German Military Study Warns of Drastic Crises as Oil Production Begins Decline

German Military Study Warns of Drastic Crises as Oil Production Begins Decline

A study by a German military think tank has analyzed how "peak oil" might change the global economy and warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the Western industrial nations, of the "total collapse of the markets" and of serious political and economic crises.

The document, which was leaked on the Internet, shows for the first time how carefully the German government has considered a potential energy crisis following "peak oil" - a term used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline.

This would result in a permanent supply crisis - and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The study by the Future Analysis department of the German military's Transformation Center, a think tank tasked with fixing a direction for the German military, has parallels with recent reports from the U.K. Only last week the Guardian newspaper reported that the British Department of Energy and Climate Change is keeping documents secret that show the British government is far more concerned about an impending supply crisis than it cares to admit.

According to the Guardian, the DECC, the Bank of England and the British Ministry of Defence are working alongside industry representatives to develop a crisis plan to deal with possible shortfalls in energy supply.

According to the German report, there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later." The prediction is consistent with those of well-known scientists who assume global oil production has either already passed its peak or will do so this year.

The political and economic impacts of peak oil on Germany have now been studied for the first time in depth. The German publication Der Spiegel consulted crude oil expert Steffen Bukold, who summarized the findings of the study, which was never intended for publication. Details of the central points can be read at Der Spiegel's Website, but in a nutshell they are:

• Oil will determine a country's power like never before;
• Oil-producing nations can be expected to become more nationalistic;
• A supply crisis would roll back the liberalization of the energy market;
• As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes;
• Peak oil could lead to a "partial or complete failure of markets";
• A global chain reaction of economic crashes would occur;
• The study raises fears for the survival of democracy itself.

Scott Doggett:  is an AutoObserver.com Associate Editor.