The Oil Drum

104 comments on DrumBeat: August 5, 2006

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Darwinian on August 5, 2006 - 10:03am

An industry publication claims OPEC thinks by 2050, the value of a barrel of oil will be zero, with oil completely replaced by biofuels. (Is really fear of biofuels, though - or acknowledgement of peak oil?)

No, those guys really do fear alternative fuels. They bought into that silly idea right from the start. Kuwaiti officials have made statements in the past that they need to produce all the oil they can now before it is replaced with something else. Also that is the reason Saudi (up to recently) has tried to keep prices low. They were afraid something cheaper might replace oil and they would be left with all that worthless black goo.

You guys must understand that even the average US public has bought into this idea for years. "The stone age did not end because they run out of stones." Remember that one? And the OPEC countries bought the entire concept hook, line and sinker.

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conrad on August 5, 2006 - 12:28pm

Regarding Kuwait, there was a post on Kuwait linking their production to their true reserves. The post said this was "tabled". "Tabled" means "postponed". I suspect when push comes to shove Kuwait will produce at maximum.

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treeman on August 5, 2006 - 1:51pm

Darwinian, This is the "Yamani" mentality i spoke about yesterday. The Harvard educated Sheik led the KSA for decades in determining energy policy and has always worked on the premise that prices need to stay low enough to prevent the development of alternatives. The lack of production to lower world prices, by KSA is the biggest signal to me that they are having production problems. That and the consistent change in stories over the last two years as ablely documented by RWMCalister Aug 3rd., together with the obvious declining production, lead me to believe that Simmons predictions are upon us.

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Darwinian on August 5, 2006 - 2:15pm

Yes and in hindsight this is the worst thing that they could possibly have done. By keeping prices low they encouraged consumption. Low prices kept gas hogs on the market. Low prices encouraged urban sprawl. Low prices kept public transportation from being developed. Low prices meant we put vast sums of money in the interstate highway system. And worst of all, low prices meant that their oil would be depleted much sooner and they would get a lot less for it.

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