Inevitable Consequences: The End of Abundance
There is nothing we know of now that carries so much energy per unit volume or per unit weight, as oil (except explosives). Oil is irreplaceable in large forms of transportation including aircrafts, military vehicles, trucks, and container shipping (most imports, exports). As a result, the cost of all transported items will go up. And up. Including transporting yourself: If you want to visit other countries, do it now.
As the oil supply shrinks, not even sky-high prices can make more oil instantly appear, so there will be shortages. (The time-lag from oil discovery to oil production is 8 – 10 years, due to permitting and infrastructure delays.) Oil shortages become frightening when they impact farm equipment, pesticide production, grocery trucking, and food imports. There will have to be oil rationing to prevent food riots. Start a vegetable garden.
About 30% of US oil consumption is for industrial chemicals: plastics, polystyrene, polyurethane, PVC (circuit boards, hoses, pipes), lubricants, bitumen, nylon, cosmetics, hairspray, deodorants, detergents. All will become more expensive, if not in short supply.
In addition, there are geopolitical consequences. China and India will compete fiercely for the remaining oil, and we can hardly tell them to stop wanting to drive cars like us. International friction over possession of oil supplies is entirely predictable.
OPEC will soon have more oil reserves than the rest of the world put together. While we remain addicted to oil, OPEC will move into the drug-dealer position, with immense profits and power. They see that future, and beyond it, much better than we do. In Saudi Arabia there is a saying: "My father rode a camel. I drive a car. My son flies a jet airplane. His son will ride a camel."
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In the mid 1980s, 6 of the major OPEC countries raised their claimed "proved" reserves by huge amounts - between 50 and 200%, literally, in each case, from one year to the next - in the course of competition for export quotas. The increases were not accompanied by announcements of major discoveries. The posted reserves for the Neutral Zone - shared by Saudi Arabia and Kuwait - were NOT raised, but continued to decrease with production. A January 2006 report in Petroleum Intelligence Weekly reported on a 2001 internal Kuwait Oil Company audit which put actually "proved" reserves at a quarter of the official number. Former Iranian National Oil Co. exec. Dr. Bakhtiari was one analyst who claimed that Iran's reserves are overstated by almost 100 billion barrels. As recently reported in the Wall Street Journal, a former top Saudi Aramco executive, Dr. Sadad al-Husseini, has now publicly endorsed the idea that world reserves are overstated by as much as one third - 300 billion barrels.