Oh Those Peakists
Steady as she goes: Why the world is not about to run out of oil (Economist)
[I]n the words of Exxon Mobil, the oil production peak is unlikely “for decades to come”. Governments may decide to shift away from petroleum because of its nasty geopolitics or its contribution to global warming. But it is wrong to imagine the world's addiction to oil will end soon, as a result of genuine scarcity. As Western oil companies seek to cope with being locked out of the Middle East, the new era of manufactured fuel will further delay the onset of peak production. The irony would be if manufactured fuel also did something far more dramatic—if it served as a bridge to whatever comes beyond the nexus of petrol and the internal combustion engine that for a century has held the world in its grip.
I've just reproduced part of the conclusion, because this debunking of the Hubbert Peakists is worth reading in its entirety.
Posted by Kevin Whited @ 04/26/06 23:00 | Other | Technorati
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Comments
Which is partly why the notion that fact that oil prices are jacked up can be explained purely by reference to supply and demand is asinine. There's no supply problem, and demand hasn't spiked appreciably in the last 3 weeks. Folks, it's a bit more complicated than that (not saying I know why the prices are all jacked up, but at least I know what I don't know).
Posted by TP @ 12:57 on 04/28/06
ugh. grammatical problems there.
Posted by TP @ 12:58 on 04/28/06
You are right TP, it's not just supply and demand, but a LOT of the oil price movement right now is based on supply fears instead of actual supply shortages.
It's a speculative market, that doesn't like when things are not swell in the major oil producing regions of the World.
The Middle East is a mess, Venenzuela isn't much better, offshore is still recovering, and Russia has never been able to get their act together.
Add to that oil companies who are happy to continue to allow the prices to increase artifically and you have a perfect storm.
Oh yeah, and even if we HAD a lot more oil we couldn't refine it anyway.
bummer.
S.
Posted by Sedosi @ 15:35 on 04/28/06
All good points, Sedosi. I'm guessing Kevin might have a *bit* of knowledge on this he could drop, so I'll stop embarrassing myself by revealing my lack of understanding. ;)
Posted by TP @ 16:49 on 04/28/06
Ha, well, I think people who claim to be able to model oil prices with precision are nutty! :) I sure hope nobody from work reads that.
But I think it's safe to say that yes, everything that's been discussed so far (supply, demand, psychology, political and other above-ground risks) has played into the price.
And given the recent rise in precious metal prices (particularly gold), I'm getting more concerned that oil price increases may also be a function of too much growth in the money supply...
Posted by Kevin @ 23:10 on 04/29/06
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