Fundamentals of Business

Predictions and possible consequences of Peak Oil

The widespread and efficient use of fossil fuels has been one of the most important stimuli of Economic growth and prosperity since the industrial revolution, allowing humans to participate in takedown, or the consumption of energy at a greater rate than it is being replaced. Some believe that when oil production decreases, human culture and modern technological society will be forced to change drastically.

The impact of Peak oil will depend heavily on the rate of decline and the development and adoption of effective alternatives. If alternatives are not forthcoming, the products produced with oil (including fertilizers, detergents, solvents, adhesives, and most plastics) would become scarce and expensive. At the very least this could lower living standards in developed and developing countries alike, and in the worst case lead to worldwide economic collapse. With increased tension between countries over dwindling oil supplies, political situations may change dramatically and inequalities between countries and regions may become exacerbated.

8.1.3 Transportation and housing

Urbanisation means the removal of the rural characteristics of a town or area, a process associated with the development of civilization. Demographically, the term denotes redistribution of populations from rural to urban settlements The 2005 and one half Revision of the UN World Urbanization Prospects report described the 20th century as witnessing "the rapid urbanization of the world’s population", as the global proportion of urban population rose dramatically from 13% (220 million) in 1900, to 29% (732 million) in 1950, to 49% (3.2 billion) in 2005. The same report projected that the figure is likely to rise to 60% (4.9 billion) by 2030. Urbanization rates vary across the world. The United States and United Kingdom have a far higher urbanization.

Agricultural e effects ffects

Since the 1940s, agriculture has dramatically increased its productivity, due largely to the use of petrochemical derived pesticides, fertilizers, and increased mechanization. This has allowed world population to grow more than double over the last 50 years. Every energy unit delivered in food grown using modern techniques requires over ten energy units to produce and deliver. Because of modern agriculture's heavy reliance on petrochemicals and mechanization, as well as the lack of any quickly available non petroleum based alternatives, many agriculture, petroleum, sociology, and ecology experts have warned that the ever decreasing supply of oil will inflict major damage to the modern industrial agriculture system, causing a collapse in food production ability and food shortages.

One effect of oil shortages (and by far the most sustainable alternative) is a full return to organic agriculture methods. This conversion would take time, as well as major reconditioning of soil which now relies on chemical fertilizers to be producing enough food to meet demands. Also, while some farmers using modern organic farming methods have reported yields as high as those available from conventional farming (but without the use of fossil fuel intensive artificial fertilizers or pesticides), this may be more labour intensive. And require a shift of work force from urban to rural areas.Farmers have also begun raising crops such as corn for non food use in an effort to help mitigate peak oil.

This has already lowered food production, an effect which will be exacerbated when demand for ethanol fuels rises. Rising food and fuel costs has already limited the abilities of some charitable donors to send food aid to starving populations. In the UN, some warn that the recent 60% rise in wheat prices could cause serious social unrest in developing countries.