This past few months oil prices have continued to increase to the point of regularly closing above 100 US dollars per barrel. The United States is entering a recession, which will likely affect the whole world. And earlier this week OPEC has once again refused to increase their production of oil.
Most legal analysts are decrying this as a bad choice on OPEC’s part that will likely cause an economic backlash. After all, OPEC nations are a part of the world and a global economic recession would necessarily effect them. Especially when you consider the reduced oil sales caused by just such a recession.
Historically, OPEC has agreed with these analysts. Whenever the world economy has seemed to be flagging, OPEC has increased production, thereby reducing oil prices, allowing cheaper energy to reinvigorate the global economy. But not this time, which has caused surprise and condemnation.
What is missing from this discourse is a basic understanding of geology. OPEC nations have peaked. They can’t increase their production. By refusing to try, rather than trying and failing, they are successfully obfuscating the issue. And as long as there is any doubt about the future of oil we will continue to rely on it, base our economy on it, and most fundamentally, we will continue to eat it.
Once the oil geologists have proof clenching enough that the economists and politicians can no longer invent reasons to continue in the oil economy, it will be time to make some tough choices. We will be called upon as a global society to examine ourselves and discover who and what we really are. Tough questions and difficult choices, and no political or economic leader has any interest in presiding over such an intensive change as would be required. After all, change will upset the current balance of power, and unless we are already in a crisis “rocking the boat” is frowned upon.
Ultimately, by not attempting to increase oil production, OPEC might be improving our economic condition by allowing us to remain blissfully ignorant of the extent of our problem, at least for now. Once the problem is fully realized, we will have no choice but to make tough decisions, unpopular choices, and ultimately change the foundation of our society. History will judge, but for now we wait.
– Benjamin Shender