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Alberta tarsands: photo by S.Jocz © Western Canada Wilderness Committee
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food riots, Mexico 2008: David Sheen
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food riot, Egypt 2008: © AP / Nasser Nasser
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The oil crisis will come in the next 6 years, say market fundamentalists of the Deutsche Bank, whose Oct 09 study predicts "peak oil" will be triggered by price, not supply: "we expect demand to break decisively" when oil prices rise to US$150/bbl, gas US$4/gal, "the tipping point that will destroy gasoline demand and mark the end of the age of oil." OPEC spare capacity is a myth. They predict a huge destabilizing oil shock (like 1972, 1980, 2008) between 2010-2016, followed by a major shift to natgas, electric cars and e-bikes and a permanent oil price collapse.
They say Canadian tarsands, Brazil's Guara offshore field, oil shales will be among the (currently overpriced) losers. Agricultural production (dependent on fuel and fertilizer), heavy trucking and aviation will be hard hit. Oilco owners will engage in an orgy of profit-taking and invest in other industries.
They also say that US gasoline consumers are undertaxed. Just to cover the cost of the Iraq war, gasoline prices should be some 54 cents per gallon higher (p.10). Nor do US gas prices reflect the increased risk of drilling and refining in a hurricane zone, the Gulf of Mexico. (p.25).
In short term policy, fuel efficiency is an obvious choice; decades of US government laxity on CAFE fuel efficiency standards helped create the present crisis [implicitly, politicians caved in to the auto and oil lobbies] (p.31). Forsaking gas hogs, Japan and Germany have been able to thrive on $8 gas (p.28 ). In the long term, hybrids and electric cars will end the oil age. China and the US are both moving fast in this direction.
Finally, they expect climate action limiting CO2 to fail -- resisted by the habits of US consumers, rising demand in China, producers in Mid-East and Russia. By 2022 the falling demand for oil will reduce C02 [but too late to avoid catastrophic climate change] (p.57-58).
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For peaceful alternatives to these scenarios, see Matt Savinar's Life After the Oil Crash, TransitionUS.org (formerly Relocalize.net), Canada's Foodforethought.net, "Food crisis -- the facts" in New Internationalist Dec 2008, Food First founded by Francis Moore Lappé, and Via Campesina.
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