The Economist admits it - We are at Peak
Yes, we are at conventional oil peak. Even the venerable The Economist admits in its August 2013 issue.
Of course, they can't do mea culpa, so they hide it as "peak demand", not peak production flows.
However, demand follows pricing, economic growth and policy decisions - and those are driven by basic oil field geology, not technology, not fanciful thinking or fairy tales about magical substitution.
At the time of writing this oil price (WTI) is at $106, at the time when the whole world economy is grinding to a halt again. Basic law of supply and demand -- if one believes in plentiful shale oil silliness -- would dictate a rapidly falling oil price. But this is not happening. The supply/demand margin is too tight. Supply is constrained, flow is at near peak - on an undulating plateau of maximum production. Unconventional liquids can only help this very modestly.
So, here we are - in 2013 and conventional oil production peak is starting to show it's effect. It will only get gradually more tight from here forward, with slight swings to the better and worse in the short term. The overall trend will be:
- aggregate conventional production going down
- prices going up
- more swings in short term prices
- more complaints about effects to world economy
- more frantic investment in shale oil and tight gas (with mostly slow gains that fizzle out fast)
- more instability in the Middle-East, more coups, more uprisings, more changes in power
- more tensions between USA, Russia and China - all of which are gunning to get to the alpha dog position in the control of remaining conventional oil reserves (mostly in Middle East and in Africa)
- more investment in natural gas and coal
Of course, this could all be wrong. We could just wake up, decide on a crash course to set things right, embark on worldwide coordinated conservations efforts and a plan to move off conventional oil dependency over the next 15-25 years or so. At the moment, the prospects for this kind of mass migration do not look good, but who knows - the future has a way of surprising us.
Here's to now. The only moment that matters. Use it wisely.
