Tipping point? This term has been up for debate for a couple decades now, though most people don't even know it exists. It is all based on the Hubbert peak theory that American geophysicist M. King Hubbert developed. The idea is that for any area, from an individual oil-producing region to the whole planet, the rate of petroleum production tends to follow a bell-shaped curve. It is one of the primary theories on peak oil. Hubbert predicted peak oil in the U.S. and he was right on the nose. The Hubbert's Peak was achieved in the continental US in the early 1970s. The production oil peaked at 10.2 million barrels a day. Since then, it has been in a gradual decline.
So why would this make a difference? There are a number of issues that people should be aware of, population demand, population increase and the ability to extract the remaining oil. In 2007, Saudi Arabia quietly announced that it would not increase production and more quietly related it to the ability not to pump more. The Saudis reached peak oil, the largest oil producer in the world. Over the last year the demand has increased almost 2%, during an economic downturn. And then there is the population which has grown at the rate of 1.1% a year. So as the population increases the demand for oil increases.
Then, what is the point? Over the last decade there has been speculation that peak oil was near at hand. But now a new report adds to the growing evidence. Research by the Smith School of Enterprise and the Environment at Oxford University concluded in a report this last week that we have passed peak oil. That adds to the fact that 10 of the 11 U.S. recessions since World War II have been preceded by sharply rising oil prices. Since we live in a supply/demand economy where a declining supply always leads to a higher price, the results are that we will have to pay more for all petroleum-based products and there are thousands of petroleum-based products.
We all know what impact a recession has on the value of our homes, our salaries and jobs as well as our retirement funds. But what will the affects be with a continual rise in oil prices, especially when incomes have been stagnate for the last 15 years. Of course gasoline prices will increase, as well as heating oil, but consider auto tires, detergents, fertilizers, insecticides, to simple things as soap and shoes will also increase.
$350 billion of our deficit is related to oil imports, so you would have to wonder why there is such a fight to stop alternative energy production, fuel efficient cars, appliances, and homes. It is not likely that personal income is going to rise anytime soon while petroleum related products will continue to rise. This is one of the reasons for the push for energy efficiency over the last couple of years. This is why it is important to you.
http://www.hubbertpeak.com/
http://www.saveandconserve.com/2007/05/petroleum_based_products_a_long_list.html
http://www.foodandfuelamerica.com/2008/02/oil-imports-fuel-trade-deficit.html
http://www.sciencedaily.com/releases/2010/03/100324225511.htm