Background: Oil to hit $300-a-barrel

A really interesting interview with Charles Maxwell has just been published by Barrons, in which he explains why he thinks we’re heading for $300-a-barrel oil. He is predicting peak oil arriving in 2015:

At some point, doesn’t it come down to lowering consumption or tapping alternative sources of energy?

Right, and we will probably do both. Ten years ago, 40% of the world’s energy was in oil, versus 39% in 2006. It should reach 38% in the next five years — and 37% three years after that. So oil is slowing, and I expect it will stop its growth around 2015, at which point the supply begins a slow retreat.

He is forecasting $300-a-barrel oil following that peak in 2015, and is clear that we will all be highly dependant on OPEC oil from 2010 onwards. I am always interested in what people think this mean for society, and here is his take on the future:

It will be a little simpler. Your friends are going to be a little closer to you than they were before. Your vacations are going to be a little closer to home. You are going to have lower temperatures in the house. We will drive smaller cars with less horsepower, but they will get 60 to 80 miles to the gallon, enabling us to stretch gasoline supplies a lot further. There are going to be thousands of new adjustments leading to new investment opportunities. But the adjustment to that rising oil price, which could take as long as 20 years, will be a very harsh social experience — not only for our society, but for every society.


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