Our world is at a turning point, and how we choose to act in the next few years will determine the fate of many generations to come. I’m referring to the looming global oil crisis, and its inevitable effects. Oil is a tremendous source of energy, it makes economic activity possible and affords the average person of today a standard of living far beyond that of the wealthiest elites just a few generations ago.

Petroleum and other hydrocarbon fuels have freed us from toil and manual labor, transforming our daily lives in the process. It would almost be impossible to exaggerate our dependence on petroleum. It powers the plows in our fields, it brings our food to us from an average distance of 1,200 miles; it takes us to work and back; its by-products are converted into pharmaceuticals and much more.

Unfortunately, the future of world oil production is dubious. There is only so much oil in the ground and most of it has already been discovered. It is for this reason that dangerous projects like the deepwater horizon well in the gulf of Mexico are being pursued. All of the low hanging fruit has been cleared, and we are frantically seeking ways to replace production from declining wells, many of which have been in production for more than 50 years.

We consume four barrels of oil for every one that we find, and that disparity is widening. The world consumes about 81 million barrels of oil a day, and that consumption – fueled by giants like China and India – is growing every year. The common misconception is that the problems will begin when we run out of oil.

Simply divide the remaining oil, roughly 1.2 trillion barrels, by our current rate of consumption, and 40 years are left until we use the last drop. This formula is flawed for two reasons. First, it fails to take into account the fact that world demand for oil is growing. The second fallacy is that it assumes that it is possible to extract oil at the same rate until a given well is pumped dry. Under normal conditions, production from an oil well follows a bell-like curve. There is a peak production point on the curve and from there, the rate of extraction falls to zero – incapable of reaching its previous high. Entire regions follow the same pattern, and it is a near certainty that the world will as well.

World production of conventional oil peaked in 2005. Since then, unconventional sources, like offshore drilling, coupled with a downturn in demand due to the recession have forestalled the inevitable gap between supply and demand.

What does a decline in the availability of oil mean for us? Quite simply, further economic growth will not be possible, and we will start to see the global economy shrink and become more localized. Without an abundance of oil to manufacture pesticides and fertilizers, food production will plummet. Economic downturns that will make the recent crisis seem like a walk in the park are inevitable. This isn’t a rosy picture and, unfortunately, it isn’t even the half of it, but there are some things we can do to cushion the fall. On an individual level, we would be wise to make economic decisions based upon limited access to oil and gasoline in the future. Minimizing commutes and excessive driving as well as growing some of our own food (and buying locally) are a step in the right direction.