In an incredible excursion into Orwellian Doublespeak Land, a talking head on CNBC this morning blamed high oil prices on a shortage of refining capacity, and then wondered why oil prices were so high if there was insufficient refining capacity.

The most recent US refinery utilization numbers show that we are about 4 to 9 percentage points below our usual utilization rate for early April.

IMO, refineries in importing countries are caught between a rising crude oil price--as importers bid for declining oil exports--and the volume of refined product that consumers can and will buy.

On his blog he points to OECD inventories, which are about normal, but so what. Almost all new demand and an increasing part of total demand is coming from countries with no known inventory.

It's hard to speculate on information you don't have. If they have inventories it actually makes the Peak Oil stance weaker (because then there could be evidence of hoarding).

As noted previously on TOD, Krugman in his blog also heaps derision on the 'limits to growth crowd of the 1970's'. This only betrays Krugman's failure to grasp the limits of the economics discipline.

Hmmmm... dunno about this one - it would be nice if he (Mr. Krugman) gave some more details on this. The wikipedia page on limits to growth seems more logical than scientific (we know we can't grow forever, but the specific details they give appear sketchy).

I haven't read Limits to Growth - but my guess is the best way to approach this is basic physics of energy and efficiency. Like the Circulatory System - it was originally thought that blood pump out of the heart and was replaced by new blood (didn't return, circulate), until someone proved (quite simply) this wasn't possible because of how much blood would need to be produced (something like the weight of the human body per day).

Oh actually more: http://en.wikipedia.org/wiki/William_Harvey

This is the same fundamental deduction needed to get people on the right track. And I think that is the basic message Krugman is conveying.

I didn't see any "tip of the hat to TOD" there, but it did seem like a direct response to our criticism last week. So here's a tip of the hat back to Krugman! He may not be quite ready to throw in the towel on economics, but at least he "gets it," not just with oil but food and commodities and resource exploitation in general. If you think about it, given what the rest of the MSM is on about these days, he's staked out a pretty bold position here.