Peak Oil + Banking Crisis = ???
After reading articles after articles that spell more doom to the financial markets of the world - like a very sudden price drop for property inside London (this is the town where just a year ago someone tried to sell a three square meter room for 200.000 pounds) there is bigger trouble looming yet and it comes from another very familiar side - Big Oil.
I have been very clear that all the evidence that I could read over the last few years points to the fact that we basically have reached peak oil by now - no later then 2015. And all those experts outside the oil industry who have been predicting that seemed to be right. Yesterday a friend came in to tell me that diesel oil has risen 5 cent during the day (!) at the pump here in germany and today a New York Times article further elaborates on the fact that "normally" high oil prices slow down consumption and rise production automatically - with all the dictators wanting to cash in on the high prices - yet this time there seems to be no end in sight because - even so the american market has slowed down the markets in China and India have sucked up that deficit and
Analysts at Barclays Capital said last week that non-OPEC supplies were “seemingly dead in the water.” Goldman Sachs raised similar concerns last month, saying that growth in non-OPEC supplies “can no longer be taken for granted.”
Thats two very established banks and financial instituts saying that we have reached peak oil you can twist these words as you want but they basically mean we have reached the top of the bell - like curve where there is no rise in production and actually from here on down the road production will slowly start get less and less - no matter how big oil fields you will discover now - they will only prolong the flat tip of the curve but won´t be enough to get those prices down nor will they be enough to meet rising demand in Asia.
The outlook for oil supplies “signals a period of unprecedented scarcity,” an analyst at CIBC World Markets, Jeff Rubin, said last week.
Oil prices might reach more than $200 by 2012, he said, a level that would probably mean $7-a-gallon gasoline in the United States.
(when I was in the states 1994 the gallon of gasoline was at 84 cents)
Some regions are simply running out of reserves. Norway’s production has slumped by 25 percent since its peak in 2001. In Britain, oil production has plummeted 43 percent in eight years. The North Sea is now considered a dying oil basin. Alaska’s giant field at Prudhoe Bay has declined 65 percent since its peak 20 years ago.
Thats peak oil as predicted over and over again - dismissed by the oil giants. The not so funny thing is that even now people are not recognizing the grave danger we face - instead of using the last oil to get us into a solar, wind powered world we are still driving around those SUVs to show how dumb we are. At this point the collective wisdom of the world population should set in together with our survival instinct and search for a FAST possible solution out of this mess - yet it seems we just push on the gas pedal so that the crash into that fast approaching wall is going to be even harder and more fatal then if we would gently start to break.
The solution at the moment could be oil rationing - just to get the problem into peoples and companies heads as brutally as possible so that the collective hive can start embracing a solution - of there are already many out there. Unless this happens the fast sports car we are all sitting in is accelerating and accelerating and has less and less chance to get this crash diverted.
A combination of falling production and rising domestic consumption could wipe out Mexico’s exports within five years, including the 1.5 million barrels it sends to the United States each day.
Further clouding the picture, Saudi Arabia, the world’s top oil exporter, signaled last week that it might have trouble increasing its production.
The International Energy Agency estimates that current investments will be insufficient to replace declining oil production, let alone increase overall output. The energy agency said it would take $5.4 trillion by 2030 to increase global output, a level of investment that is unlikely to be met. It said a crisis “involving an abrupt run-up in prices” could not be ruled out before 2015.
(all comments from the linked NYT article)