The Peak Oil Crisis: Masking the Peak

Aug 8, 2008 (2 days ago) Peak Oil News

Falls Church News-Press By Tom Whipple As world oil production has never peaked before, there is no historical basis for making informed judgments as to what is going to happen. All we know is that some six billion people, living in some 200 economies on this earth are soon going to be confronted with getting by on less than the 86 million barrels of oil per day (b/d) that we currently consume. The outcome of the interaction among all those people, all those countries and all that oil is too complex to foresee with any clarity. It has long been recognized among those studying the peak oil phenomenon a severe, lengthy, worldwide economic setback could reduce the demand for oil to such an extent that peak production could be lost in the chaos. Other scenarios involve oil prices rising to such level that demand drops significantly, which would be followed by a major drop in prices, followed by increased demand and rising prices, and the cycle continues. In the last three weeks, world oil prices have dropped steadily so they are now nearly $30 a barrel below what they were in early July. Now this decline could be the result of those pesky speculating hedge funds selling short the oil futures contracts. It could be the $4 gasoline keeping an increasing number of Americans off the roads, or even the Olympics, which forced Beijing into a two-month shutdown of a sizable piece of its economic activity in an effort to clean up the air.