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Oil Check

03/21/2011
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The price of oil has risen above $100 a barrel for the first time in over two years, and several countries have agreed to use military force in order to quell the unrest in Libya, a country that produces 2% of the world’s oil.

It seems very likely that this is only the beginning.

In 2009 a whistleblower within the International Energy Agency attested that under U.S. pressure the organization exaggerated the amount of oil left in the world. Wikileaks recently revealed that Saudi Arabia, one of the world’s largest oil producers, has overstated its reserves by almost 40%. Meanwhile, global demand rose last year by 2.7 million barrels a day, with Asia’s consumption–chiefly that of China and India–skyrocketing.

Peak oil is the point in time when the maximum rate of global oil production is reached, after which it will decline. Unfortunately, demand is showing no signs of slowing its growth, let alone declining. Some think peak oil has already happened. The most oil ever produced in one year is 73,720,000 barrels a day, in 2005. In 2009, that number dropped by more than a million.

Oil is used in either the production or transporation of virtually everything. Consequently, as it becomes scarcer the price of everything will rise. Including food. The principles behind farmers markets like the one I visited last week must be widely embraced. If we don’t begin producing the necessities of life locally while we still have the means, the ability to transport goods across oceans and continents will be stripped from us faster than we can react.

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