. These price jumps in oil and gasoline have done little to sway US Energy policies in the past, and with the current economic and political climate in Washington D.C., more than likely won’t do much to motivate politicians to create a sustainable long-term energy policy that will ensure the stability and security of our energy supplies for years to come.

Oil and gas prices are vital to the economy, because when they rise, so do the prices of everything else. Oil plays such a major part of our current economy, and is why it is referred to as a oil economy at times. This black gold is used in the production of, harvesting of, manufacturing of, and transportation of nearly everything that we touch each and every day. We had the first glimpse of an oil crisis in 1973 with the oil embargo, and developed a short term energy policy which disappeared just as fast as the oil embargo. Then again,in 1979, we had another oil shortage due to the Iranian incident during the Jimmy Carter Administration, and developed another short term inept energy policy. In 1991, with the Gulf War ongoing as Saddam Hussein invaded Kuwait we experienced another oil crisis and price spike, and subsequently another short lived feel good energy policy. Then again, in late 2004 oil prices again surged, and again, we put the energy policy on auto pilot and ignored the potential threats to the well-being of every American.

Big Oil

Big Oil

Our relationship as a nation with big oil may have something to do with our reluctance to adopt a sustainable energy policy. It also creates a fine line in our diplomatic relations with oil producing nations, as seen with the recent rash of political unrest in the Middle East. Saudi Arabia has now sent a vote of disapproval of our foreign diplomatic relations by sending emissaries to China and Russia with the message that they are now willing to do more business with them, over our handling of the ousting of then President Mubarak’s removal in Egypt. This may lead to further gas and oil price instability in a still weak economy which could reduce or totally wipe out nay hopes of a sustained economic recovery.

Oil and Gas Prices

Planet Earth submerged in oil

big oil world

While we diplomatically walk a fine line across the world due to our dependence and need for oil, we also create more serious of a problem for ourselves and our future by not initiating a long-term sustainable energy policy. Our lack of foresight on this matter may prove to be fatal to our national security and economy, as the demand for oil increases, and supplies continue to dwindle as we reach peak oil. Oil is not a finite resource, and as supplies dwindle, the cost to explore, extract, and deliver new sources of this commodity will rise. We are currently nearing a point in our oil economy which is referred to as peak oil, which is reached when the maximum rate of global petroleum extraction is reached and afterward, production rates will enter terminal decline, in which production rates will forever decline, and oil and gas prices will become more volatile. As it stands now, our insatiable appetite for oil continues to grow unstoppably, and we are faced with this imminent danger of reaching peak oil. While we are nearing reaching global peak oil, if not already there, it does not necessarily mean that we are running out of oil, but we are faced with the inability to continue to produce high quality, cheap, and extractable oil on demand as we currently do. This topic has been researched and analyzed for over fifty years by widely respected scientists, they are now in agreement that we are rapidly approaching the maximum rate for which oil can be extracted if not already there. This is peak oil my friends, and to maintain our current levels of production, we must utilize much more effort and money to keep up for several more years, after which we will enter into a permanent, irreversible decline in our global oil production.

Currently we have no suitable replacements or alternatives for oil, and that will pose a huge problem as peak oil nears. A 2005 report by the United States Department of Energy commonly known as the Hirsch report stated that “The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.” If we do not come up with viable alternative solutions quickly, we will be faced with scarcities and large cost increases in all products produced with oil, not to mention those that require if for production or transportation. These include the food we grow and harvest, fertilizers, medications, adhesives, solvents, detergents,and nearly everything we find on the shelves at the Super-center, as all products currently require some sort of transportation to it’s final destination. As a result of rising gas and oil prices, it will also have a big impact on all of these and raise the prices for nearly everything.

Peak Oil

The model for the US does not bode well for Americans, as a majority of people live in suburban or rural areas.The suburbs, or ‘burbs were designed in the 1940’s and 1950’s with little to no foresight and were based on cheap oil and gas prices, and consist of low density settlements designed specifically around the automobile and low gas and oil prices. Such living arrangements have been deemed as unsustainable by some experts, and is basic common sense if you look hard enough at it. Another troubling aspect is that over 90% of the transportation in the nation relies on oil and public transportation is lacking reasonable access, if any at all. Peak oil, if not addressed promptly, will leave many Americans unable to afford petroleum based fuels for their cars and many petroleum based products.


US Oil Consumption Sector

These are also some of the issues at hand when it comes to other growing cities in developing nations where most of the expected 2.3 billion population growth by 2050 is expected to occur. These areas have an important goal when planning for future development and the energy factor must be implicated in any future developments. Several suggestions have been made for mitigating suburban and urban issues regarding future development and rising gas and oil prices. Some of these suggestions include the use of non-petroleum vehicles like electric cars, battery electric cars, bicycles, trains, public transit oriented development, car-free cities, pedestrian-ism, smart growth, shared space, urban consolidation and New Urban-ism. These are certainly positive strides towards achieving sustainable growth and development, whereas in the past, we have ignored such concepts. These concepts can also address the issues of rising oil and gas prices and peak oil by helping to reduce demand.

In 2009, the United States National Research Council of the Academy of Sciences, commissioned by the United States Congress, made an extensive report on the matter of peak oil and rising oil and gas prices. The report concluded with 6 main findings regarding future development. Here is a list of those findings:

1. Compact development is likely to reduce vehicle miles traveled (VMT) throughout the country.
2. Doubling residential density in a given area could reduce VMT by as much as 25% if coupled with measures such as increased employment density and improved public transportation.
3. Higher density, mixed use developments would produce both direct reductions in CO2 emissions from less driving and indirect reductions such as higher climate control efficiency, lower materials needed for each housing unit, longer vehicle lifespans, and a higher efficiency rate for the transportation of goods and services.
4. Most energy use and CO2 emissions in the short term would be modest, but these reductions will grow as more time passes.
5. A major obstacle for more compact development in the United States is the political resistance from the local area zoning regulators, which may diminish efforts by the state and regional governments to be active in land-use planning.
6. The committee agreed upon the fact that changes in development patterns that would alter driving patterns and building efficiency would have various secondary costs and benefits that are hard to quantify and evaluate.

In conclusions, the report gave two major recommendations, the first of which is that future policies should be encouraged which support future compact development along with it’s ability to reduce driving and CO2 emissions as well as energy use. Secondly, it recommended that further studies should be conducted to ensure that future compact development becomes more efficient and effective to combat rising oil and gas prices as we reach peak oil.


That being said, at the end of the day, we have a lot of talk, and little to no action regarding this very big problem. Gas and oil prices will continue to become more volatile and continue to rise as peak oil nears and demand grows. We need to make the move now towards reducing our dependence on oil and secure our future both economically and energy wise. If we wait to long, we will be in a crisis beyond what we deem critical now. With our current debt taking priority over everything else, and political bickering, we are ignoring the most important issues which we are facing, climate change and rising gas and oil prices. We will see our economy go into much worse shape if we do not take these issues at hand seriously. This is not the time to strip away all clean air rules, gas mileage rules, and other green solutions we have developed over the past 40 years. We must address these issues of rising oil and gas prices more than ever now, as our changing weather implicates we are in for worse times. So we have some hard decisions to make, let’s just hope we make the right ones before it may be too late. Peace my friends!

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