Oil: The party is over

Good. If the oil price rises gradually from 70 to 100 dollars over the next five years, people and governments will start paying serious attention to energy conservation and alternate energy sources (including nuclear energy). The sooner that happens, the less extreme the global warming we will have to contend with as the century progresses. But if the oil price leaps to 100 dollars or more in one swift jump, we will have the mother of all recessions, and then there will be a desperate shortage of funding for developing alternative sources of energy.
A US attack on Iran is not the only threat to oil prices. If the markets should ever collectively decide that “peak oil” is upon us and that the supply of oil is heading for actual decline, the price would soar out of sight overnight. The oil companies and the governments of OPEC reassure us that oil reserves are ample to cover consumption at the current rate of world economic growth for decades to come, but they would be saying that whether it was true or not, and there is reason to suspect that it is not.
Never mind the geology. Just consider the fact that in the years 1985-1990, when OPEC’s declared reserves grew by a massive 300 billion barrels, no major new oilfields were brought into production.

Monday Morning