written 12 October, 2025
published 19 October, 2025
For the last two centuries, modern civilization has been built on the availability of abundant affordable energy from stored fossil fuels, deposited millions of years previously. But these resources are finite, and humanity is now dealing with a peak in global production: a point of maximum extraction prior to an inevitable decline. This was forecast decades ago, but ignored by true believers who deny any limits to reality.
Domestic oil production helped the US lead the world after WW2, changing everything, making America a powerhouse on the planet. But domestic oil production peaked in 1972, initiating a decade of uncontrolled inflation, and shifted the balance of power to the middle east. An eventual agreement to denominate all global oil sales in US dollars brought a measure of stability for a while. But consumption kept increasing, and global production eventually peaked in the early 2000's, amplifying the 2007 economic crash of an over extended housing market. Since then, diesel has become more expensive than gasoline, adversely affecting the entire transportation economy.
In 2005, new forms of oil production were developed, designated as unconventional oil. This oil was more expensive to produce, increasing the cost of everything. The most productive sources were deep sea ocean and tight rock (fracking). Fracking extracts thin layers of oil from rock that must be fractured open under high pressure. The reserves are small and the wells deplete in just a few years, requiring constant drilling of new wells. Exploiting these expensive unconventional sources, the US has again become a leading oil producer.
However, the oil industry now acknowledges US fracking resources have peaked. All global production from any source is now flat or in decline, with an estimated $500B investment needed annually to make up the decline, let alone power any new growth.
Discovery of new global oil reserves peaked half a century ago. While there are still oil resources to extract, these are smaller, more difficult to produce, increasing prices and driving inflation. Without even discussing the adverse climate impact, the economics of our finite fossil fuel resources threaten the stability of our fragile, highly leveraged financial system.
Our economy is further destabilized by the erratic application of tariffs, which increase prices, and the authoritarian activities of the government, causing an increase in gold prices, and a down grading of US debt. Efforts to avoid the dollar in global trade are growing, and concerns of an economic crash are increasing.
Rather than seeing what is coming and embracing effective changes, US leadership is incoherent, moving full speed in reverse. They kill technologies that can help, and instead push further fossil fuel development and a resurgence of nuclear power. But oil production is unprofitable for the corporations at low prices, and unaffordable for the consumers at high prices. The nuclear buzz, expected to power the growing AI frenzy, is attracting billions in investment, in part due to massive taxpayer subsidies. But the reality of supply chain limitations, finite fuel sources, and unproven designs means this may be just a financial bubble, which could pop with a single messy accident, resulting from hasty construction.
Though the US refuses to take action, the rest of the world is beginning to respond, slowly shifting to renewable energy, collecting free power from the sun and wind. China is leading the way, producing most of the global supply of solar panels, batteries, and affordable EV's, while installing half of all the wind power last year. But the push in on everywhere. Globally, a gigawatt of solar is installed every day, and the pace is increasing.
Even though the sun only shines for part of the day, a gigawatt array collects about the same amount of power as a modest Small Modular Reactor (SMR) operating full time. But the solar arrays being installed today cost $1.2B, while reactor salesmen suggest a SMR will cost between $3-$7B. However, nobody knows what a SMR will really cost, since none exist yet in the real world.
The Post Carbon Institute suggests oil depletion shows our current industrial civilization is unstable, incapable of endless growth in the way we use energy and resources. Depletion demands we begin prioritizing those social features we really need. We must start to live with the planet, not in spite of it. It calls for us to imagine a more localized energy future, and start adapting now, while we still have some opportunities.
