What is Peak of oil crisis? How this reflects in the global economy?

Please be specific without copy and paste or add links. I will give 10 points to the best answer.What is Peak of oil crisis? How this reflects in the global economy?
I think you mean ';Peak Oil,'; which isn't a crisis, it is a geologic and technology issue. Peak oil essentially says that forward annual oil production can only decline. I looked up an estimate of the equation, which is a differential equation, essentially looking at the rate of production change over time using non-linear least squares estimation. We have probably past the peak, so oil will continuously decline while at the same time, demand is rising, making prices very elastic.





The price of oil will rise faster than other prices, making it a larger and larger component of all expenditures, until a good substitute is found. In particular, socialist governments will find it increasingly difficult to manage their economies and may fail or have revolutions. Previously stable democracies may find it difficult to continue functioning and food will likely become scarce. All of this assumes no changes in technology, birth rates, converting existing farming techniques for use with small family farms in poor regions and no good substitutes for oil. Substitution effects will mitigate this substantially.





One equation being used to estimate peak oil is:


z'(t)=(p+qz(t)/m)(m-z(t))x(t). At peak oil z'(t)=0.





z(t) is the cumulative function of oil production and x(t) is a function of ';control variables,'; essentially the environmental variables.





The parameters of m have been estimated at 1524. p has been estimated at .00010439 and q at .063497.





x(t) is somewhat controversial in structure and you have to be a geologist or an energy economist to argue over its functional form.





I can simplify the above equation by pointing out that z'(t) is a quadratic loss function in z(t). In other words it is like an upside down parabola multiplied by the control function which essentially elongates and distorts it. Which, if you have not had the algebra, is essentially the equation of throwing something up in the air on a windy day and finding its actual path based on its wind resistance. When it hits its peak in the air, that is the same idea as peak oil.What is Peak of oil crisis? How this reflects in the global economy?
Peak Oil is simply the point on a supply curve where half of the total available supply has been extracted. This is a fixed effect of existence in a closed system. The ';crisis'; that you speak of however is a socio-political creation. Expansion--%26gt;Peak--%26gt;Contraction is inevitable with any finite resource (we can speak of peak Coal in a few hundred years, or even peak Uranium, if the US decides to bolster it's power grid with hundreds of new nuclear plants (please God, no)). How we as a society react to this impending and inevitable reality frames the degree of ';crisis'; we will experience. Unfortunately, we in North America have done precisely the opposite of what would be needed to smooth the transition down the contraction side of the curve: We've increased our demand and reliance on oil without developing significant alternatives. Practically everything produced in our society is either an oil derivative or transported with the help of oil. The later we wait to make the necessary transition, the more difficult it will be to do so, thus amplifying the 'crisis' element. Since most commodities rely to some degree on oil or oil transport, I cannot envision a post-peak world economy surviving unscathed. Virtually all economic systems will be severely shaken. Globalization as we know it will transform to more local economic relationships. This is inevitable unless a truly remarkable breakthrough energy source to displace oil is discovered. Many believe that this is highly unlikely.