End of Easy Energy

The 'End of Easy Energy' has been much talked about in the past few years. Geologists call it the 'peak oil', economists measure it with 'rising oil prices', academia finds it in textbooks and news columns, but is each one of us aware of one of the most important events in the history of mankind and the impact its going to have on our lives?

Lets make it very simple. Three steps and you will know what the talk is all about.

One, we do know that all growth is dependent on use of energy be it taking a ride down the road or building the whole civilization. 40% of that energy comes from oil. (relatively cheap at the moment). More than 90% of that oil goes into fueling the transportation sector. Another industry that oil affects considerably, is the agricultural sector. The food products that we use would downsize by a third if the oil was not used to run the heavy agricultural machinery for production. (more on the impact of oil on agriculture later).

Two, is the economics of oil pricing, that people tend to follow to measure peak oil. So, what keeps the prices of oil still low? Lets get rid of this deception which has been confusing all.
The current price of oil, which is determined by simple economics of demand (consumer controlled) and supply (supplier controlled), can be explained by the declining economies of the world - less consumption (and thus less demand) - less depletion of oil resources. Thus, today the only oil in competition to determine oil price is the cheap oil. The problem lies ahead with reviving economies and growing demand, with rising marginal prices when the relatively expensive (hard to extract) oil comes into the picture.

Three, is the over dependence on oil that explains all our growth that we have had in the past century. Agriculture, transportation, buildings - every other form of human defined growth that we can think of is some way or the other driven by cheap oil. This prosperity will decline with the decline of oil.

Our cheap and luxurious lifestyle is on the verge of collapse. The more we ignore it, the more difficult the survival is going to be.
I invite my readers to please comment.