Peak oil has several possible consequences on energy choices both now and in the future. As oil production decreases in the relatively near future, its impact on climate will be reduced, although there will be potential impacts on climate change resulting from the timing of peak oil. The decline of the global oil supply and the consequent increasing cost of oil products mean that a country's abilities to deal with the effects of climate change will be reduced. Oil production, refining, transportation, and burning are all energy and water intensive – in turn significantly affecting climate.

Introduction

Given that petroleum is a finite, nonrenewable resource, it is inevitable that the worldwide production of oil will eventually reach a peak. World demand for oil currently totals 84 million barrels per day and is growing at a rate of just over 2% a year (Energy Information Administration, 2006a). This growth is not expected to abate in the near future as the economies of developing countries are rapidly expanding, and developed countries like the United States have limited conservation awareness. If countries such as China and India, in which automobile use and factories are growing vigorously, start consuming oil at just one-half of current U.S. per capita levels, global demand would instantly jump 96%. According to the U.S. Energy Information Administration, global demand is predicted to reach 120 million barrels per day by 2030.