Friday, April 20, 2012

Peak Oil Persistently Punched and Pummeled

Inflated oil prices continue to drive investment in new exploration and production technologies. Large new oil finds in Africa are causing political repercussions from China to Europe -- where inflated oil prices combined with carbon hysteria and nuclear phobia are hurting several economies.
The really bad news for the ‘peak oil faithful’ is that commodity prices might not become more expensive in future. High benchmark prices today, continue to drive investment into technological innovation for cheaper extraction tomorrow. Little surprise that future oil prices are dipping under spot market dynamics: East Africa has merely added an attractive prospect for bullish supply side expectations. Peak is dead.

...Not only have global unconventional finds flattened Hubbard’s ‘peak’, more and more conventional plays are cropping up. ‘Running out’? We have more than enough of the black stuff to incinerate ourselves several times over. Such supply side bounty has been well documented in the Americas – not just in the US and Canada, but across Latin America, offering a second pass at resource riches. Head all the way over to Australia, and you’ll see a dazzling display of unconventional technologies rapidly increasing kangaroo LNG production. The North Sea can squeeze out a few more drops; Europe can finally get it’s ‘energy sovereignty’ back from shale plays, all while the Arctic offers Russia untold oil riches. Anywhere you look, the narrative is the same. But just when we thought the global hydrocarbon map was complete, another serious player has cropped up, and it comes in the form of East Africa. This is the new African oil rush, and the race to secure regional riches between East and West is on. Nobody wants to lose: Peak oil is dead, the Great Game is back. _Forbes
Much more at the link.

Peak oil doomers tend to give too much credence to trend charts of production and discovery, without examining the underlying reasons for the data that goes into the charts. This lack of insight into conceptual underpinnings dooms them to be disappointed and disillusioned by a resilient energy sector that keeps on going.

There is one type of peak oil that is very real, however. Political peak oil. Temporary and manipulated oil shortages caused by political caprice, instability, and incompetence. That kind of peak oil is often mistaken for the real thing by shallow analysts. Try not to make that mistake yourselves.


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