The Economist and Peak Oil... again

From the department of the straw man:
Others assume the reverse: that the price is bound to keep rising indefinitely, since supplies of oil are running short. The majority of the world's crude, according to believers in “peak oil”, has been discovered and is already being exploited. At any rate, the size of new fields is diminishing. So production will soon reach a pinnacle, if it has not done so already, and then quickly decline, no matter what governments do.
Just to clarify:
  1. Peak Oilers do NOT assume that prices will keep rising indefinitely.
  2. Peak Oilers do NOT believe that oil production will "quickly decline".
Informed "Peakniks" know that oil prices go up and down and that there is no magical formula inherent in Peak Oil that will ensure a continual and indefinite growth in oil prices. Even taking into account the effect of a production ceiling, any drop in demand will see prices fall - and many Peakniks (myself included) foresee a drop in the price of oil at some point to below $100 per barrel.

The Economist's assumption here is that Peak oilers know nothing either about economics or oil production. In actual fact, it is The Economist who has proven itself to know little about either the Peak Oil movement or the science underlying its assumptions.


Anonymous said...

What do you think of this piece?


What do you think the prospects are for a very rapid decline in world oil exports? Could the oil market really collapse in nine years?

Anonymous said...

I really need to delete that old blog sometime....

...but yes, the Export Land Model seems to be a "thang" that gives peak oil serious teeth again. And I'm speaking as someone who has struggled for nearly 4 years to convince myself that this is not a total collapse scenario... but merely a "Great Depression".

Reuben Kincaid said...

I noted during the week that in Sydney, there's been an overall decline in the use of petrol - done some 4.4% so far this year. Thi figure was in relation to the increase in public transport.

Funny, I don't this see this driving the price at the bowser.

Anonymous said...

Public transport can only take a small fraction of the driving workforce to their daily destinations... at least in Sydney anyway. What, if another 10% of the driving population tried to catch a bus or train tomorrow the system would be flooded? I forget the exact figure but it was from some long chats with the head of "ASPO Australia". (Just google it)