Actuary Explains How An Oil Supply Crisis Could Bring Down The Global Economy

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People don't talk much about peak oil these days, now that the U.S. is enjoying a shale boom and crude oil prices are down about 30% from the 2008 peak.

Yet world oil production has basically stalled, with prices still high and emerging market demand rising, meaning the risk of a major energy crisis is still out there.

Actuary Gail Tverberg has a leading voice in the peak oil camp for years, notably editing The Oil Drum. She explained the risks of an energy crisis in an recent presentation at the Casualty Actuarial Society In Focus: Elephants in the Room conference.

In short, oil supply limits could suppress growth from here on out, moving the world from the stagflation era to 20-50 years of crisis. She advises other actuaries that "financial models in general are wrong" and "failure of financial institutions is likely." The only alternative she sees is the discovery of a "miraculous cheap new energy" - and alternatives and nuclear have a long way to go.