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80 comments on If you think the oil situation is bad..

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Carolus Obscurus on April 26, 2008 - 3:12pm Permalink | Subthread | Comments top

The same article was published in Drumbeat a week ago but I think it's worth repeating. Here's my comment from last week:

When 'moderates' like Vaclav Smil say the situation is dire, the writing really is on the wall. Until recently Vaclav Smil was on the optimistic side (at least as regards fossil fuels), though he was certainly no cornucopian. In the chapter 'Fossil Fuel Futures' from his book 'Energy at the Crossroads' (2003) Smil critiques the imminent peak oil theory as unsubstantiated and indeed expresses a general reluctance to make any forecasts at all.

A new conventional wisdom of an imminent global oil production peak has been taken up enthusiastically by media always eager to report bad news, and we have repeatedly been told that "the oil era is over". [...] all past efforts to pinpoint the peak years of global oil output and its subsequent decline have been unsuccessful, and I will argue that the latest wave of these findings will nor fare any better.

(pages 195-196)

etc. etc.

I remember when reading Smil's book three years ago thinking that if this guy changes his mind we're all done for.

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PeakPlus on April 28, 2008 - 3:45am Permalink | Subthread | Parent | Comments top

Right now, any hype about oil is about the price and not about the peak. When prices rocket up on any market, people look for news to support it, instead of the other way around, like it actually should be.

Once big names start toning in, it usually means the market is played out (if the movement has been going on a while). I'm waiting for Yergins to chime in. Or Buffet? Back at the end of 2004, for instance, the USDollar was setting records of $1.35/to Euro. Buffet came out with visions of Dollar collapse. One year later, it was back under $1.20. And why did the price of oil turn back down after Katarina?!? Any contrarian investor would see signs here (Smil's conversion) of oil price collapse.

Well, collapse might be too strong of a term, but the moment oil goes back under $90, there will once again be the "I told you so" voices, and the public will lose interest again.

Cheers, Dom

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