The Oil Drum

125 comments on Oil Price Poll

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oilaholic on July 9, 2006 - 2:33pm

I voted for C but not because the MSM will pick up PO. The concept already is seeping into the MSM, but believers have been effectively colored as a new flavor of political nut by nearly all MSM commentators.

More to the point, the commentators have a lot of excellent ammunition. First, the war and weather impacts are keeping lots of oil off the market. Therefore, even if oil production is flattening or begins to fall, that does not prove anything about "peak oil", which is a geological concept. Man-made or natural impacts on production invalidate a short term decline from indicating that oil has peaked in a Hubbertian sense.

Secondly, there is a LOT of new oil production coming on stream over the next 3 years.

Thirdly, the concept of PO as debated on MSM is a confused one that includes production of unconventional oil and other energy products, like bio-fuels. So a true discussion of PO on the MSM is almost impossible to have now.

What I think will have more impact is the increasingly rapid change in mind-set among exporting countries. They are becoming horders, recognizing that if they hold back production, they do not need to sacrafice revenue because price increases will produce the same revenue on lower production. These are the folks who truly do understand PO and who are acting in their best interests which are quite different now that a Peak (at least in sweet crude) is reasonably close to being in sight, if not already here.

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Rose Selavy on July 9, 2006 - 4:09pm

I am curious whether the political debate in Kuwait about how fast to deplete the country's oil reserves, as well as the desire to understand the true size of their reserves, is the beginning of something new and significant. One could see it as "hoarding", or, as someone else on this list observed, as a sort of unilateral "depletion protocol", like the one Richard Heimberg has proposed.

Most of the big oil producing countries (with the exception of Norway and Russia) also have fast-growing populations; the political pressure to curtail exports to satisfy (and subsidize) growing domestic demand and provide for future needs could become a larger and larger consideration. Policy changes in exporting countries could dramatically affect the amount of oil available for export, even if total oil reserves or production don't change as dramatically.