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View Diary: Shrinking BigOil - The Economist on oil (I) - the smart stuff (31 comments)

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  •  Thanks (none)
    Informative as always.  Should I infer from your post that you are an optimist about these countries' ability to eventually raise their production in line with their reserves, and that peak oil is in fact still a number of years out?
    •  they probably could, if (none)
      they invested or let others invest.

      I still think that it would be possible to still have  (slightly) increasing oil production for the next 10 or 20 years if the investments were made to develop the fields in those countries that have been underdeveloped. But they don't give access, and don't do it themselves, either for budgetary, technical or strategic reasons, so de facto peak oil seems pretty near. we're likely to see a pretty long plateau in oil production, but with demand for cheap oil increasing rapidly, ths shock will still be pretty nasty. You need to increase prices a lot to reduce demand.

      in the long run, we're all dead (Keynes)

      by Jerome a Paris on Sun May 01, 2005 at 02:41:08 PM PDT

      [ Parent ]

      •  This is not a bad thing (none)
        Despite the talk about advanced technology being some sort of savior, the pool of recoverable oil is a finite resource.  Therefore the area under that integrated production curve is basically fixed.  The higher we drive up that number at the peak, the steeper the decent will be on the backside of the curve.  It is far far better for the entire civilized world that there be a sustained plateau at relatively high prices and then a long slow steady decline for many years, than the alternative, which is that we scour the world for every last bit of produceable resource, get it all cooking at the same time, let demand grow organically with the increased supply and then watch it all crash.  That is the doomsday scenario laid out in the web sites like Dieoff;com and the like.  It  doesn't have to be that way.  I know it sticks in everyone's craw, because it means high prices and high profits for the oil companies, slower growth and changes in lifestyle, but there is no way around it.

        It can also mean good things.  Like a return to some sane economics where local labor and manufacturing is valued because transportation costs are prohibitive.  Where the WalMart big box import it from China paradigm that is killing Main Street is no longer viable.  Where it makes sense to redesign the way we live, for the better.

        We will find alternatives.  Not all at once and probably not a single silver bullet.  But finding those alternatives requires an environment where energy is frankly valued more than it is today.  That day is I think rather close at hand.  But it also requires that the fossil resource still be available to help us make the transition.  I think that this is what is shaping up, as long as we don't give in to the impulse exemplified by the Bush energy policy to maximize production throughout the globe by force if necessary.  That will bring on the crash on the other side of the peak and prevent any chance of making a transition.  I refer to this as the "Crack Whore" energy strategy for obvious reasons.

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