Wall Street Succumbs to Peak Oil
It's interesting that two of the biggest factors driving markets and economic policy right now are scientific theories, those of climate change and peak oil. For the past two years, every time I've chatted with an energy or commodities analyst, I have asked whether he or she believed in peak oil, the theory that global oil production has reached its zenith. The answers have slowly transformed from an outright "No" to "Well..." to "Certainly, investors seem to buy the theory more and more."
Yeah, $135-a-barrel oil will do that to you. I was on CNBC's Kudlow & Co. last night with oil guru Daniel Yergin, who has consistently dismissed peak oil while at the same time consistently missing the continual rise in oil prices. I didn't get a chance to ask him whether he was changing his position. (He seems to have undue faith in the Saudis' oil reserve claims.)
What do you think is causing the spike in oil prices? Please vote below:
Tags: Wall Street | gas prices | oil
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Reader Comments
when we produce less year over year we will have reached peak oil ... and not before...
until we produce less year over year we do not have Peak Oil...higher prices does not equate to peak oil, just more buyers than sellers.
Peak oil
Peak oil be here, folks. We use 30% more oil per capita than the next largest world user. That's huge. One way the US can continue maintaining a stable supply is to fake evidence that a weak country with a lot of undeveloped oil is developing weapons of mass destruction and unilaterally attack it, against the advice of the other large oil using countries and trading partners. If we did this, and did end up controlling the weak country's oil production and sales, we would take "first dibbies" on purchase of the oil output. Plus we still pump 32% of our own oil needs puts us in pretty fair shape for a long time.
The other biggest world users, the EU and soon China, however, would rightly feel endangered by this and try to cause us to fairly share the world's remaining oil. They could begin by negotiating with us to continue to let all oil to be sold to all comers at the same price. One fairness issues is how to solve the great differences between our vastly higher per capita use of oil resulting in the US, with 4% of the world's population, using over 25% of the world's daily oil consumption. Another issue to negotiate is that the EU has very high fleet mileage standards and taxes on oil relative to us.
If negotiations didn't work, the EU and China might begin programs of cashing in the trillions of dollars of US debt they hold, crushing the dollar, pushing the US into a depression, ending our world wide adventures like Iraq and Afghanistan, closing our overseas military bases, and pushing the price of oil bought in dollars to several times the price in euros.
We sit out here in the Western Hemisphere with 300 million people, while the EU has 425 million people and a larger GDP than the US. China has 1.4 billion people and a skyrocketing GDP. They both sit on the Eurasian land mass where the majority of world economic action takes place. If we still wouldn't share remaining oil equitably, they might militarily attack and defeat us and then force us both to tax oil and lay on mpg standards in parity with the rest of the world, plus pay them reparations for the costs of their military action. I think I'll vote for high US mpg and gas taxes now, plus no more overseas adventures and full cooperation with the EU and China in finding equitable solutions to sharing remaining world resources.
Peak Oil is a catastrophe
Peak Oil is a catastrophe. I have put together all of the best scientific and government reports together in this free report: http://www.peakoilassociates.com/POAnalysis.html
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