ASPO-USA Conference Takeaways

Here’s what I included as an off-topic comment I put in my weekly report at my not-related-to-investing-or-energy day job to try to give some of the people I work with a bit of a wake-up call:

“Off topic: I attended the Peak Oil conference downtown last week. Here’s the key results:

• Peak oil is proceeding right on schedule with growing oil supply/demand tightness leading up to the Peak around 2015.
• Expect the USA to have to get along with between 20% and 50% less oil by 2020.
• Expect the price of oil to continue to limit economic activity, especially in the OECD (including USA) resulting in much slower or no economic growth in the OECD.
• Expect ordinary investment vehicles (stocks and bonds) to produce negligible to negative real returns with great volatility.
• The entire financial system requires exponential growth (to pay the interest on debt). As Peak Oil blocks the possibility of continued exponential growth at prior rates expect either a complete financial system collapse or significant money printing injected straight into big finance to simulate exponential growth.“

I think it summarizes my honest appraisal of the situation at hand. My overall reaction to the conference was:

• The guys bringing empirical data and analysis (Jeffrey Brown, Kjell Aleklett, Chris Skrebowski, Charlie Maxwell…) are what primarily give the conference credibility and value.
• The top “what does it mean” analysts (Jeff Rubin, Jeffrey Hirsh, Chris Martenson) add a lot of value and are responsible for the key insight of what Peak Oil means for the world and OECD economy.
• I’m really disappointed that the only thing to show up since last year that has a significant chance of changing the Peak Oil timetable (and a small chance of changing the whole story) was not addressed. The use of horizontal drilling and frac technology to extract Shale oil could be significant but nobody at the conference had any real insight on that. I guess anybody who does is out there buying leases or drilling for oil and doesn’t have the time to brief the rest of us.
• The broadening of Peak Oil to Peak Everything (and the alignment with the green sustainability movement), in my view, dilutes the Peak Oil message and credibility and doesn’t provide me much value. I expect this statement will provoke some negative comments.

I expect that this is my last post specifically about the conference so those of you who found my website specifically for the Peak Oil commentary can tune out at this point.

World Of Wall Street