PEAK OIL

The overall production of conventional and unconventional oil would decline.
1. Peak oil would occur and it would not be possible, at least in the foreseeable future153 ,
to entirely compensate for the decline in the production of conventional oil with
unconventional oil or other energy and raw material sources. The expression
“foreseeable” is very important in this context. Ultimately, it leads to a loss of
confidence in markets.
In the short term, the global economy would respond proportionally to the
decline in oil supply. 154
1. Increasing oil prices would reduce consumption and economic output. This would
lead to recessions.
2. The increase in transportation costs would cause the prices of all traded goods to
rise. 155 Trade volumes would decrease. For some actors, this would only mean losing
sources of income, whereas others would no longer be able to afford essential food
products.
3. National budgets would be under extreme pressure. Expenditure for securing food
supplies (increasing food import costs) or social spending (increasing unemployment
rate) would compete with the necessary investments in oil substitutes and green tech.
Revenues would decrease considerably as a result of recession and necessary tax
reductions.
153 Cf. Robert L. Hirsch, Roger Bezdek and Robert Wendling, Peaking of World Oil Production: Impacts, Mitigation, & Risk Management (February 2005), 57 ff.,
http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf (accessed on 11 October 2010). This study assumes that the economy would take approximately 20
years to adapt to the conditions of a post-peak-oil world. Sufficient investments 20 years before that peak occurs could prevent negative consequences. If the first
investments coincide with the peak, the ensuing transition phase would also take 20 years. It is thus implicitly assumed in this context that the respective investment
environment for switching to green tech is generally comparable in both cases. In the light of the systemic considerations described here, this assumption should be
regarded as a highly disputable simplification. At any rate, however, it shows that the transformation period would be very long, which means that the uncertainty
presumed here seems plausible.
154 Cf. Ibid., 24 ff.
155 For ways of substituting oil-based fuels, cf. Chapter 3.1.3.
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