Peak Oil Passnotes: Peak Oil Is Here, Enjoy

One of the reasons the message has found such stony ground on occasions has been the antics of peak oil ‘believers’. We use the word ‘believer’ in brackets because, although peak oil is a reality, the ‘believers’ take it to a whole new faith-based level. Anyone with a whacko axe to grind, be they the 9-11 crowd, the fascist BNP in the U.K., the back to the cave greenies and others have latched onto peak oil as a crutch for their existing views.

The reality of peak oil is in fact closer to that of Christophe de Margerie, with some caveats. Firstly if you produce a lot of oil you have a bigger decline rate. If you have a bigger decline rate you need to find and bring on stream a lot more oil, every year, every month, every week. If the demand for that oil is exacerbated by – for example China – the cost of it rises and so does the cost of extraction.
Those costs mean that long term planning, needed for all but the tiniest oil fields, becomes harder and slower to do. Then of course, on the sidelines, we have all the various vested interests. The banks who own the corporations, the executives who pocket giant sums each year on the back of an expensive commodity and the national oil companies piling up cash of their governments. Few of whom have any interest in producing a glut of oil to bring down the money they make.

Peak oil is a reality. It may take a generation for al the effects to be played out but they will be played out. They will never be solved by current economic thinking, because it was current economic thinking that caused it. Welcome to the peak.

Resource Investor