Peak Oil: When You've Got Nothing Important to Do

The original concept of "Peak Oil" relates to a mountain peak. You climb and climb until you reach the peak, then it's downhill all the way. That was the idea behind the pre-Hubbert peak theories and remains the idea in the back of people's minds post-Hubbert. Oil production increases until it can't go up anymore, then it falls and falls and falls -- and then the global economy will crash.

That is the simple, original, and largely sub-conscious version of peak oil. A more "sophisticated" version of peak oil claims that oil will never run out and may not even actually peak, but that the world will run out of "cheap oil", and the more expensive oil will grow too expensive for anyone to use -- and then the global economy will crash.

There is another even more "sophisticated" theory of peak oil that states that there is enough oil sands, oil shale, heavy oils, and potential coal to liquids and gas to liquids to replace all petroleum -- except that it will take too long to tool up for the transition, and petroleum supplies will shrink too quickly -- and then the global economy will crash.

You did catch the punchline for all three theories (and several others quite similar)? The global economy crashes. That seems to be a requirement for any peak oil theory that hopes to get a person's blood pumping hard enough for him to be interested in buying books, tapes, seminar tickets, newsletter subscriptions, and whatever else the peak oil proponent happens to be selling at the time.

Any peak oil theory that fails to include a crashing economy and plenty of blood in the streets almost seems too trivial and superfluous to discuss -- much less argue about. So why is their so much argument about "peak oil" when anyone with a brain should understand that the technology and energy feedstocks are there, if the market absolutely has to turn to them (read carefully)?

An interesting concept of "peak demand" has been circulating recently -- and it has a great deal of logic backing it up. In fact "peak demand" has more logic behind it than even Tony Hayward understands.

The demographics of advanced countries in Europe, East Asia, North America, and Oceania is definitely of an imploding nature. Women are having too few babies to maintain populations -- and with populations depleting faster than energy supplies, demand for fuels will fall across the board. Except perhaps for nuclear, coal, and gas for electric and thermal power plants. It is a question of timing.

Along with falling populations, the advanced nations will begin substituting alternative fuels for petroleum -- slowly at first, then at a dizzyingly accelerating rate sometime near the end of the current decade.

The delusional pseudo-scientific theory of anthropogenic global warming catastrophe has held European, North American, and Australian politicians in thrall for over a decade now, but its props are being kicked out from under it by a resurgence of genuine apolitical climate science. With a release from the absurd quasi-totalitarian restrictions on energy use -- with the repeal of "political peak oil" -- modern economies can phase out their petroleum use in a measured and controlled manner.

Believers in Peak Oil DOOM! have no idea how dependent their theories are on the false theories of carbon catastrophe theory. And they probably never will. Because persons who are drawn to peak oil doom are not really looking for solutions to problems. They are looking for exactly what they have found in their books, newsletters, seminars, tapes, and forums: doom. Any doom will do, but a doom from energy starvation is particularly juicy and bound to cause blood to flow.

Why do so many fall for it, besides having nothing important to do?

...when looking ahead more than four years, almost all oil price forecasts over the past 40 years have been wrong, according to Dr Ole Gunnar Austvik, the head of research at Lillehammer University College in Norway.

As it turns out, the flawed forecasts all predicted upwards price trends, whereas inflation-adjusted oil prices actually fell for two decades from the early 1980s.

It was only over the past decade that a seven-year price rally challenged that. A related question, now that oil prices have crashed and partially rebounded, is whether some of the old forecasts are about to be vindicated, or whether the current period of price volatility will run its course, eventually leaving crude lower.

The perennial popularity of forecasts projecting crude prices rising indefinitely reflects the intuitive appeal of the “Peak Oil” theory, which predicts that global oil production will reach a maximum rate and then inexorably decline.

Everyone can grasp the seductively simple hypothesis, which encapsulates deep-rooted insecurities over energy supply. Surely everyone must understand that oil is a geologically scarce resource that must one day run out. _National

Yes, it is a simple idea, easy to grasp, easy to hold ... and hold ... and hold .... in fact, some people have been holding on for forty or fifty years now and show no sign of tiring. Any day now, you'll see, it's all going to fall apart . . . .

Problem solvers look for ways to solve problems. But doomseekers don't want their doom parties spoiled by anyone or anything. Doom is the one thing giving their lives meaning. Don't dare take that away.

Oil pricing is subject to a wide range of forces. But politics should be placed near the top of every list. We all know where Obama, Pelosi, Boxer, Salazar, etc. fall on the politics of energy. "Let them eat cake!" In other words, we'll make it impossible to burn coal, to drill for domestic oil, to use oil shales or oil sands, or any fossil fuel for that matter. If they can't get by on wind and solar, then too bad. Let them eat cake.

Oynklent Green [OTC:OYNK] has some interesting ideas for turning a bad political situation into a net energy plus. You may want to look into investing in OYNK.