Recap for new VirtaPay users: In part 1 of this blog post series, we covered some of the events of the global economic crisis. In part 2, we explained a bit about who gets hurt by the crisis, revealing how the middle-class and poor get hurt the most as the wealthy consolidate power and wealth during times of economic trouble.
In this post we cover what we believe to be one of the root causes of the crisis. To understand where VirtaPay is headed, it is important to understand the current crisis. As you read this blog post series on the global economic crisis, please keep in mind that in our final part of the series, everything will tie together and you will see how VirtaPay is positioning to help you profit from the crisis… and hopefully help make our world better in the process.
What’s at the root of the trouble?
During our research of the current global economic crisis, we were looking for the root causes of all this trouble. As the trails of evidence led us deeper and deeper, a couple of things continued to resurface. One of those is “peak oil”.
Peak oil refers to the fact that the world is running out of oil. The problem is simple to understand. Humanity has an ever-growing demand for oil. Our oil wells have limited supply. It has become apparent that the world’s oil reserves are now very close to reaching a point where our demand exceeds the supply available. We are reaching—or may have already reached—the “peak”.
Why does oil matter?
The availability of a cheap ubiquitous power source (oil) is what literally powered the growth of our civilization from the early 1900s until now. Having a cheap, concentrated power source allowed humanity to go from riding on the backs of horses to the rise of automobiles, aircraft, and space exploration in such a short period of time.
Oil has been a massive boon to humanity, both in terms of industry and wealth. Many of the world’s wealthiest families today are the offspring of people who—many years ago—recognized the importance of oil and quickly secured all the oil resources they could for themselves. Then they used their oil profits to acquire exclusive access to more and more oil fields.
We believe our current global economic crisis is tied directly to the decline of world oil supplies. No, we don’t believe this is the only reason for the crisis. However, we do believe it to be a primary cause.
What about declines in oil prices?
You may see oil prices decline (at the petrol or gas pump) due to the global recession. These price declines are a direct result of industrial production slowing down in the current global economic crisis. Most industrial production relies on oil, and so the recession can temporarily reduce demand for oil. Which, in turn, will naturally lower the price of oil.
These price declines are temporary, and every time industry tries to speed up, we will be hit with quickly rising oil prices. We believe this will tend to extend the economic slowdown and to also slightly prolong the decline of our diminishing oil supplies.
What about other energy sources?
We are at a challenging new point in human history. We have never faced such a challenge. Our capitalist global economy is actually a huge part of the problem.
In a capitalist system, commodities compete on price. Energy is a commodity. The lowest price wins. If you can provide energy at a lower price with oil than your competitor can provide it with solar power, then you win. In today’s system clean, green energy technologies are still too expensive and so dirty, cheap oil wins on price.
The oil rich families and the corporations they own are deeply invested in petroleum extraction and refining technologies. In turn, oil is deeply entrenched in our global economic system. The oil companies have spent billions on equipment specifically designed to extract oil from the Earth and refine it into various petroleum-based products. They have secured lands and oil fields across the globe.
Yes, oil is a dying energy source, but the wealthy oil barons will milk it until every oil well runs dry. They don’t want any new technology to step in and destroy their investment in petroleum extraction and refining technology… until oil is completely gone.
Green Energy
Green energy sources are the next natural step for humanity. There is abundant energy available from the sun, wind and water to provide many times what humanity needs. But dirty oil, coal, and high-risk nuclear (think of Japan) energy sources are stealing the show for now.
We are being held back by the greed of the deeply invested wealthy who control our global economic system. They are determined to keep the system in their control and to get every ounce of benefit they can from their existing investments in petroleum extraction and refining technology. They suppress green energy technology behind the scenes while publicly acting as if they support it.
The fact is, they do not support green energy. Not yet. It scares them. They stand to lose untold billions of dollars they have spent on research, development, production and purchasing of petroleum technologies. Not to mention the oil fields they have sometimes purchased or more often gained access to, through methods which are devious, insidious and highly unethical (we’ll explain more about that in an upcoming post).
Where it’s headed…
We believe our modern world is headed for a energy shortage crisis like nothing we have ever seen.
Former less-developed countries are quickly become more industrialized and more westernized. This includes countries such as Brazil, Russia, India and China. These four countries alone represent over 40% of the world population. These countries and others are now rapidly raising their standard of living and along with it, their rate of energy usage is climbing dramatically.
Unfortunately the natural resources of our Earth are limited, finite. It has been estimated that if every country in the world consumed resources like the U.S. we would need the resources of seven Earths just to sustain where we are today (not even considering growth).
What will happen when oil runs out?
Of course, no one can foretell the future with 100% certainty, but we can look at current trends and extrapolate a best guess. First, we looked at the current rate of oil decline and at humanity’s ever-growing demand for energy. Then, we looked at the rate at which green energy technology is being adopted in place of oil. By converging those two trends, we estimate that humanity will effectively run out of oil over 100 years before we have enough green energy technology ready to replace it.
Humanity is not ready for what is coming.
Part 4 is next…
We have at least three more parts in our Global Crisis blog post series. Be sure to read every post in the series to discover the big picture of how VirtaPay is positioning to help you profit from the global economic crisis and to help make the world a better place in the process.
