The Gathering Storm  

Analyst Charles T. Maxwell outlines his views on the peak (a relatively optimistic 2020 for the main peak).

THE ENERGY CRISIS WE ARE IN today is entirely different from the temporary problems we experienced in 1973-74, 1979-86, 1990-91 and 2000. Then, there were political issues: Some nations were willing and able to produce oil for our use and some were not. There was always sufficient worldwide geological capacity to produce additional barrels of crude oil to meet the world's needs.

No longer. In the next major energy crisis, that capacity will likely be eroded. So the crisis should have a severe impact, be global in scope, and be difficult to solve. Plainly, it will be unprecedented. What may emerge could well be a restructured world, as well as a restructured oil industry.

Over the next 25 years, a new world energy economy will arrive in three waves. We are near the top of the first and smallest one, a warning wave. A second more powerful wave likely will hit in the 2009-2010 period when the non-OPEC world may reach its all-time highest output of crude oil, subsequently declining to become ever more dependent on OPEC for incremental barrels of production. The final wave should break around 2020, or earlier, as even OPEC's vast reserves are tapped at a maximum rate of production. After that, oil volume should head down and keep falling, never to revive.