Peak Oil Delayed Again?

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Three oil companies announced a significant find of a large new oil field (between 3 and 15 billion barrels) in the Gulf of Mexico yesterday. This is exactly the kind of discovery and technological tour de force that the US Geological Survey's 2000 World Oil and Gas Assessement suggested will delay any global peak in oil production until at least after 2030. To wit:

—As drilling and production within discovered fields progresses, new pools or reservoirs are found that were not previously known.
— Advances in exploration technology make it possible to identify new targets within existing fields.
— Advances in drilling technology make it possible to recover oil, and gas not previously considered recoverable in the initial reserve estimates.
— Enhanced oil recovery techniques increase the recovery factor for oil and thereby increase the reserves within existing fields.

Of course, political factors (say, instability or orneriness in Iran and Venezuela) could cause a temporary oil crisis tomorrow. For more detail on why peak oil is at least a generation away see my Reason article "Peak Oil Panic."

NEXT: Permission to Speak Freely

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  1. At the most optimistic — 15 billion barrels — that will add around 2 years to US supplies at 2004 consumption (20 million bbls/day).

    It is also very, very deep (under 7,000 feet of water and 20,000+ feet of seabed), making it difficult and expensive to get to. Peak oil may be postponed, but it’s not going to keep the prices down.

  2. moonbiter: Actually, the International Energy Agency and the private firm Cambridge Energy Research Associates project that prices will drift down about $35 to $40 per barrel over the next five years or so. Higher prices bring on new supplies and reduce consumption which tend to lower prices eventually.

  3. Left unsaid is thatin the USGS report, you will learn that ‘recoverable resources’ are economically defined, and that whenever prices rise, reserves of economically unrecoverale oil- which is what this deeep field was at$20 a barrel,automatically rise .

    Since recent months have seen crude prices per gallon higher that the per barrel price when Ron was born, posterity may not rejoice at the excellent prospect of perpetual reserve inflation, nor see much oil flowing downhil to consumers from the imaginary extennsion of Hubbert’s peak into the economic stratosphere.

    When the price of peanut oil looks like peanuts , peanut oil will be pursued.

  4. RS: Good to hear from you. Of course, one of the points you left unsaid is that energy is a declining share of our GDP and of people’s incomes. We produce more value with less energy. So even if prices stall at a new plateau of $40 per barrel it will not much affect how Americans and other Westerners live their lives–at least for another generation.

  5. Next year the prices are supposed to be in the $70 range, and will fall off to the $40 range in 2008 and beyond if the Middle East achieves stability. Is this an accurate clarification?

  6. I always thought peak oil was more about cheap oil than total amount of oil.

    But I never followed it that much.

  7. Hi Ron;

    Should you care to look or link, I sarted a Blog last week-

    http://adamant.typepad.com/seitz/

    As to Reserves and Resorces, I vividly recall the hard selling of oil and gas leases in the Anandarko in ‘energy crisis’ days on the grounds that one hunderd dollar oil would one day pervail- a lot of the pricey formations have been known since the 1970’s and I suspect this one is among those that paid for a lot of impact geophysics research back when Xchulub was news

  8. The whole ‘peak oil’ argument hinges on the notion that there will never be technological change which renders the oil industry obsolete.

    While I am aware of no energy source which has comparable versatility and portability, the idea that nothing can ever replace oil is nonsense.

  9. one of the points you left unsaid is that energy is a declining share of our GDP and of people’s incomes. We produce more value with less energy. So even if prices stall at a new plateau of $40 per barrel it will not much affect how Americans and other Westerners live their lives

    No, oil prices stalling at just over half of what they are now won’t cause problems. It would be wonderful, economically, if that happened. But as moonbiter pointed out, this discovery isn’t that much oil compared to how much the world uses. Nobody who believes in Peak Oil (myself included) says that the oil is absolutely gone; it’s that the price will get high enough to damage an economy and society dependent on a steady supply of cheap oil. If these were still the days when the US was the only major consumer of oil in the world, that might not matter. But China and India are waking up and consuming more, too, and the higher prices of the last few years have done nothing to quell their demand.

    Supergiant fields like the Saudi’s Ghawar and Mexico’s Cantarell are in decline, and a field with between 3 and 15 billion barrels is supposed to make up the difference? That’s like a guy who needs $100K a yar to maintain his lifestyle saying “I know I’m losing my job next year, but so what? I just landed a freelance gig that’ll pay me $500 a week for the next year. And I discovered a cache of stuff in Grandma’s attic that I can sell on eBay for a few grand. And don’t forget the money I can save using coupons to buy groceries! No, no need to even consider the possibility that I need to scale back a little.”

  10. The whole ‘peak oil’ argument hinges on the notion that there will never be technological change which renders the oil industry obsolete.

    For me, it hinges on “there WILL one day be technology which renders oil obsolete, but it looks unlikely that we’ll discover it and switch over to it in time to avoid serious economic problems.”

    I’m quite certain our great-grandchildren will all be fine. But I’m not worried about them–I’m worried about me and the people here now. And I’m not worried about the state of our economy in the year 2106; I’m worried about now through 2050–the time I’m likely to be here, in other words.

  11. The new discovery isn’t supposed to make up the difference, it’s just supposed to push back the peak a few years.
    On the topic of peak oil, I cannot see how it would be at all possible to predict peak oil. Hubbert’s theory says that the peak will “tend to coincide” with the midpoint of depletion of the world’s entire supply. this strikes me as bullshit. Anyone care to explain?

  12. Jennifer

    I think that the only thing that will cause a changeover will be a crisis.

    Oil is convenient, portable and cheap.

    [“Cheap” in the sense of the amount of time each of us needs to work to purchase the oil to get the benefits we want.]

    I don’t expect a ‘miracle technology’ like an under 100 kg fusion reactor which fits where your gas tank used to go. I do expect gradual increments in several technologies which will, at certain price levels, become competitive with oil.

    The changeover costs will stall the replacement of oil until the benefits exceed the costs, probably when the intersection of the supply and demand curves moves upward sharply during some ‘crisis’.

    Without government interference [Now there’s a big IF.], I think the changeover, when it comes, will probably happen in a 5 to 10 year time frame.
    [NOTE: I said ‘when it comes’ not ‘in the next 5 to 10 years’.]

    Will there be economic disruption? Yes, but the less the government does to ‘mitigate the effects’, the sooner we’ll be through it.

  13. I worry that after Peak Oil, there may not be enough horses to go around.
    Peak Oil will be a picnic compared with Peak Horse.

  14. Without government interference [Now there’s a big IF.], I think the changeover, when it comes, will probably happen in a 5 to 10 year time frame.

    I guarantee that whatever economic problems Peak Oil will cause, the government will make them worse. Guaranteed. The sun will rise in the west tomorrow, 20-year-old women will continue to be viewed as more attractive than 60-year-old women, and the government will fuck up the economy when oil starts to hurt us. Rationing? Price controls? Tax breaks to help people with long commutes? Anything to hide the fact “we can’t keep burning so much oil, and we’d damn well better make some changes to reflect that.”

    Besides, what Congressman from a suburban district will tell his constituents, “Living in a suburb 40 miles from your job may not be feasible much longer, so you’d better move closer to where you work and cut down on your car dependence?”

    On the topic of peak oil, I cannot see how it would be at all possible to predict peak oil. Hubbert’s theory says that the peak will “tend to coincide” with the midpoint of depletion of the world’s entire supply. this strikes me as bullshit. Anyone care to explain?

    Here’s a super-simplifed explanation: suppose that every oil field is exactly alike, and every untapped oil field contains 100 barrels. The untapped field has so much internal pressure that extracting the oil is super-easy: just pull a Jed Clampett, poke a hole in the ground and watch the crude come gushing out.

    Now you’re down to 90 barrels. Pressure’s gone down. It takes more effort (read: energy) to get the oil out, but still, you make fine profits.

    The more oil comes out the more effort it takes to get what remains. Once you’re down to 60 or 70 barrels, then you have to start doing what the Saudis are doing at Ghawar: pump air or water into your field, to bring the pressure up enough to get the oil out. (At Ghawar, the Saudis started by pumping freshwater, but they have little of that to spare. Now they’re using salt water, which is abundant but also can mess up your field. I’ve read that what they’re pumping out now is basically pure salt water polluted with a bit of petroleum, a definite sign of a field in decline. And don’t forget, they were incapable of increasing production to make up the shortfall after Katrina last year.)

    Also, with current technology, we cannot suck an oil field completely dry: one that 100-barrel field goes down to 40 or 50 barrels the remaining oil can’t be had. Or rather, it can, but it would take more energy to get it out that the oil itself will give. It’s like spending two dollars to earn one–no point to it.

    In the 1950s, when the US was the Saudi Arabia of the world and producing more oil than anyone else, Hubbert looked at extraction and consumption rates and predicted that oil production in the lower 48 states would peak around 1970. And everybody scoffed at that, but it turned out he was right.

    Other people applying Hubbert’s technique to the rest of the world predicted a worldwide peak around 2000. Some say he was right, which is why oil prices have been skyrocketing since then. Others say he was wrong, but that’s because he couldn’t predict the 1973 gas crisis, which resulted in a drop in consumption, thus driving back the peak year a bit. In the long run, it won’t matter if oil peaks this year or ten years from now, if everybody is going to say “Well, we’ve discovered a new field that can satisfy the world’s appetite for oil for another two years, so hooray for the status quo which need not be changed!”

  15. Uh, make that “the sun will rise in the EAST.” I caught the mistake and tried to fix it, but we all know the posting problems we’ve had due to the Reason staff’s appalling blindness to the problems of Peak Server.

  16. Given the lunatic lengths gone to to screw w/ Cuba over the years, this “discovery” got me curious. Clearly, it wasnt “discovered” yesterday, but it might only be recently practicle to go after, with what must be truly innovitive techniques & equipment.
    Given that Cuba had “proven” I believe is the term, vast oil patches offshore, but deep, and that both Indian & British groups were saying they would be going after it, might going after these extremely deep “new” patches be a way to soak up all that capital, rare equipment, rarer expertise? I can imagine the crackpot lengths gone to to keep Cuban oil out of the US, as they were able to keep out anything containing Cuban nickle….
    Or not, convincingly?
    Very informative thread, thank you ladies & gents

  17. Isn’t the current rate of production measurable? How can there be a debate on whether or not we’ve allready passed the peak? If we are producing at a higher rate now then we were in 2000 then, by definition, we are not over the peak.
    It seems to me that the pivotal question is how fast the rate of production will decline once we pass the peak. If it’s a slow process then gradually increasing prices will stimulate replacement technologies. If it happens too fast then there won’t be time for new technologies to gain footing, and the economy will suffer.
    btw jennifer, i still don’t buy that the peak in any way coincides with the midpoint in depletion of the total supply. Sounds made up. basically your saying that the first half of a field is easy /economical to extract and the second half isn’t so the production peak happens at the halfway point?

  18. I’m with Jennifer on this. Ron- although I highly respect your opinions on just about every other subject, I disagree with your rosy views on peak oil. You’re a smart guy- but hardly an oil expert (me neither). Remember earlier this year when one of your predictions for 2006 was that oil would fall below 50 dollars a barrel? I also disagree with the “doomsters” like Matt Savinar (lifeaftertheoilcrash.net). Both of you are on the extremes of this issue. And like most things, the truth usually is in the middle somewhere. For instance, Ron was quick to reference the “huge” oil “find” in the globe and mail article but ignored all the realities associated with this “find”. Like Jennifer pointed out, 3-15 billion barrels is not that much in the grand scheme of things. And pay attention to the range they give: between 3 and 15? To me that doesn’t sound like they’re that sure of themselves. Heck- I wish age worked that way then I’d be between 29 and 41 years old. This article performs a “reality check” on this “massive” find: link. So don’t shoot off the fireworks just yet- wait ’til the oil actually starts flowing.

    And let me clarify, because no matter how often you say it people still don’t get it. “Peak Oil” means the end of CHEAP oil – not ALL oil. It doesn’t mark the END of oil supply – it marks the MIDDLE. For a good site that looks at the issue objectively (I think so) and focuses on the science and “real data” rather than pie-in-the-sky government/industry claims and hype- check at The Oil Drum.

    Basically, it bugs me when anyone on either extreme of this issue sticks out their chest and emphatically claim that they “know” exactly when peak oil will occur and we’re either all gonna die or we have nothing to worry about. Mr. Bailey falls with the latter crowd on this one. While I’m one who is proud to say that I have no clue how things will pan out- but I’m pretty sure that it’s not either of these 2 extremes.

  19. There is no question that we can go about our ways forever, the supply of oil in the earth is completely infinite.

  20. Ed said, “I worry that after Peak Oil, there may not be enough horses to go around.
    Peak Oil will be a picnic compared with Peak Horse.”

    Not to mention the accompanying, unavoidable Peak Horse Puckey.

    Really, as environmentally bad as the internal combustion engine automobile may be, it allowed for a quantum leap in sanitation, especially in urban areas. This is not a small benefit, and anyone who doesn’t consider it significant is not living in the real world.

  21. I think it is very interesting how the whole “peak oil” doomsayers are always on the left.

    Like Matt Simmons, the oilman who’s such a left-winger that he’s a personal friend of G.W. Bush and was part of Bush and Cheney’s energy commission a few years back. But strawman ad hominems are exactly what I expect from you.

    basically your saying that the first half of a field is easy /economical to extract and the second half isn’t so the production peak happens at the halfway point?

    Pretty much. Peak Oil does NOT say we’re running out of oil and there won’t be any left; it says we’re running out of cheap oil. Right now it’s so cheap that it’s common for an individual American to burn four or five gallons of gas a day just to get to work and back. And they can do that, because even now, gas doesn’t really cost that much (compared to the sheer amount of energy you get from it.) My concern is that we’ll soon see a point where we can no longer afford our high-gas-consumption lifestyle, and the switch to a lower-gas-consumption economy will seriously hurt us, unless somebody comes out with a miracle invention very, very soon.

    It seems to me that the pivotal question is how fast the rate of production will decline once we pass the peak

    True. Standard economic theory says that rising prices will lower demand, but both prices and worldwide demand have increased these past few years. And to a certain extent, demand is inelastic–if you live 40 miles from your job, you have no choice but to buy 80 miles’ worth of gas per day until you can either find a job closer to home, or a home closer to work. One person making such a change is no big deal. But enough people making these changes–and making them because they are economically forced to, not because they simply chose to do so–will hurt.

    Some say the decline will be gradual enough that we can adjust to it; others say it will be like falling off a cliff. One irony: every new and improved method we can think of to increase production (which is to say, increase the extraction rate of a given field) will make the decline that much more severe when it happens.

    In Oman, for example, production dropped almost nine percent just from 2002 to 2003. But Oman only produced a tiny fraction of world supply; their decline, we can absorb. The Saudis’ decline, not so much. North Sea, Prudhow Bay and Cantarell are all in decline as admitted by their owners; the Saudis say Ghawar is fine but their production methods suggest this is not true.

  22. Jennifer,

    I guess I wouldn’t have such a desire to make fun of you, if you didn’t put this stuff up with such glee. Why do you hate consumption so much? Why is it going to make you so happy if you are right and we all end up having the same standard of living we did in say 1700?

    I guess at heart, I am an optimist and man has always adapted and overcame in the past, and I believe he will do the same if and when he ever runs out of oil. You seem to think that would be a bad thing. I don’t really know why. But, it nonetheless makes you a very easy target for lampooning.

  23. James A Merritt

    Very good point.

    When the main form of transport was horsepower, tetanus was endemic. Now it is scarcely known.

    Nostalgia is always rose colored.

  24. They’d run out of oxygen to burn it with before they could ever run out of oil.

  25. “Really, as environmentally bad as the internal combustion engine automobile may be, it allowed for a quantum leap in sanitation, especially in urban areas. This is not a small benefit, and anyone who doesn’t consider it significant is not living in the real world.”

    There are lots and lots of people out there who claim that the car was the worst invention ever. In fact, a lot of school science books make this claim. But, no one ever accused environmentalists of living in the real world. For them any advance in technology or standard of living has only downsides never up sides.

  26. One irony: every new and improved method we can think of to increase production (which is to say, increase the extraction rate of a given field) will make the decline that much more severe when it happens.

    This is not correct, by simple application of the law of large numbers. More variance in ways to get oil and more variance in the costs of these ways only serves to smooth the depletion of the resource.

    And this mathematical result is key to the argument against the notion of Peak Oil’s being a discrete and destructive occurrence. Any supply shortage will drive the price up into a regime where previously unaffordable reserves become affordable and stall the price rise.

    At some point the price will enter a regime where alternatives to oil become affordable at the margins, and that’s pretty much the highest the price of oil will ever get. Any higher price will drive new consumers to the new technology.

  27. PRUDHOE Bay. Dammit.

    Why do you hate consumption so much? Why is it going to make you so happy if you are right and we all end up having the same standard of living we did in say 1700?

    I don’t hate consumption; I’m merely suggesting we won’t be able to maintain our current level much longer. Same way I don’t hate the idea of spending a thousand dollars on luxury items this month, but I know I couldn’t keep that up month after month and expect to be in good financial shape when I’m older.

    Also, I’m not saying we’ll regress to 1700. What straw creature put that idea into your head?

  28. John will not be convinced.

  29. Peak oil panic depends on the premise “if nothing changes …” and concludes “we’ll be screwed”.

    Well duh.

    nmg

  30. Why should John be convinced?

    I must say, the arguments supporting Peak Oil sound a hell of a lot like the arguments supporting Peak Immigration — that there is some point close at hand when marginal forces of supply and demand will fail and society will be thrown into turmoil.

    It is interesting that John and Jennifer take exactly opposite positions on Peak Oil and Peak Immigration — each one believing in the laws of economics and the powers of margins in one case while disbelieving them in the other.

    Nonetheless, nothing on this thread should convince anyone that Peak Oil is worrisome.

  31. It is interesting that John and Jennifer take exactly opposite positions on Peak Oil and Peak Immigration — each one believing in the laws of economics and the powers of margins in one case while disbelieving them in the other.

    Actually no–John wants the government to Do Something about immigration; I am calling for no government action, and furthermore even if the government did manage to have a good idea (like, ‘let’s encourage mass transit!’) they’d still manage to screw it up (like, ‘let’s build a $250 million subway system connecting a small Alaskan island, population 50, with the mainland!’)

    I am simply suggesting that a steep price increase in an important natural resource is likely to happen soon, and that this increase is likely to be severe enough to cause bad problems.

  32. Actually no–John wants the government to Do Something about immigration; I am calling for no government action, …

    Fair enough. But an authentic libertarian who believed the government has neither the authority nor the competence to restrict people’s rights to migrate and work anywhere they want — but did not trust that real-world economic laws would moderate the potential influx — might be worried about what this unlimited immigration will do the society.

    They may even say something like:

    I am simply suggesting that a steep increase in immigration is likely to happen soon, and that this increase is likely to be severe enough to cause bad problems.

  33. MikeP, your comparison is saying that John’s belief that population increases might cause problems (especially if the population speaks the wrong language) and my belief that price increases in natural resources might cause problems are exactly the same. I don’t think this is an accurate comparison to make between two completely different issues. You may as well say that an opinion on global warming has something to do with an opinion on the drug war: no, these are two totally different things.

  34. My claim is not that “X might be a problem” and “Y might be a problem” means X and Y are comparable.

    I claim that the price of oil and the flow of immigrants are the same in that both are moderated by well known and well tested economic laws. They have been held in check in the past by these economic laws. They will be held in check in the future by these economic laws. Believing that either of them will depart the regime where those laws apply requires an extraordinary argument that I have yet to see in either case.

    Global warming is not yet moderated by the market, and the drug war is explicitly a nonmarket process, so I agree that these are not comparable in the same way.

  35. In a free market and barring a catastrophic event (eg: A 9.5 earthquake destroying the production infrastructure of the Middle East), I would say that the Peak Oil production point would pass relatively uneventfully. There would be a gradual falloff in production with upward pressure on prices as the equilibrium point moves up the supply curve.

    However, with governments getting involved, there are likely to be wars over the oil reserves. That will destroy infrastructure and trigger a crisis.

    The most likely war scenario is that one of the major Middle Eastern producers can no longer produce sufficient volume to keep their income levels up, even at higher prices. With insufficient funds to either buy off their subjects or pay for a military to suppress them, the government is overthrown by a militant group of one sort or another, followed by an ever-expanding series of civil and international wars.

    I think Jennifer is merely pointing out the possibility of a fast-developing crisis, which is certainly possible.

    I don’t think it is fair to say she is advocating government interference in the oil market, even though arguments similar to hers have been used to justify statist intervention.

  36. Aaresen –

    Not to speak for Mike P, whom I agree with, but I don’t believe his point was about the specific remedy either John or Jennifer might chose to resolve their economic quandries; but that they both are arguring that well tested economic barriers aren’t good enough to prevent some catastrophy.

    Wether it be from too much labor or too little oil.

    I think.

  37. “I claim that the price of oil and the flow of immigrants are the same in that both are moderated by well known and well tested economic laws. ”

    You say that like either game cant be rigged. In the case of oil, consider. The Texas oil fields were shut down for the then stated reason , which sounded reasonable enough, that oil that was being lifted for $15 a bbl could no longer be profitably lifted for $12.
    Now that profitable to lift $15 oil is going for $67. Interests that profit from that are the same interests that have “bungeled” the Iraq war to the point the worlds second largest oil patch is pumping zip, and is now blustering about bombing the crap out of another huge oil supplier, Iran. What well known & well tested economic law are you talking about here?
    Damn near free labor, crashing across the border: The US has, since the 20’s, backed every murderous satrapy in Central America, & expended billions to crush rebellions by the wretched peasants there. Folks finally got the message, & now come here to work, as honest people cant survive in these damn near feudal oligarchies. What well known & tested economic law are you talking about here?
    In either case, its not “natural”, as in our imaginary friend, the Invisible Hand. Its a rigged game. The only thing “natural” about it is some folks are murderous scumbags, & rise to positions of power.

  38. In either case, its not “natural”, as in our imaginary friend, the Invisible Hand. Its a rigged game. The only thing “natural” about it is some folks are murderous scumbags, & rise to positions of power.

    While I think most of the effects you find intentional are accidents of governmental incompetence, I agree with you more than you apparently think. Nonetheless, I don’t think these effects yet dominate the market in either oil or labor.

    My “well known and tested economic laws” argument indeed rests on the processes being ruled by the market and not gamed by governments. I am a libertarian. Duh.

  39. Incidentally, MUTT,

    In 2003 were you marching around with a sign that said “No blood for oil” or a sign that said “Bush and Cheney’s pals are small domestic oil producers in Texas and Wyoming and nothing would enrich them more than instability in the Middle East”?

  40. No, I was marching around pointing out Cheney, Rumfeld et al were allies, bankrollers, & apologists of Hussien, and maybe should be behind bars.
    It didnt occur to me til , jeez, only a year ago, or less, that maybe PUMPING Iraqs oil wasnt a goal, but keeping it in the ground, thus raising the price everywhere else- including fields owned/controlled by the same interests that own/control this current nitwit war.
    Capisce?
    i also was opposed to using US troops in a public war for private profit, but maybe thats just me……
    And, since these things ARE gamed by governments, are you a “faith based” capital L libertarian?
    Dont take this as rudeness, Mike, I appreciate your response.

  41. SixSigma,

    Indeed, you got my point exactly right. I was not arguing remedies or people’s positions on remedies. I was arguing that there are very good reasons in both cases to think that there is no problem to remedy, and that those reasons in both cases are quite similar…

  42. Oil is a scarce resource. You aren’t going to extract oil at a cost of $20 to sell at $60 if that same oil will sell at $90 next year. Many doomsayers don’t seem to understand this.

    Do you know who would love a peak oil panic? The oil companies. It means there’s a lot more money to be made.

  43. I realized in 2003 that the “No blood for oil” marchers were idiots: That there is nothing like a war in an oil region to upset applecarts and make things hard for oil producers. It wasn’t until probably a year ago that the same thing occurred to me as it did to you, MUTT: The multinationals like BP and Shell are not Bush and Cheney’s buds; the little domestic producers are. And they are just about the only people who gain from a war in the Middle East.

    Where we differ is that I do not believe that the government engaged in such a conspiracy. But if I grant maybe a 3% chance that the Iraq War was intentionally run to enrich Friends of the Administration, I’ll give your other consipracy theory a 0.3% chance. An intentional multi-administration manipulation of a dozen foreign nations in order to provide cheaper labor to California fruit growers and Vermont cheese makers is beyond ridiculous.

    Governments rarely try to game markets, and they even more rarely succeed. Why would they? They are the freaking government! They simply pass laws when the market is not doing what they want.

  44. I’ll give your other consipracy theory a 0.3% chance. An intentional multi-administration manipulation of a dozen foreign nations in order to provide cheaper labor to ….

    The “conspiracy theory” is called “the history of the region”.
    Various US Gvts have spent billions (under that creepy flying monkey RR, 6 BILLION to El Salvador alone, a country the size of Mass. ) since the twenties to install, or prop up, various kleptocracies in Latin America. You might read the various bios of Marine Maj General Smedley Butler, who commanded any number of military invasions, and arranged for fixed elections in the region, he writes quite openly about it. At the beginning, it simply guaranteed profits to various combinations- Brown Brothers Bank, United Fruit, Anaconda Copper- who kept various quislings & local oligarchs in power. In the last 25 years, a consequence of this open, clear policy by the US , as an agent of what TR called “malfactors of great wealth” has been a tidal wave of people fleeing these “democracies” so much US treasure & blood has been spilled (never mind the local blood- but experience tells me that dont count for much) to “guarantee”.
    Not a “conspiracy”. Just history.
    Like I said, its a rigged game, a fraud, like horse racing & the stock market. A con, a scam: and damn expensive for a lot of people. And damn profitable for a few….

  45. There is no question that we can go about our ways forever, the supply of oil in the earth is completely infinite.

    There are lots and lots of people out there who claim that the car was the worst invention ever. In fact, a lot of school science books make this claim.

    Got any support for these “wild-ass assertions,” cowboy?

  46. “: The multinationals like BP and Shell are not Bush and Cheney’s buds; the little domestic producers are. ”
    And dosnt rocketing oil prices raise all yachts, the three hundred footers as well as the 100 footers?

  47. In the last 25 years, a consequence of this open, clear policy by the US , as an agent of what TR called “malfactors of great wealth” has been a tidal wave of people fleeing these “democracies”…

    Unintentional “consequences” are not “gaming”. Collateral effects that surprise everyone are easily reconciled with market theories and represent no abrogation, domination, or control of the market.

    The US installed and supported governments friendly to the US and US corporate interests. Shockingly to few, those installed royally sucked at actually running their own countries. People ended up leaving to find better lives. There is nothing in this story that argues that immigration is gamed or that the US restricting immigration is better than the US liberalizing immigration and leaving it to the market.

    And dosnt rocketing oil prices raise all yachts, the three hundred footers as well as the 100 footers?

    Not if your yacht is moored in Basra… Or even in Nigeria or Chad, or any number of places that can take advantage of uncertainties in oil production.

  48. Since when are “the free market will balance things out in the end” and “there will be a soft landing” synonymous? The free market can balance thngs out and there could be a severe short term global recession and the free market can balance out. The free market can be a harsh mistress. Effective, but harsh.

  49. What a lot of people here seem to be missing is the difficulty and expense that is going to be involved in exploiting this discovery.

    More than a half a dozen world records for test equipment pressure, depth, and duration in deepwater were set during the Jack well test. For example, the perforating guns were fired at world record depths and pressures. Additionally, the test tree and other drill stem test tools set world records, helping Chevron and co-owners conduct the deepest extended drill stem test in deepwater Gulf of Mexico history.

    Ask yourself this question: Why would a business concern like Chevron et al look in such a difficult to exploit place for oil if:

    1. prices were going to significantly come down in the near future,
    2. they could just ramp up production in existing fields.

    Why search for fields that are so difficult to get to if production isn’t close to being tapped out in easier-to-get-to areas?

  50. Since when are “the free market will balance things out in the end” and “there will be a soft landing” synonymous? The free market can balance thngs out and there could be a severe short term global recession and the free market can balance out. The free market can be a harsh mistress. Effective, but harsh.

    Mo, damn straight. I said this exact thing in a similar thread a while back. I don’t see why some self-proclaimed libertarians don’t get this. I’m betting that it’s likely that peak oil will lead to economic recession on a global scale – but the market will eventually balance things out.. and we’ll be better off in the end. It almost has to happen this way before we will see real *significant* energy-related technological advances and changes in energy consumption habits. It’s not going to be the end of the world nor will it be easy.

    And I like what moonbiter said regarding the huge oil “find”:

    Ask yourself this question: Why would a business concern like Chevron et al look in such a difficult to exploit place for oil if:

    1) prices were going to significantly come down in the near future,
    2) they could just ramp up production in existing fields.

    Why search for fields that are so difficult to get to if production isn’t close to being tapped out in easier-to-get-to areas?

    Exactly. When you get past all the hype and pie-in-the-sky industry/government projections like this, and ask real questions like what moonbiter put forth- you begin to see the reality of what’s going on. Forget what the industry/government tells you- pay attention to the real scientific data and the independent oil analysts, geolgoists, scientists, etc. who actually know something about what they’re talking about and don’t have a vested interest in rosy optimistic forecasts about the future of oil production.

  51. Mo, Ed,

    The difference between “global recession” and what Peak Oil doomsayers claim is like the difference between stubbing your toe and amputating your leg.

    No doubt oil supply issues have caused recessions in the past. No doubt they will cause recessions in the future. Big doubt Peak Oil will bring about the end of the western way of life…

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