An article in today’s issue of the science journal Nature considers not how much oil is in the ground but how much can be extracted cheaply. We’re there.
The notion of peak oil is a fairly simple one: oil is a finite resource and, at some point, we simply won’t be able to extract as much as we had previously.
“We are not running out of oil,” the authors argue, “but we are running out of oil that can be produced easily and cheaply.”
Result: volatile oil prices. And volatile gas prices.
Of the 11 recessions the US has experienced since World War II, 10 have been preceded by a sudden change in oil prices.
the U.S. spent more than $490 billion on gasoline in 2011