The Energy Trifecta: Rising Demand/Declining Supply and Fundamental Shifts in the Energy patterns of our Atmosphere

By allowing the pricing mechanism to fluctuate as wildly as it does, oil is treated as an ordinary commodity rather than as a depleting resource. Therein lies the tragedy, since it distorts geological realities.

Oil is embedded in our daily lives in so many ways. It is the lifeblood of suburban communities. It allows us to determine where we live, how we live, and how we travel. Oil is an essential component in fertilizer, which supports agriculture. It is used in manufacturing from chemicals to plastics, and it is an essential fuel in our transportation system. It has become essential in creating the modern conveniences of 21st-century living. The tragedy is that it is given very little thought.

What is shaping up is the perfect energy trifecta: rising demand, declining supply, and cooling global temperatures.

clipped from www.financialsense.com Has demand fallen to such an extent as to justify a 74% decline in price? If it is widely believed that speculators were behind oil's spectacular rise then are they behind oil's precipitous decline? If the decline in consumption is estimated to be 2–2.5 mbd then oil depletion rates alone would bring demand and supply into balance. If global observed depletion rates are running 6.7% with natural depletion rates as high as 9%, has demand fallen by a similar percentage globally? If demand has fallen faster than worldwide depletion rates what about supply destruction? According to Easterbrook there have been 23 periods of climatic warming and cooling over the last 500 years. Each warming and cooling cycle lasted 25–30 years (average 27 years). Recent measurements of global temperatures suggest a gradual cooling trend since 1998. The industry, despite the creation of OPEC, remains a price taker rather than a price maker.