The Frightening Reality About Oil explained by professional Forex trading experts the “ForexSQ” FX trading team.
The Frightening Reality About Oil
Worldwide, we use up 983 barrels of oil every second. Let that sink in for a moment.
In fact, in the time you take to read this article, we will have already gone through another 200,000 barrels. Of course, none of this is a problem, right? I mean, there is plenty of the stuff after all.
Well, yes, oil is the second-most common liquid after water. Also, right now there is an oil glut, which is partially why prices have been historically low.
There are literally tanker ships holding the equivalent of one million barrels of oil each, just sitting off the coasts of China and in the Middle East. Most of the sea-borne traffic jam is due to the current oil glut, and if lined up end to end, these vessels would stretch for about 25 miles.
So, why worry? Well, you probably should.
Why Do We Need Oil at All?
Oil is used for everything, and I mean everything. It is like the blood of a human, which is needed in every single part of the body. Besides gasoline for our cars, there are hundreds of other uses; hand lotion; yarn; ink; fishing lures; fertilizers; paint; clothes; antifreeze; toothpaste; golf balls…
You get the point. There is an almost endless list of needs which require oil, the majority of which you almost certainly didn’t realize.
Plastic is made from oil. Therefore the parts of your computer, plus the machines which assemble the device, and the employees who drive to work to design them, and the buildings (factory, head office, and development center) all need crude oil.
As do the promotional pamphlets and the trucks which deliver the devices, and…
Of course, some of these applications are able to exist without oil. For example, you can still make clothes without petrochemicals, as long as you don’t use yarn or sewing machines, and ship the finished product by horse.
In other words, we don’t absolutely NEED oil for everything. However, without it, the item becomes slower to make, or more difficult to build and, at the end of the day, will be significantly much more expensive. Given the choice, people will bypass the $90 shirt in favor of the $30 shirt, even though the less-expensive choice sold their soul to oil.
How Much Oil Is There in the World?
According to this statistical review (page 6) by British Petroleum, there are approximately 1.8 trillion barrels of located reserves, which are realistically recoverable. Other leading petroleum organizations also closely concur with this assessment.
1.8 trillion sounds like a lot, and certainly, that will be more than enough to last us well beyond our final days… but then there is the math:
The International Energy Agency (IAE) explains in this Oil Market Report that, planet-wide, we use up about 85 million barrels of oil each and every day. Considering that figure, we’ll “burn” through 1.8 trillion barrels by the year 2068 (or just over 50 years from now).
Oil is not like a hammer or rake, where you put it away when you are done with it until you need it again. Oil is a nonrenewable resource, which gets consumed, leaving only a black cloud of smoke in its wake.
So by looking at total global supplies of 1.8 trillion barrels, then dividing that by 85 million barrels per day, that only leaves us with about 21,176 days until all supplies are exhausted, or as mentioned above, we have somewhere between 50 and 60 years of oil left.
But What About…?
Some will scoff, suggesting they will be long gone by the time this becomes any sort of problem. Well perhaps that is true – they will be fine, as long as:
- they don’t have any children
- they don’t leave anyone behind that they care about
- they are not concerned for society in general after they are gone
- daily consumption does not accelerate
- countries don’t go to war over oil until the very last moment
Regarding the last two points, the smart Alec should consider a few things.
First of all, much of the demands on oil right now are coming from developing nations.
The consumption coming from China and America is already well known, but countries like Malaysia, India, Brazil, South Korea, and Mexico (just to mention a few from among several dozen) are rapidly ramping up their demand for oil, and by extension, their reliance.
Second of all, as resources diminish, nations have proven time and again that they will be more than willing to go to war. In fact, there are only four things which cause military conflicts between countries – religion, ideology, territory, and resources. The Pearl Harbor attack was actually a relatively recent example of how a nation might respond when their supplies are cut off, but throughout all of history, there are plenty more examples.
The point is that significant wars will almost certainly break out, but the flashpoints may arrive much sooner than you would expect. Nations do not wait until there are only 3 or 4 years of oil left before they start positioning to protect or capture more supplies. If we have 50 years of oil remaining, military conflicts may occur within a couple decades… maybe less.
This probably sounds alarmist. Yet, many leading nations such as China and America and Russia and even the European Union are already positioning and building alliances and infrastructure in oil-rich regions of Arica.
This is the main driver which has given rise to Africa Command, the American military arm which was established to, “advance U.S. national interests and promote regional security, stability, and prosperity.” Sounds good, but it is properly pronounced as, “oil.”
At the same time, many countries have either topped up their strategic petroleum reserves (SPR) or are filling them just as fast as they can put new massive storage tanks together. Countries like China, Pakistan, and Malaysia (just to mention a couple) have publicly committed to increasing their SPR capacity by several times larger than they currently have, and even after building several gigantic storage facilities, China has only recently filled them all to the top.
Won’t Usage Slow Down?
We are currently on the trajectory to soon be using up over 100 million barrels of oil per day. Developing nations are taking a page out of our book, and becoming unbelievably reliant on oil, for everything.
You may ask, “what about solar power?” “What about coal… electricity… green-energy vehicles…?”
Well, hopefully, all these concepts will help. Unfortunately, since most of the new demand is coming from “younger” nations, which are growing rapidly in both population and development, the changes we make here at home will do a little to reduce our own personal consumption rates, but very little to dampen the worldwide thirst for petroleum.
Besides, you aren’t going to find an airplane which runs on coal.
As well, remember that electricity is not an energy source, it is a manner of transporting energy between locations. Electricity can only exist by first generating the energy, whether by utilizing coal or gravity (waterfalls) or burning oil.
Even if every American citizen started driving an electric car, we would still need tires and wiper blades and machines at assembly plants to build them. We would still use plastics. We would still fly on airplanes, which require jet fuel. By the way, guess what jet fuel is made out of…
What Can We Do?
Help raise awareness. The more attention shed on this issue, and the sooner, the easier it will be to adapt and adjust.
The live countdown at OilClock.com is one way people are spreading the dire warning. Websites and bloggers are adding the live countdown clock to their sites, so people can see what the reality is, and find out more.
The politicians, and even the generations before ours, have ignored this issue since it was not as pressing a few decades ago. It is on us now, in this moment and at this time, to force change through awareness.
The Frightening Reality About Oil Conclusion
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