Peak oil will cause a crisis in transportation because there are no ready liquid fuel substitutes of comparable quality or quantity. We can’t fill gas tanks with coal, wind, solar or nuclear fuel. A February 2005 report commissioned by the Department of Energy, Peaking of World Oil Production: Impacts, Mitigation and Risk Management, concluded that a crash program to produce liquid fuel alternatives at the maximum feasible rate must start twenty years before peak to avoid significant supply shortages. Oil prices haven’t promoted those alternatives. In the Wall Street Journal on January 10, 2006, Marc Sumerlin, formerly Deputy Director of President Bush’s National Economic Council, noted that investment in alternatives to oil was stymied by $20/barrel futures market prices for oil between 1986 and 2003 and fears of a repeat of the 1998 plunge down to $10/barrel.
$70/barrel oil and $3.50/gallon gas will seem cheap after global peak oil. In its September 6, 2005 report, Oil Shockwave, the National Commission on Energy Policy & Securing America’s Future Energy projected that a sustained four percent global shortfall in daily oil supply would raise oil prices above $160 per barrel. Prices that high would inflict a ruinous worldwide recession.
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