Wednesday, June 29, 2011

Peak Oil Update: Summer 2011

Peak Oil's ugly down slope is starting to show its predictable side.  Peaking of cheap conventional oil means no sustained growth and less ability to issue and pay debts.  We can only print money for so long before we realize that more money doesn't create more cheap oil or real growth.  Greece shows us what can happen anywhere when society lives above its means.  We have been able to live very well because of cheap oil.  We're now living above our energy means.  Releasing strategic reserves is one of the many unusual events you'll see happen to try to solve a long term dilemma.  A dilemma doesn't have a solution.  Only problems have solutions.  Eventually that strategic oil will have to be pulled off the market and put back into reserves.  No one talks about that of course.  OPEC isn't happy about the strategic petroleum release.  They need high prices to keep their own people happy and well funded.  The Saudis didn't seem too excited to pump excess oil this past year once Libya shut-in.  Of course Libya has the ever disappearing light sweet crude that the Saudi's don't have.  China is getting a piece of the Tar Sands up north.  Very smart for them.  Here in the states we'll probably start arguing about drilling more once again as if getting more oil will help us learn to live with less of it.  Of course no one talks about how our oil production peaked 40 years ago and that the Alaskan pipeline is only one third full.  That would force people to face the reality that our future brings....


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