To be fair even perma-PO-Bull Matt Simmons said something along the lines of "we won't be able to judge Peak until it's in the rear view mirror..."

(But by having a damn good informed guess I hope -and probably so do many who come here- to be positioned well in order to benefit, cope OK or simply survive)

Nick.

On the menu tonight is MEAT AND POTATOES! Yummy!

We are not going to see support for mitigation of oil until every single producers admits they are well past peak. Physical evidence alone does no good.

There is a strong element of belief in all this. Unfortunately, as Memmel and so many others here point out ... the beliefs are ALL WRONG!

IEA sez:

The current financial crisis is not expected to affect longterm investment, but could lead to delays in bringing current projects to completion, particularly in the power sector. P39 Exec Summary

I'd suggest the IEA hire an economist ... unfortunately, most of these are servants of the status (or stasis) quo. Things really ARE different this time. The "current financial crisis" is a long- term shift in the economic ground rules even if one leaves the micro- economics that surround petroleum production untouched. There will simply be less (or no) credit available to anyone in a few years and this will become a permanent state of affairs.

As a 'financial lifeboat', a locally distributed hard- currency regime could be built from scratch but the available credit from such a system would be hard pressed to meet the needs pressed upon it.

The likelihood of a hard- currency regime happening in the current political environment is almost non- existent.

Nate sez:

Ironically, the day of this IEA release calling attention to the precarious nature of future energy supply is being met with fresh 3 year lows on oil prices. Unfortunately, recent market events, only indirectly related to oil, will now likely set July 2008 in stone as the date of maximum world oil production, despite the 'best-best case' scenario portrayed in the IEA report. Up against near double digit depletion rates and higher cost (lower energy gain) prospects, the oil industry now also faces a growing lack of confidence in the international financial system where near herculean investment is needed (37 times the recent controversial $700 billion bailout package in US), and credit, especially when the price of oil is well below the marginal cost of extraction makes approving new projects, let along continuing existing production, problematic. Though not explicitly stated, one may infer that there is now increased risk that these investments will not be made. Furthermore, the goal of OECD governments of procuring cheap energy is incompatible with these investment goals. And still further, the goal of OECD governments of having cheap energy is incompatible with their goals of reducing CO2 emissions.

The market is wicked; it is inherently unstable. The idea that markets can faithfully serve the financial needs of investors is being unmasked as a fantasy. In all instances, the stable market is a manipulated market; the breaking of the hedge funds is giving all a view of the 'Free Market' at work. Markets are inherently and destructively unstable. This is my own personal opinion and is not shared by 'legitimate' economists.

Nate sez more:

As has been written here often, the world's fiat currency reserves and financial assets, which works as a system of exchange and store of value because everyone agrees that it does, nominally dwarfs the amount of real commodities. Leverage, and leverage upon leverage provided by easy credit not checked by biophysical realities unleased a massive speculative bubble in financial asset classes in recent years. Though some claim this was an oil bubble, the facts suggest it has been a bubble in all paper assets, the unwinding of which, though largely over, has spilled over into the real economy. Earlier today Russia, the world's second largest oil producer, lifted their short term interest rates to 12% to defend the ruble. The currency traders, out of defense, are playing increasingly serious games of hot potato. Hedge funds and money managers, part of a global derivatives market measuring north of $700 trillion dollar earlier this year (in perspective that was 10 times the value of a 1 trillion barrel yet-to-be-recovered oil resource at $70 a barrel)

The unwinding of paper assets is just beginning; there is a lot of paper out there and the belief holds that the market will 'turn around some day (tomorrow would be nice.) Most 'investors' don't mean to day- trade, they hold until retirement ... or until the doomsday market hits and stop loss orders (or margin calls) eject them. What is happening (starting in credit- landia) is a market clearing event; all speculators will be broken before the bottom is reached. Real estate will be valued as unimproved land, stocks @ pawn- shop valuation and bonds will tell us the future was ... in Paul McCartney's famous lament ... "Yesterday, all my troubles seemed so far away ... "

Solutions:

- An Oil Drum solution would be an 'Alternative Economic Convention' that would sharpen the focus of non- establishment thinking and press to change public policy. I can think of several very smart persons who would have something useful to say; Nouriel Roubini, Michael Shedlock, Doug Noland, Umair Haque, Greg Mankiw, Nassim Taleb, Herman Daly ... the people here could certainly add more names.

Something needs to be done to move the situation from 'top dead center'. Have this convention and ask Obama Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to attend.

:)

Its actually much worse than that the consumer is already fairly certain high oil prices are a con game by the oil companies the recent price drops will make it almost impossible to get consumers to believe in peak oil.

This is very insightful. I'm a PO believer. Most people here are too. But the fact of the matter is that we are tiny percentage. My business partner thinks oil company profits are totally obscene. The "Photo of the Day" in my local paper is a picture of a gas station sign advertising the first sub $2/gal price here in town for about as long as anyone can remember. Nowhere is this IEA report mentioned.

My totally unscientific survey suggests to me that 90% of the country thinks that oil problems are over -- afterall, gas is only $2 now. 8% don't really care because they either don't drive or are so rich that price is irrelevant. 1% are one or both of perpetually stoned/psychotic and are simply not capable of caring. Of the remaining 1%, a few are POers concerned for the future, a few are POers hoping hoping for calamity due to religious beliefs, environmental notions, and/or a form of self-directed hatred (where self=nation) or anger toward the "rich bastard oil moguls who deserve to be taken down a few notches." A few simply defy categorization.

Anyway, in my not so humble, but not so valuable or nationally voluble opinion, we won't see any recognition of PO till gas approaches $4/gal again, or it isn't available in sufficient quantities. Even for me, with gas this cheap, I've stopped hypermiling, ride my motorcycle far less, and think very little about running out for an errand. This of course, does not bode well for the future as my behaviors are certainly compounded by millions.