Peak oil pushing crude oil prices to record highs

Thursday, January 03, 2008

Immediate release
January 3, 2008

More information
Madison Peak Oil Group
Elizabeth Campbell
608.824.0646

RENEW Wisconsin
Michael Vickerman
608.255.4044

Oil price rise underscores declining resources
This week’s record high price for oil – over $100 per barrel -- continues to signal the worldwide declining supply of crude oil, according to two Wisconsin energy groups.

“The petroleum age will come to a close this century. With prices at this level and two-thirds of our oil now being imported, we’re reaching the point where large numbers of us cannot afford it,” according to Elizabeth Campbell, a spokesperson for the Madison Peak Oil Group, a group trying to raise awareness among citizens and policymakers on the “inevitable” decline in oil supplies.

According to Wikipedia.org, “peak oil” is the point in time at which the maximum global petroleum production rate is reached, after which the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, the availability of conventional oil will drop and prices will rise, perhaps dramatically.

In a typical commodity shortage, higher prices entice suppliers and producers to boost output. In the case of peak oil, “The amount of oil remaining in the ground cannot fulfill our increasing demand in the U.S. and throughout the rest of the world,” said Michael Vickerman, executive director of RENEW Wisconsin, a statewide nonprofit organization that advocates for public policies and private initiatives to support renewable energy.

Commonly, oil price analysts blame higher prices on political or social turmoil in oil producing countries, investors’ market strategies, refinery shutdowns, or other “above ground” factors.

All of those causes are short-term influences, said Campbell, and prices will fluctuate up and down. However, oil is a finite resource and world supplies available for U. S. imports are headed downward. The long-term price trend will be “inexorably upward.”

“We have to face reality. Until demand for petroleum goes down, prices will continue to climb,” Vickerman stated.

“We must prepare for a future of declining petroleum supplies and higher costs for anything and everything that depends on oil – food, clothing, asphalt, transportation, plastics, and nearly everything else in our lives,” Campbell added.

The Madison Peak Oil Group supports a Dane County regional transportation authority, for example, “to reduce our excessive and ruinous dependence on petroleum.” The group also advocates stronger action from the federal government to reduce the U.S. dependence on petroleum.

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