Its running out!

To quote Matt Damon's character from the movie Syriana, "Its running out and 90% of whats left is in the middle-east. It is a fight to the death". That 90% figure is an exaggeration. It is more like 60-65%, based on who you believe. Doesn't that give you a lot of comfort ?

The Oil supply situation in the world is dire and the Arabs and Persians know this better than we do. Whether Iran impasse gets solved peacefully or not ( evidence overwhelmingly points to a confrontation ), oil is headed higher, much higher. Crude oil inventory may have risen in the US, but it did not rise on a glut of new supply - instead it rose on falling demand, thanks to mild winter weather in most of North America.

I just came across this article titled "Running Out of Oil? History, Technology and Abundance" by Max Schulz - a fellow at Manhattan Institute. Thinking must be too painful for these so called experts. He brushes aside "peak oil" on the basis of how the whistleblowers have been wrong in the past!! Article goes on to say "The good news about this bad news is that, historically, the doomsayers have always been wrong". Coming from an energy expert who served in the upper echelons of our Nations administration, that statement bewilders me. Pinning the future of a nation and the world on a mere hope that some really smart geologists are wrong ?

Mr. Schulz then strikes at "peak oil" as a nonissue on the basis of technological advancement. Oh, we lumpen worry warts, we could never think of that, could we ? Either inadvertantly or by design, he failed to explain why three and a half decades of technological advancement could not reverse the 1971 peak in US oil production.

Abundance - Strike three and peak oil is out. "Questions about energy supply shouldn't be thought of in terms of how much is available, but in terms of how good mankind is at finding and extracting it" says the article. It doesn't surprise me at all, that, these abundance theorists time and again fail to explain, why the peak year for oil discovery was 1965 and not 2005( figure-1). Didn't the high oil prices that lasted for a decade, starting from the early 1970s, provide the incentive for mankind to find these abundant sources ? I will let you answer that question for yourself. Technology sure didn't stop Pemex from announcing that the giant cantarell field has entered an irreversible decline.

Figure-1: Oil discovery from 1930s.source: ASPO

Then there are others who think that the Russian Oil Miracle has put the peak oil theory to rest for good. But the russian energy minister thinks otherwise.

Peak Oil is for real, sooner we accept that fact, better it is for humanity.

Until later,

Oil Shock

© 2006 Oil Shock for TheViewFromThePeak.com