Chevron reported 27 percent decline in profit May 3
Dwindling supply to impact economy
A one-paragraph blip tucked away in a corner of the business section May 3 may have been the most important story of the day in terms of impact on our lives.
The brief article mentioned Chevron's 27 percent decline in first-quarter profit, attributed to lower oil prices and rough winter weather. It went on to say, "Chevron and other major oil companies are struggling to maintain production as they drain oil and gas from their fields around the world. At the same time, the cost of exploring new fields is rising as they have to venture into more extreme and remote conditions to access hydrocarbons."
In other words, peak oil has arrived.
As the cost of getting oil and gas increases, market prices must also rise. But our ability to pay higher prices is limited due to their huge drag on the economy. When production costs exceed the affordability to consumers, shortages loom, because oil companies aren't going to produce if they don't make a profit.
It is difficult to overstate the implications of this. One thing is for sure: The greater the dependence on oil, the more difficult the future will be. That applies to whole cities and countries, as well as individuals. And it screams for all to do everything possible to reduce their use of fossil fuels as quickly as possible. For a continued dependence on them won't only lead to chaos and disruption of the climate, but our finances and economy as well.
Chip Thomas, Tampa