I'm not as hopeful, especially since USGS reserve estimates are still mentioned as if they were gospel. It's clear they are not. This TITLE is quite nice, though.
$this->bbcode_second_pass_quote('', '[')b]The End of Cheap Oil? The new cycle of resource nationalism is bad news by Ronald Bailey | July 17, 2007:
Crude oil prices rose above $74 per barrel this week and Goldman Sachs warned that the world could be facing $95 per barrel oil by this fall. Later this week the National Petroleum Council (NPC), which advises the Secretary of the Department of Energy, will release a new report which will find that conventional oil and gas supplies are not likely to keep up with growing global demand over the next 25 years. Of course, supply and demand must balance, so what the Journal is telling us is that the NPC thinks high oil prices are here to stay.
... Has the peak of world oil production arrived? The IEA report says probably not. The IEA notes that "the concept of peak oil production and its timing are emotive subjects which raise intense debate." Nevertheless, the IEA acknowledges that its new five-year forecast suggests that non-OPEC production "appears, for now, to have reached an effective plateau, rather than a peak."
... The resurgence of resource nationalism bears a good bit of the responsibility for the glum oil supply projections-what I've previously called "political peak oil." Seventy-seven percent of world oil reserves are owned by national oil companies. Unfortunately, national oil companies are located in technologically backward countries without access to world-class production expertise and adequate supplies of capital. As the IEA diplomatically puts it, "Often political and social spending needs grow to the point where oil exploration and development investment is compromised, in turn reducing oil and gas exports." And this is happening. Major oil producers such as Venezuela, Mexico, Russia, and Iran are using oil revenues to bribe their people and not investing enough to maintain future oil production.
...
The IEA report notes that the world has once before experienced a political boom/bust cycle in oil production. The previous bout of resource nationalism in the 1970s spawned high oil prices which, in turn, reduced demand and encouraged exploration for new supplies. Eventually, reduced demand and increased supplies combined to dramatically lower prices and which then cut the revenues flowing to oil state regimes. And the cycle continued as cash-strapped oil state regimes in the 1980s anxiously sought to boost their flagging revenues by inviting international oil companies to come back. The good news is that market forces eventually bring oil nationalists to heel. The bad news is that the process is far from pleasant for the world's economy. ... Reason article
