Now this is … strange ? odd ? bizarre ? weird ? I was reporting in October that oil prices had dropped below $90, but last week they went even lower with as little as $50 a barrel. This is a 55% drop compared to last June.
Extreme oil
Oil prices are going down. Wait, what ?
This was my reaction when I saw oil prices drop recently to levels below $90. Not long ago they were indeed more around $110 than anything else. Lucky for us Thomas L Friedman from the New York Times brings some answers…
Is Peak Oil real ? Yes, and it is here
With shale oil and other extreme oil sources, many think peak oil is dead, or at least is not threatening our economies. But this couldn’t be more wrong. The historic average oil prices are of $25. Current prices are above $110 a barrel.
Five years ago, they were less than half of that. As the Conversation notes, current high prices have a huge toll on our economies as we spend $9.5 billion globally on oil every single day, amounting to a staggering $3.5 TRILLION each year.
This addiction is hurting our economies each day more are the global demand keeps on increasing, fueled by developing and emerging nations.
Oil prices will just keep on increasing
It had been a long while I hadn’t blogged on oil prices. This came to me as last week I found two pieces of news showing how oil prices are just going up and up and how they will just keep on increasing in the next months and years.
First and foremost, according to PeakOil.com, US drivers are paying in 2013 higher gas prices than in 2012, which were higher than 2011, which themselves were also higher than in 2008, when oil prices reached their all time high of $147 a barrel.
Still to this website, the annual average for 2012 for Brent crude – one of the benchmarks for oil prices – was higher than in that fateful year of 2008.
Oil : the headlong rush
In French, we have an expression, ” la fuite en avant “ which can be explained this way : “A fuite en avant is something one does when one is in a losing situation, and one hopes to salvage it by doing more of the same or worse.”
Not that I want to delve into linguistics… I am writing about this as the answer to our oil woes is not “more” but “less”. We are beyond the end of conventional oil. The International Energy Agency stated so.
What we are heading towards is unconventional and dirtier, even extreme oil. Think about the mess caused by oil shales…
Extreme oil anyone ?
While some magazines print sensationalist articles, some other prefer to carry out real research with real facts and figures. New Scientist indeed published an interesting article on what they call extreme – or unconventional – oil.
Understanding that peak oil is either near or already arrived we can either burn as much unconventional oil as we need or use it wisely to smooth the transition to the post-oil society.
The editorial is a little gem that will allow you to better understand the full article written by David Strahan, the author of The Last Oil Shock.