The peak oil saw, conquered the markets and left leaving behind the global economy in chaos and strengthening its beckoning for another round of struggle for development. It was recently acknowledged by the IEA, in their World Energy Outlook executive summary, in which they wrote the following:

“Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains it's all time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL's) and unconventional oil grows strongly.”

Supporting the statement above, when we add unconventional oil output and natural gas liquids to conventional crude oil output, production has not grown much since late 2004. Something happened from 2004 and onward which speaks volumes on the implications of this peak of world liquid fuel production.

These implications of peak oil are critical to civilization. They are critical to how we grow the physical economy of production and consumption. They are critical as to how we can preserve wealth or future buying power of food, energy and all other services, which require energy as well. The US has already reduced consumption. The Americans have reduced their oil consumption and are driving less as this is likely a result of higher prices stifling demand.

The implications of peak conventional easy to get oil, without a new form of cheap, dense energy, in the aggregate, real GDP per capita reached in 2007 will be peak. This means that maintaining standards of living is going to be more challenging and force the global economy to be more creative as ever.

The answer to the problems laid above lies in making the necessary investments in the physical economy that gives the tools to be more productive and efficient. Sometimes, it can be as simple as replacing incandescent light bulbs in your home with LED light bulbs that consume far less energy. By applying the same concept to run our factories, our computers and we’ll be just fine with respect to the peak oil. However, it’s easier said than done. So we all must put our thinking caps on and ask ourselves-How can we be more efficient and productive with the same amount of energy we put in or with less energy?

We are indeed all engineers now!