It's fashionable to bash the theory of "peak oil," the idea that world oil demand has already passed or is about to pass world supplies. But doesn't peak oil look something like this?
A central reason that oil supplies are not rising much is that major producers outside the OPEC cartel, like Russia, Mexico and Norway, are showing troubling signs of sluggishness. Unlike OPEC, whose explicit goal is to regulate the supply of oil to keep prices up, these countries are the free traders of the oil market, with every incentive to produce flat-out at a time of high prices.
But for a variety of reasons, including sharply higher drilling costs and a rise of nationalistic policies that restrict foreign investment, these countries are failing to increase their output. They seem stuck at about 50 million barrels of oil a day, or 60 percent of the world’s oil supplies, with few prospects for growth.
“According to normal economic theory, and the history of oil, rising prices have two major effects,” said Fatih Birol, the chief economist at the International Energy Agency in Paris. “They reduce demand and they induce oil supplies. Not this time.”
For most American consumers, the "lede" of the article is buried way down:
The outlook for oil supplies “signals a period of unprecedented scarcity,” Jeff Rubin, an analyst at CIBC World Markets, said last week. Oil prices might exceed $200 a barrel by 2012, he said, a level that would very likely mean $7-a-gallon gasoline in the United States.
I wonder what kind of gas tax "holiday" President McCain will propose in his 2012 re-election campaign. Meanwhile, it's slightly off-topic, but maybe the good people of New Delhi, pictured at top, should look into the idea of reverse commuting.
When is great America going to wake up. All you need to do is go to www.life after the oil crash.com. France is producing cars that will do 100 mph. Fokes, they run on compressed air. Cost to operate. $o.oo Cost to buy $16,000.00. A word to the wise is sufficent!!!— johntvalentine
Peak oil is the concept that the supply has peaked, not that demand > supply. JohnT - instead of free compresed air travel, I recommend you teleport yourself like they do on StarTrek. It's free (did you ever see Captain Kirk have to pay for it?), and it's faster.— Mr. Smith
"Peak oil is the concept that the supply has peaked, not that demand > supply."...............How astute. Now, what would happen if supply peaks while demand is still high? You have Will's point.
As soon a the libs get over their fear of nuclear power, we can get on with our lives.— jmc- Great shot. I think real peak oil (or the time in which we realize it has already passed) looks more like the vacant lanes in the left half of the image. I think McCain may be on the right track here with his gasoline tax holiday, but lets get even more aggressive. How about if during the summer, we pay all drivers a federally funded rebate equivilant ot $2/gallon. Just to get America rally commttted to teh idea, we could raise the gas rebate to $3/gallon if the applicant can prove the gas was used in a vehicle that attains less than 15 mpg, and that the car was driven solo. THAT should solve the problem.— Eos Solar
Comment removed.- Comment removed.
- "As soon a the libs get over their fear of nuclear power, we can get on with our lives." JMC -- I agree with you. Yes, nuclear power has significant risk (remember Chernobyl?) but I'd take that risk -- and a huge reduction in greenhouse gases -- over the warfare, famine and chaos of a worst-case peak oil scenario.— will
- Actually, Obama just relaized its ashiny object for the public but accomplishes nothing. Any idiot can lower taxes. Here's an analysis of how the gas tax holiday would only save us a few cents at the pump. blog.washingtonpost.com/fact-checker/2008/04/a_holiday_from_gas_prices.html— RG
- We have already reached/passed peak oil. http://www.theoildrum.com/tag/update Read Twilight in the Desert. It came out years ago...when we could have done something.— Wolfgang
- Side note....The Saudis have been skewering the actual numbers of their reserves for years now. There is no totally accurate number that shows how much oil is actually left. The fact that the Saudis, a normally proud people, would skewer the numbers doesn't really give me much confidence that the numbers are going to show much.— Wolfgang
- Comment removed.
- I don't trust anybody's estimate of reserves. The fact is the day WILL come that peak oil is upon us, and we go on bickering and name calling like we assume out children (or maybe even us) will just snap their fingers and solve the problem. By that time, Our kids will face $70 trillion in liabilities, a true oil crisis and the more extensive effects of global warming. If you guys were really conservatives you would be accepting the responsibility that we have to our descendants.— SteveMG
- No, b.atk, the idiot is in office runnign up huge deficits and ballooning the national debt because of his precious tax cuts. Said tax cuts probably would have worked if he cut spending, but that darn war was just too enticing! You guys a stain on the legacy of fiscal conservatives.— RG
- Even Hillary is smart enough to see that opposing that one is a complete loser. Classic. b.at(ch) can't refute RG's comments that the gas tax holiday would be a bad policy - and proves once again that he thinks a candidate should base decisions purely on the basis of what's polically popular. Hopefully, Obama is a different kind of politician and hopefully, America is ready for that kind of change.— Talking point sleuth
Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
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