If We Had The Luxury Of Sarcasm…

23 05 2008

If we had the luxury of sarcasm when it comes to peak oil, I might read the comments on posts like this and say something like:

Syzgus is right – the idea that oil is finite is absolutely ludicrous. And nice touch pointing to the federal government finding those massive reserves in North Dakota. Good thing they weren’t WMD’s!

There is oil everywhere and technology will always enable us to extract as much of it as we could ever desire, world without end, amen. And if not, technology will power our cars with pop rocks, which are abiotic and thus of infinite supply, unless we get that flammable salt-water engine commercially viable first.

And I feel bad for folks like you, Elihu, because you can never be proven right – we could run out of oil tomorrow but true believers in infinite oil and blessed technology would just believe in OPEC/Big Oil/Gov’t conspiracies are keeping us from our birthright of fossil fuels.

But people, listen – the price of oil has DOUBLED IN THE PAST YEAR. And its NOT going to go back down to pre-2007 prices, let alone 1980’s prices, EVER. That has enormous ramifications for “life as we know it.” Let’s look reality in the face and embrace it. As we see reported in the Wall Street Journal today:

The world’s premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.

The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world’s top 400 oil fields. Its findings won’t be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought.

[Graphic]

A pessimistic supply outlook from the IEA could further rattle an oil market that already has seen crude prices rocket over $130 a barrel, double what they were a year ago. U.S. benchmark crude broke a record for the fourth day in a row, rising 3.3% Wednesday to close at $133.17 a barrel on the New York Mercantile Exchange.

For several years, the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently. Now, the agency is worried that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.

The decision to rigorously survey supply — instead of just demand, as in the past — reflects an increasing fear within the agency and elsewhere that oil-producing regions aren’t on track to meet future needs.

“The oil investments required may be much, much higher than what people assume,” said Fatih Birol, the IEA’s chief economist and the leader of the study, in an interview with The Wall Street Journal. “This is a dangerous situation.”

Dangerous – but only from the perspective of a world established on cheap fossil fuels as currency. The danger is that the world will become smaller, and slower, and more humane. But my fear is that like the dwarves in C.S. Lewis’ The Last Battle, the peak oil deniers will enter the new world bitter and blind, believing that OPEC has denied them their treasure, unable to see the treasures that God’s natural world and economy has always offered.

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