Are We Entering the 'Twilight Era' of Petroleum?

The prospect of dwindling oil supplies and the likelihood of conflict with China over what remains, are increasingly being considered matters of national security.
August 9, 2005, 11am PDT | Michael Dudley
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"we are just about to enter the Twilight Era of Petroleum, a time of chronic energy shortages and economic stagnation as well as recurring crisis and conflict....The culture and lifestyles we associate with the heyday of the Petroleum Age—large, gas-guzzling cars and SUVs, low-density suburban sprawl, strip malls and mega-malls, cross-country driving vacations, and so on—will give way to more constrained patterns of living based on a tight gasoline diet. While Americans will still consume the lion's share of global petroleum stocks on a daily basis, we will have to compete far more vigorously with consumers from other countries, including China and India, for access to an ever-diminishing pool of supply.

"[...]Just how seriously American policymakers view these various energy-related developments is further revealed in another recent event: the first high-profile "war game" featuring an overseas oil crisis. Known as "Oil Shockwave...[the simulation] identified a set of conditions that provide a vivid preview of what we can expect during the Twilight Era of Petroleum:

- Global oil prices exceeding $150 per barrel
- Gasoline prices of $5.00 or more per gallon
- A spike in the consumer price index of more than 12 percent
- A protracted recession
- A decline of over 25 percent in the Standard & Poor's 500 stock index
- A crisis with China over Taiwan
- Increased friction with Saudi Arabia over U.S. policy toward Israel

"Whether we experience these precise conditions cannot be foreseen at this time, but it is incontestable that a slowdown in the global production of petroleum will produce increasingly severe developments of this sort and, in a far tenser, more desperate world, almost certainly threaten resource wars of all sorts; nor will this be a temporary situation from which we can hope to recover quickly. It will be a semi-permanent state of affairs."

Thanks to Michael Dudley

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Published on Monday, August 8, 2005 in Tom Paine - Common Sense
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