Some governments are using taxes to try and reduce demand. They’re claiming it’s for environmental purposes but we’re definitely hitting the Peak Oil wall now. US fracking produces very light oil, suitable primarily for (a little bit of) gasoline and (mostly) lighter products. “Normal” crude oil, suitable for diesel and bunker fuel (used by ships) has been in decline for a while now, as evidenced by bunker fuel production that has been declining for the last eight years with no letup in sight, and diesel production has been down since the end of 2015 with a seriously significant decline in the last year. Worldwide, we’re running out of the crude needed to produce the heavier fuels, and it’s becoming evident in charts that politicians can understand.
So what choice do politicians have? Tell the public that scarcity and astronomical prices are in the near future, or up the taxes, try to reduce demand, claim it’s for the environment, and hope the can rolls down the road a bit further before falling into a ditch? The French protests are what we’re seeing now, and the situation is only beginning to unfold. Imagine what we’ll be seeing when the scarcity becomes obvious. In most economic systems, that happens between 10% and 20% decline from peak, because economies function “in the margin” and the rule of thumb is the “margin” is around 10%. After that you’re out of wiggle room in the system.
For Whom is Peal Oil Coming? If You Own a Diesel Car, it’s Coming for You!