Being a Thrivalist/Prepper/Survalist/Suburban Homesteader is all about preparedness, and we may not all agree on what we're preparing for ... or it may just be a sense that all things are not right.
Way back in the day, I started following several authors - both on line and off - who considered themselves part of the Peak Oil crowd. Peak Oil, for those of you who may be new to this stuff (because we don't hear as much about Peak Oil these days as we used to), is the point at which the world has used "half" the oil there is available. It's like climbing a mountain. When you get to the "peak", your journey is not concluded. You still have to come back down.
The Peak Oil crowd, based on extensive research by experts in the field (most notably M. King Hubbert), states that the Peak for US oil production happened in the 1970s. That doesn't mean that we're not producing oil anymore, because we are, but that the amount we're getting and the quality of that crude is considerably diminished. It is very telling we discovered the Bakken Tar Sands back in the 1950s, but didn't start drilling until recently, after the pumpjacks in Texas and Oklahoma stopped pulling the black gold from the ground.
Recently, I stumbled upon this article with the very ominous title Oil Collapse Couldn't Come at a Worse Time for the Industry, which made me think more about Peak Oil. What's interesting is that, currently, the price of oil per barrel is under $50, but we're still paying almost $3/gallon at the pump. The article explains why: oil companies are heavily in debt, and Saudi Arabia has flooded the market with their oil (producing around 10 million barrels per day).
What's very telling is this quote from Fadel Gheit, senior energy analyst at Oppenheimer, who said, "At the end of the day, borrowing is borrowing. Having this huge amount of debt is never, never good. Especially, you see what the companies are doing right now. The oil companies are running on cash flow, not on earnings.... So all companies that I know of are not living within their means.... How long can that last? Every company I know of, including Chevron, Exxon, BP, Apache, Anadarko, every company, you name it. They are all exceeding their cash flow. That's not sustainable. Something's got to give."
According to the article, the banks reevaluate their outstanding loans in October and decide what to do. Also according to the article, some smaller oil companies many find themselves without any financing, which means, they may have to close their doors. Maybe they'll get bought out by bigger companies ... unless those bigger companies don't have the revenue (or credit worthiness) to buy them out, and then, who knows.
Whatever happens, it looks like it's going to be an interesting fall and winter, and it doesn't look like the consumer price for gasoline or oil is going to drop, even as the price of crude hits the rocky bottom.