Peak Oil Task Force Report - City of Bloomington - State of Indiana

THE ECONOMIC CONTEXT
The enormous expansion of the human population and the economies of the United States and
many other nations in the past 100 years have been accomplished by, and allowed by, a
commensurate expansion in the use of fossil (old) fuels, meaning coal, oil, and natural gas. To
many energy analysts the expansion of cheap fuel energy has been the principal enabler of
economic expansion, far more important than business acumen, economic policy, or ideology.
– Charles A.S. Hall, Robert Powers and William Schoenberg 24
As this Report is being written, the most serious global recession since World War II has
been under way for over a year. While the severity and duration of the recession may
include factors that are not directly connected to the peak oil phenomenon, some observers
attribute the economic crisis to the rapid escalation of oil prices over the last decade – an
escalation that reached an unprecedented high in the summer of 2008.
As is commonly understood, the current crisis was largely triggered by the collapse of the
sub‐prime mortgage market. However, what is less understood is the link between oil and
the housing market. It is very possible that the trend of ever‐increasing energy costs from
2004‐2008 caused the housing bubble to burst.
24 Charles A.S. Hall et al.,“Peak Oil, EROI, Investments and the Economy in an Uncertain Future,” in Pimentel,
ed., Biofuels, Solar and Wind as Renewable Energy Systems: Benefits and Risks, David Pimentel, ed. (New York:
Springer, 2008), 110.
Report of the Bloomington Peak Oil Task Force
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