Reply #8: imporant points. badly written story. [View All]

The 80% overstating of reserves is surpising and probably not that important. How can I say that? Because the main point is when world production will peak. There is a broad consensus already that peak production will be by 2010, or earlier.

I follow this a bit and within that consensus is the belief that there is quite a bit of over optimism contained in the reserve numbers in the Middle East. But that is actually a seperate issue from when total annual world production will begin to decline. If yoiu get my drift.

Total world production is dependent upon hundreds of major and tens of thousands of minor wells. Wherever one looks it's getting harder and harder to punp the oil, and to find it.

So don't emphasise this 80% number. While significant it doesn't tell the tale.

Guess what year US oil production peaked. If you said 73 you are right. What year was the first oil 'crisis'? 73 of course, and there was no coincidence involved. Oil is a centralized market and the price of all oil is dependent upon the price of the marginal or last barrel sold. When that last buyer can't get what he needs he bids up the price and drags it up for the thousands of other buyers. Peak production will be a huge thing for prices.

Also ignore what they said about global warming. The peak in consumption sometime within the next few years hardly means that use will go to zero nor will it magically reverse the CO2 load in the atmosphere now. (This story is very badly written)