Welcome to the age of Peak Oil.
In 1956, a prominent geologist for Shell Oil company, Dr. Marion King Hubbert predicted that oil production in the lower 48 states of the US would peak between 1965-1970. He was ridiculed by his colleagues for his prediction and in 1970, US produced more oil than any previous year - exactly the year when the production peaked.
In 1969, Dr. Hubbert went on to predict a peak for world oil production between 1995-2000, based on the best data available at that time. His prophecy about peaking of world oil production is known as Hubbert Peak theory. Even if Dr. Hubbert was proved too early in his prophecy, a 6-8 year margin of error is still a pretty good shot at being a prophet, given the 150 year long history of the oil age.
All this does NOT mean that we'll run out of oil tomorrow; however, it DOES mean that world demand will from now on outstrip supply. New reserves will be discovered and exploited, but they will be: 1) increasingly hard to produce, 2)very expensive to develop and 3) insufficient to meet an ever increasing demand. The result will be ever more expensive oil, which will affect every part of modern society, from agriculture (dependent on oil-based fertilizers and pesticides) to manufacturing (oil-based plastics, fabrics and chemicals) and even pharmaceuticals (oil-based chemicals and even the capsules drugs are packed in).
We have known of Dr. Hubbert's theory of Peak Oil for over 50 years and have squandered all that time on boondoggles such as synthetic fuels, ethanol and now "cap and trade" - none of which address the real issue. The bill's now due, and will be paid in starvation, disease and war without end - and no one seems to care.

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