Spindletop Hill, Beaumont Texas, the first gusher on January 10, 1901.
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The first in a series where we look at why those basic things that we take for granted, like water, food and fuel are getting expensive and scarce, all at once.
In 1956, American geophysicist M. King Hubbert calculated that the rate of production of fossil fuels would peak in the United States in about 1970 and then start declining. He was laughed out of the conference room. However, ultimately he was proven correct; now we are probably at the worldwide Hubbert's Peak. A hundred years ago you just stuck a pipe in the ground and the oil rushed out; now it is not so easy, and America's oil comes from deep under the ocean, is cooked out of rocks in Alberta, or is purchased from nations with security issues. Now the United States, Canada, Norway, and the United Kingdom are well past their peak, while Saudi Arabia and Russia are approaching it. Oil is still being found (there was a recent big hit in Brazil, and there are thought to be big reserves in the Arctic.) but it harder to get at and a lot more expensive. (Link here for more detailed information on Peak Oil.)
That's the supply side; then there is demand. The economic boom of the last thirty years has lifted billions out of poverty around the world, and people are using their newfound wealth to buy things that we take for granted in North America, not just the obvious cars, but TV sets and diesel generators to power them, meat that requires grain for feed and fertilizers for grain. In the developed world we have done almost nothing to reduce our consumption, and are in fact consuming more fossil fuels per capita than ever before, with bigger houses and more SUVs on the road.
Combine declining and uncertain supply with exploding demand, and the result is a rapid increase in price, with ripple effects throughout the rest of our society, which is built almost entirely out of cheap oil.
Difficulty level: Easy
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