Pundit Says Oil Is Just As Likely To Be $500 a Barrel as it is $50 in 5 Years
I was watching CNBC the other morning and they had Dr. Robert Hirsch who is a very respected senior energy analyst with a very impressive resume spanning decades of consulting, corporate, and government energy policy positions http://en.wikipedia.org/wiki/Robert_L._Hirsch. His experience at places like SAIC, The RAND Corporation, and big oil companies have given him true credentials in the energy policy field.
His discussion with the host of Squawk Box was eye-opening. Finding Alternatives 2 hrs ago
These days he is one of the foremost authorities on the question of Peak Oil. Peak Oil is the thesis that at some point the world’s geological reserves of oil and gas will plateau and then enter a long period of decline. Despite the attempts by some (declining) declining number of oil companies, the thesis is well regarded as scientific fact. Oil, for example, is a finite natural resource. The scariest aspect of Peak Oil, is that when it becomes commonly accepted by the mainstream media, governments, OPEC, the EIA, and other leaders in the energy field, a massive wave of psyschological panic will ensue. Why? Because our global transportation infrastructure is so dependent on oil and petroleum based products, that to shift the base of capital equipment to other technologies will be massively disruptive.
If you want to get the real deal on this, Dr. Hirsch recently gave a presentation at a Nanotechnology conference in Boston. His slides can be viewed here http://www.csievents.org/Cleantech2008/pdf/72026.pdf
Here is another resource for media coverage of Peak Oil:
http://www.jordomedia.com/RSS/l_op=viewrss/lid=181625.html
The bottom line is if we don’t get our act together fast, the economic consequences of Peak Oil are going to make the Great Depression of the 1930s seem like a day at the beach. For those of you who might be thinking this is somewhat of an alarmist statement and think we’ve been here before with the two oil shocks of 1973 and 1979, you need to take a hard look at the causes and effects of those events. First, the 1973 oil crisis was a direct result of the Arab-Israeli War. The effect of the oil embargo was unemployment, inflation, rationing, oil shortages, and GDP decline. Like 1973,the 1979 oil shock was caused by political conflict–this time the fall of the Shah of Iran and the assumption of power by Islamic Revolutionaries. Again, the effect on the US economy was similar in both the duration and nature of the problem.
With Peak Oil we will not be so lucky. Peak Oil will signify the beginning of a decline in oil availability at a time when consumption will be increasing. And Peak Oil is not a temporary shock to the system.