Peak Oil Problem
The world’s economy directly depends on cheap oil the production of which, however, seems to be failing to meet the demand. Whether the world is faced with a peak oil problem or not is a matter of debate. According to some geologists, there is no reason to be concerned about the availability of oil for now but the others warn that we are dangerously approaching the peak oil production or perhaps already reached it. And if this is the case, the period of cheap oil is indefinitely over. But even if there is enough oil reserve, unstable oil prices are seriously hindering the recovery from the economic recession.
According to the most optimistic estimations, we will reach peak oil around year 2020 which theoretically gives us enough time to find alternative sources of energy as well as to avoid a potential oil crisis. Unfortunately, it seems that we are not getting any nearer to an inexpensive and environmentally friendly alternative to petroleum. Nuclear energy has been shown to bring too many risks, while the development of efficient technology for the use of renewable sources of energy such as solar and wind power progresses extremely slowly. In addition, the available green technologies are not financially accessible for most business owners. The investment pays off in the long term but many firms cannot afford to make investments which become economically feasible only after a decade or two while struggling to stay in business. But doing nothing about the problem puts many businesses at risk of closing due to too high expenses for energy.
If the pessimistic peak oil predictions are true, we are completely unprepared for the crisis that awaits us. Unfortunately, there is little an individual business can do other than exploring the alternative sources of energy and putting an increased pressure on the authorities to support the efforts to develop a renewable, environmentally friendly and cheap sources of energy by providing more subsidiaries and tax incentives to the companies that develop alternative energy solutions as well as by encouraging research, innovation and educational programmes that deal with the issue. The problem with peak oil should also be given more attention by economic forums and business associations in order to make business owners aware of the problem as well as help them take measures in order to minimize the effect of an eventual oil crisis.
It is impossible to predict how long the oil production will be able to keep up with the demand but there is a great chance that we will reach peak oil (if we have not already) within a decade. Furthermore, the oil price is highly unlikely to drop back to $30 per barrel considering the rising demand for oil due to population growth. In order to get out of the crisis stronger, it is therefore crucial to be prepared on the oil crisis which as it seems is only a matter of time.