Test - peak oil

High Oil Prices Stimulate Renewable Energy

Higher oil prices stimulate renewable energy. Renewable energy enables the world economies to grow sustainably, where our current reliance on fossil fuels is entirely unsustainable.

To stimulate renewable energy we must see what is known as supply shock. A supply shock is an event that suddenly changes the price of a commodity or service. In the case of oil this will be caused by a sudden decrease in the supply relative to demand. This sudden change affects the equilibrium price.

When oil approaches $200 per barrel we should get the shock and a stimulus effect on renewable energy. This will occur when the oil supply out paces demand by something like 10 percent.

Instability in the Middle East may very well be the catalyst that causes oil prices to go sharply higher, which in turn will create the shock that will stimulate renewable energy.

There are a great many unknowns, but renewable energy will be driven by how market demand reacts to higher oil prices.

© 2011, Richard Matthews. All rights reserved.

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Peak Water?

Peak water is the condition where water demand is higher than the rate at which supply is replenished. As referenced in an EcoSeed article, climate change, burgeoning population growth, pollution and increased industrial and agricultural capacity are putting more pressure on already stretched water resources.

Although it is contentious, many believe that we have passed a tipping point in water consumption, the same way many believe we have passed a tipping point for oil. In many places there is clear evidence of over-extraction of groundwater in relation to recharge rates.

Around the world rivers and lakes are dead and dying, and groundwater aquifers are being utilized faster than they can be replenished. The result is aquatic life is being driven to extinction. These growing rates of water use have direct adverse impacts on both human and ecosystem health.

A rise in global temperatures will be a major burden on water resources in the coming years. Other factors like population growth, changes in dietary patterns, urbanization, and economic development may prove even more problematic. Increased agricultural irrigation and increased water usage for industrial purposes are exploiting water reserves at an unprecedented rate. In India alone there are over 23 million deep bore wells that are using technology created to access oil.

Although water is not a finite resource like oil, the concept of peak water can focus attention on water demand surpassing rates of replenishment. The concept has particular usefulness in countries like India, Pakistan and China. It can also draw attention to the inefficient use of water which is a global problem. Peak water could just be the wake-up call we need to better manage our water resources.

© 2011, Richard Matthews. All rights reserved.

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