more on peak oil

YET ANOTHER ARTICLE ON PEAK OIL
I could do this almost every day other than boredom. Whether I would be adversely effected more than you is open to debate. But the reason I bring this up now is that on Tuesday there was a good quoted article at www.urbansurvival.com in the “daily updates” section. Our friends in Norway, Russia and even Saudi Arabia have gone past the point of peak production.
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Now, granted, peak production is no reason to get ones panties in a bunch. If you did not damage a field by over extracting the oil then it will continue to produce for some time to come. Texas, which saw peak production in 1971 is today still in the top ten oil producers in the world. But when almost everyone is past their peak oil production then you start to see some problems. You don’t think the US has problems with oil supply? We went from being the top world producer before World War II to importing almost three quarters of the oil we need now. We go to war over oil. Iraq was invaded fifteen years ago to stabilize world supply when the price was a lot cheaper than it is now. We invaded again three years ago for the duel purpose of stimulating a dead domestic economy and garrisoning the middle east oil producing region.
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If you use the same math that predicting the US peak production accurately it tells us that three very important regions have already hit their peak production. Norway, which together with Alaska got us out of the 70’s oil crisis, has peaked. Britain’s portion of the North Sea has already been acknowledged as seeing declining production. Now Norway, which husbanded their resources a bit better has seen its peak. Russia, recently seen as a strong influence politically by using its oil weapon, is thought to have only been using up what oil it hadn’t used after its collapse ( in other words it would have normally already been gone and reports of its “new” reserves might have been overblown ). And Saudi Arabia, impractically counted on by everyone to keep up with the growing demand after its one giant field has been pumping for forty years ( about max for a field ), has not only peaked but severely damaged its field.
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Saudi Arabia has been the reason most folks don’t worry about Peak Oil. Oh, look, our magical Arab buddies in Saudi Arabia have been pumping 10% of the worlds oil supply for half of forever and against all logic and reason I really really think if I close my eyes and tap my heels together three times and wish real hard they can go on producing oil until Baby Jesus himself comes down from Heaven and gives George W. Bush a big wet sloppy kiss and sprinkles sunshine over the American people because of course we are the chosen people and nothing bad could ever happen to us, amen. Saudi Arabia has got crap left for oil. You have professional investment bankers specializing in the oil industry telling us about all the problems the House of Saud has with its oil supplies and its political stability and we think no problems can arise despite all the odds.
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Saudi Arabia has damaged its oil fields by massive salt water injection. That gets more oil out quicker but in the end it damages permanently the fields ability to give up all of its available recoverable oil. You get more quicker but in the long run the total amount you can extract is less. It is like the government taxing someone at 100% of income and they die of starvation. They would have gotten more if they just took 20% a year for decades to come. The leaders of Saudi Arabia are gambling it now, not caring about the future. They must realize the odds are poor of their continuing in power.
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Russia can still use its oil weapon, but they are playing with a reduced arsenal. Relatively speaking this won’t be a problem if everyone now has less oil to play with, so they are worth watching. Actually their position might be enhanced if Saudi Arabia sees a drastic production decrease ( it “voluntarily reduced output to stop the price decline” ) and they become the new power house of the region. Energy is life, it is food, it is warmth in the winter, it is military advantage. It is economic superstardom. Even with a slow production decline they can write their own ticket. Chances are the US won’t get an invite.
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Norway was important as a non-threatening oil producer. Now we have one less friendly face offering us oil ( well, not too friendly as they started a Euro/oil market exchange ). Mexico has seen a decline in production ( the Wetbacks For Oil program ) as has Canada ( why does Canada care about us?- I can’t think of one unless their economy is even worse than ours which is hard to imagine ). Who out their loves us enough not to kick us as soon as we are down? Well, Washington made our bed and the poor schmucks minding their own business are going to get to lay down in it.
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Oil is not about to disappear. The US still produces 25% of what it needs 35 years after peak production ( and that is with a lot of population growth thrown in ). We shouldn’t starve anytime soon. But without affordable and abundant oil our economy will suffer. We will enter a dictatorship and have hyperinflation. Paying attention to Peak Oil means you can prepare for that. Buy alternate energy sources now. Insulate better now. Build passive solar devices now. Get your dollars turned into silver. Stock up on plenty of grains and beans before the price skyrockets. Expect lots of inflation. Read everything I write and buy everything I sell so I can prepare for Peak Oil.
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