Will Oil Cost $500 a Barrel When the Climate Resets?

Climate Reset via WUWT
The graph above illustrates a "climate reset" occurring due to the solar cycle effect. The next abrupt climate reset is due to occur any moment now -- within the next several years. As depicted above, the "global temperature" is due to abruptly drop to average levels not seen in over 100 years, then to slowly return to near current levels near the middle of the current century.

With all the talk of "peak oil" and oil prices shooting up to $500 a barrel or above very soon, it is worth considering how modern societies will face decades of cooling weather when fuel prices are very high.

First of all, what are the valid points of the "peak oil argument?" Christophe de Margerie, the CEO of France's Total oil company, presents one of the most rational definitions of peak oil:

... he was saying that the world is fast approaching the maximum volume of oil it can possibly produce, which he reckons is about 95 million barrels a day; that's just 8 percentage points higher than the 88 million barrels a day the world consumes at the moment. _FP

A very valid point. The planet has only so many oil rigs, so many trained oil workers and engineers, so many points of production that can be brought into play -- at least until the dawn of artificially intelligent robotic oil exploration, discovery, and production.

Another valid point from the peak oil argument comes from Doug Casey, investor and man of the world:

Peak oil is a geological concept. It basically holds that all the low-hanging fruit has been picked. Now, philosophically, it rubs me the wrong way, in that I have total confidence that human ingenuity will find scores of ways to produce new hydrocarbon fuels – and lots of totally new energy sources in addition. Furthermore, the higher oil prices go, the more will be found – and the more it will be economized. So, in a free-market world, oil is a non-problem.

But we don’t currently live in that kind of world. In the meantime – let’s say the next 10-20 years – oil is an issue, for simple geological reasons. And also because, even though consumption has been basically flat in the advanced world for decades, consumption is going to grow radically in “Chindia” and the rest of the developing world. The biggest problem though is likely political, especially because of the increased political risk in the Middle East, where most of the world’s oil reserves are. You’ve got to be bullish on oil. _HoweStreet

Casey is saying two things about peak oil: 1. The sweet, light crude is becoming more rare and more dear. 2. Free market responses which would make it easy to substitute and adjust to changing supplies, are being hampered by political forces. In other words, Political Peak Oil is in play. One other point Casey is making to support his belief that oil prices are likely to shoot up: He believes that China and India will increasingly drive world oil demand for the foreseeable future.

For those reasons, Casey believes that oil could soon shoot up to $200 or $250 a barrel. If Casey's assumption about Chindia demand are correct, his conclusion on oil price could also be correct. But....

Al Fin energy futurologists and economic forecasters do not believe that India and China are ready to drive the global economic steamroller due to the many serious internal and regional problems each nation faces. And given the serious combined problems of debt and demographic decline which the current drivers of the world economy -- The Anglosphere, Japan, and Europe -- are suffering, we are more likely to see another global economic downturn before too long. This is likely to occur well before China and India are ready to steer the machine.

What does all that mean in terms of the cost of staying warm throughout the 2010s and 2020s? It means that unless the advanced nations of the world can dump their "energy starvationist" governments and learn to use the resources which are available, some societies accustomed to reliable power and heat will find it difficult to keep the lights on.