KCStar | Oil markets are settling down this morning as analysts report Saudi Arabia has boosted their oil output to over 9 million barrels / day.Holy smokes. Are we gullible!
Have the Saudis really boosted oil output?
Fresh Saudi oil output or are they just tapping storage?
In spite of this short term respite, it’s becoming increasing evident; we are in one heck of an oil related economy crunching quagmire. Oil prices are moving to catastrophic levels and there doesn’t seem to be much we can really do about it. Contrary to what’s been foretold by economists, new energy supplies aren’t gushing into these higher oil prices. Nor is it really curtailing the global demand.
So how did we get into this crucial societal dry hole?
I’ll contend we’ve been led astray by a false faith in economics, a misunderstanding of basic geologic depletion and an intentional false yarn spun about prolific oil supplies.
Although most think oil producers withhold supplies to evoke higher prices, it might well be that oil producers- including Saudi Arabia- are currently producing flat out. There’s just no more there! This is exactly the definition of ‘peak oil’. With the world’s voracious consumption of +87 million barrels / day, we are now up against the limits to growth. Oil production might not ever be able to expand from here. It’s either a downhill slide, or it soon shall be. Sure there will be new oil fields brought on line but this fresh output won’t even counter the current depletion rates of existing aging fields. After all, the average age of the world’s giant oil fields (+500,000 barrels/ day) is 55 years! We aren’t out of oil, but we are out of the capacity to produce more.
How did we miscalculate so badly on something so crucial?
0 comments:
Post a Comment