In creating wealth through exploitation and manufacturing of natural resources, it is necessary to be a balance between the quantity of goods produced and the ability to people to consume these goods. If there is over-production or under-production, exchange values have no reference and the system is chaotic. We speak then about financial or economic crisis. In the case of under-production due to a lack of natural resources to operate or transform (crisis of metallurgy in France for example), there is economic crisis and thus financial. But it is in fact a crisis of available resources. The 2008 crisis occurs at the peak of oil production and the cause of this crisis is not only in the heart of banks but mainly in the oil production which cannot satisfy the ever increasing demand.
Opposite is a graph and text excerpted from the 2005 edition of "L'Industrie Petroliere en 2004"(The Oil Industry in 2004), a document put out by the French Ministry of Economy and Finance.
2005-2030 Production in millions of barrels (MB) per day
You can see that even if the 2005 available reserves, i.e. 1 080 gigabarrels (GB), are greater than global needs for the 2005-2030 period based on a 2%/year growth rate, they will not be enough to meet demand after 2013, due to the technical inflexibility that we mentioned earlier and which, from 2005 to 2030, will prevent operators from extracting more than 695 GB of the 1 080 GB from the 2005 proven available reserves.
Declining production for deposits that were being exploited on January 1, 2005 is shown in dark green. Estimated production for deposits to be developed from 2005 to 2013 is shown in light green. The graph clearly illustrates that to increase production, it will be necessary to develop new deposits that we unfortunately haven’t discovered yet! A few pages further on, the document explains the reassessment of OPEP’s 1985-1990 reserves. This means that the 2013 date given for peak production is a “no later than” date.
What is more interesting is the curve traced by the light blue “expected consumption” lines. Because you can’t consume what hasn’t been produced yet, demand will not be met. On that basis, it is easy to predict a rise in prices followed by a decrease in demand and the shift into a declining economy.
The financial crisis, then, is above all a natural resource crisis that was anticipated by the French Ministry of Economy and Finance, among others (anyone who was keeping up with the evolution of oil production was predicting this type of scenario).
To emerge from the crisis, we would have to increase the quantity of accessible natural resources, and that is impossible. We will never emerge from this crisis, and that signals the decline of the industrial world as we know it. There is no point in investing money in miracle solutions. Money is only virtual, and we need something concrete.
As usual, it is always tempting and comforting to blame others. In fact, it all began when farmers began to leave their land to get jobs in factories. If they hadn’t succumbed to the lure of gain, the factories would never have gone into operation. But we always want more – not a lot, but just a bit more – and modern life ensnared people whose lives were sometimes tough, just as it continues to attract millions of people in poor countries, ready to die for a piece of the pie. So to tell the truth, we all are responsible for the situation. By always wanting more, we have pushed the system to extract more and more from the depths of the Earth. The issue is not to blame anyone, but just to recognize that we all have participated in exhausting our natural resources, all the more so that we are rich – that is, we have more than most of our planet’s inhabitants.