Living Car Free - Oil shortage forecast......

Some of this is due to bureaucratic bungling, but these are public statements. If continued world production must rise, it would be great if other similar sized deposits like the Cantarell field were found.

http://www.iht.com/articles/2007/10/22/bloomberg/bxatm.php

While individual fields have steep post peak drop offs of production, I doubt that post world peak declines will be as dramatic. This is because of the many smaller fields that have and will be exploited, the staggered timing of their exploitation, and technologies that will extend the production of all fields.

The real bug in the ointment is the rise in world consumption. The USA powerless to affect that trend as most of the energy use growth is in Asia, and then someday Africa and South America. We will soon experience a gap between supply and demand. This will naturally (though quite painfully) cause a change in the priority's of petroleum use through the wonderfully egalitarian method of free market forces.

When oil prices pull back to about $65, buy oil companies with large oil reserves. And as oil prices rise, there will be more oilfield work-overs and exploration going on. Boom time for the suppliers of such related things: NOV, DRC, DRQ, HERO, HAL and SLB for example.

the big issue is actually that A) we are net importers and B) exporting countries are ramping up their own domestic consumption whilst at the same time experiencing declines in production meaning ultimately the drop in available oil to importing nations is gonna drop fairly steeply

the big issue is actually that A) we are net importers and B) exporting countries are ramping up their own domestic consumption whilst at the same time experiencing declines in production meaning ultimately the drop in available oil to importing nations is gonna drop fairly steeply

You will have to search The Oil Drum (http://theoildrum.com/) for the links to the articles, but a couple of interesting points come to mind. One is the "remorphing" of the US military to prepare for African operations and the fact that the Arabs (Saudi's/UAE) are spending large sums of money to build refineries, they have in the past concentrated on selling crude. Now the apparent plan is to sell finished products at higher profit margins. The refineries are concentrating on gasoline and ethelyne (a major component in plastics) Interesting times we are living in. On a personal view I think we need to look to the collapse of the Soviet Union, Cuba and places like Crimea as to what is going to occur in the US. We are well on our way to becoming less than a world power, both economically and politically.

Aaron:)

the big issue is actually that A) we are net importers and B) exporting countries are ramping up their own domestic consumption whilst at the same time experiencing declines in production meaning ultimately the drop in available oil to importing nations is gonna drop fairly steeplyAssuming alternatives don't come online en mass. Given there's quite a bit of money already invested in tar sands and the like, I think it's likely alternatives will offset any losses from the land export issues. Now, that being said, a lot of the proposed mechanisms for extracting that stuff are net energy losers, but as long as people are willing to pay, and we have relatively cheap, abundant alternative sources of energy such as onsite NG or fission, they'll pull that oil muck out of the ground in order to make $$$. Eventually people will transition away as alternatives are successfully brought to market, but the industry as a whole has been able to limit the public's exposure to alternatives, and will likely continue to do so in the future in order to maximize revenue.

On a personal view I think we need to look to the collapse of the Soviet Union, Cuba and places like Crimea as to what is going to occur in the US. We are well on our way to becoming less than a world power, both economically and politically.Yes! It'll be interesting to see how the country fragments provided something like that happens. Imo this is the same crap that always happens w/ wealthy nations/groups. Small groups of greedy mofos move between the richest areas in order to satiate their greed. An unfortunate side effect is that the once wealthy country will go through hard times, but at least once all the blood's gone the vamps won't stick around.

The lastest from the Falls Church News Press and Tom Whipple, (http://www.fcnp.com/index.php?option=com_content&task=view&id=1984&Itemid=35) there is a lot more in depth reporting on the Oil Drum. I much prefer his analysis over the rantings of Jim Kunstler (http://kunstler.com/). But quite often it takes different outlooks to get the point(s) across. I guess the big question in my mind is just how long do we really have. I think we are already starting to see some effects.

Aaron:)

Show me HARD DATA that there is unlimited oil and this is a practice in futility.Here is the fundamental problem. Oil producers work day-to-day on finding production. They seek to replace only about as much as they use. Why? Because finding it requires almost as much money as it does to produce it. So why look until you need it? They don't. So, the HARD DATA you seek does not exist. There are NO reliable estimates of the quantity of oil that's produceable. There never has been. This is why it always seems like we are running out of oil. 25 years ago, we had 25 years of oil left. Now, 25 years later, we have... about 25 years of proven reserves. I suspect 25 years from now we will have... about 25 years of reserves.

Add to that, that oil producers only publicly release PROVEN reserves, quantifying the amount of existing oil from publicly available information will never be accurate. Proven reserves means the deposit has be drilled and the size of it quantified, and verified by drilling activity. There are multiple multi-B-B-Billion barrel developments found in the Gulf of Mexico in just past year.

Just looking the offshore production areas... we have explored and produced from a grand total of about 5% of the outer continental shelf... lots of areas left to look... why haven't we looked? We haven't needed to! I worked on a project last year to bring on more production from a field that was abandoned almost 25-years ago. Some well rework gas-lift, and BAM almost 10,000 bbl per day new production.

Look up the Eugene Island 330 field sometime. We lifted the decks on those platforms last year because so much oil has been pumped from under the platforms, they've sank over 12 feet! And they are still producing...

The truth is, if you want to worry about this go ahead. This isn't aimed at you directly, but I hear a lot of people talking about oil production, reserves, peak oil, we're running out, the sky is falling, etc. that have little or no exposure to the daily operations and priorities of the oil industry.

US production of oil did peak in the 70's and has declined without mercy ever since despite heroic efforts to stop it. I'd like to know what you define as "heroic efforts". If by "heroic efforts" you mean stacking (storing and not using) drilling rigs, slashing exploration budgets, relinquishing leases, and selling off production fields, then ya, there have been some heroic efforts!

Dave.

Here is the fundamental problem. Oil producers work day-to-day on finding production. They seek to replace only about as much as they use. Why? Because finding it requires almost as much money as it does to produce it. So why look until you need it? They don't. So, the HARD DATA you seek does not exist. There are NO reliable estimates of the quantity of oil that's produceable. There never has been. This is why it always seems like we are running out of oil. 25 years ago, we had 25 years of oil left. Now, 25 years later, we have... about 25 years of proven reserves. I suspect 25 years from now we will have... about 25 years of reserves.

Add to that, that oil producers only publicly release PROVEN reserves, quantifying the amount of existing oil from publicly available information will never be accurate. Proven reserves means the deposit has be drilled and the size of it quantified, and verified by drilling activity. There are multiple multi-B-B-Billion barrel developments found in the Gulf of Mexico in just past year.

Just looking the offshore production areas... we have explored and produced from a grand total of about 5% of the outer continental shelf... lots of areas left to look... why haven't we looked? We haven't needed to! I worked on a project last year to bring on more production from a field that was abandoned almost 25-years ago. Some well rework gas-lift, and BAM almost 10,000 bbl per day new production.

Look up the Eugene Island 330 field sometime. We lifted the decks on those platforms last year because so much oil has been pumped from under the platforms, they've sank over 12 feet! And they are still producing...

The truth is, if you want to worry about this go ahead. This isn't aimed at you directly, but I hear a lot of people talking about oil production, reserves, peak oil, we're running out, the sky is falling, etc. that have little or no exposure to the daily operations and priorities of the oil industry.

I'd like to know what you define as "heroic efforts". If by "heroic efforts" you mean stacking (storing and not using) drilling rigs, slashing exploration budgets, relinquishing leases, and selling off production fields, then ya, there have been some heroic efforts!

Dave.

Actually, I tend to agree with you more than with the peak oilers, although the truth might be somewhere in between. For example, yes a lot of reserves have been discovered in the Gulf of Mexico, but also, yes, it is more expensive to extract these deep offshore reserves. Similarly, I suspect that Russia has discovered oil under the Arctic Ocean, but again this will be expensive to mine and transport.

I wish we did only have a few years of reserves left, but I fear the problem is worse than that. We probably have plenty enough to turn the Earth into Venus.

No matter who's right, the plan has to be the same. We have to drastically curtail oil consumption and quickly develop alternatives. All other paths lead to self-destruction.

For example, yes a lot of reserves have been discovered in the Gulf of Mexico, but also, yes, it is more expensive to extract these deep offshore reserves.

That's sort of true. The move to deepwater has been an interesting economic exercise. In the GoM the two largest costs/risks are labor and drilling. Drilling being the biggest expense. The majors think of it this way... would you rather drill 100 small wells that produce 1000 barrels per day, or would you rather drill 10 wells that flow 10,000 barrels per day. Yes, deepwater drilling costs are higher, but long term it's actually cheaper because the reserves are larger. When you add in the cost of helicopter, boat, and shore base support it's much more economic to develop and support a smaller number of deepwater developments. As long as your pockets are deep enough to a) take the risk, and b) come up with cash up front needed do it. Realisitically, it's a $5-10 billion exercise to develop a single asset that will produce 20-30 years. The majors are tying up (risking) large sums of today's money for returns reaching well into the middle of the century. The idea of looking this far ahead is a new phenomon in the oil industry. (Big bill today, big return tomorrow)

You can spend as much or more in shallow water for similar production volumes, but you do it over a drawn out time period. Shallow water looks cheaper, at $20-30 million each. But, it takes a lot more of them and they have a shorter life span. For small operators, that don't have a lot of cash, this is a great route to go. The independents pay for tomorrow's production with today's profits. (small bill today, small return tomorrow, repeat often)

This is why we've seen the Chevron's, BP's, and Exxon-Mobil's of the business move to deeper water and selling off their shallow water stuff. And you can see the Anadarko's, Devon's, W&T Offshore's and Apache's of the business buying those shallow water platforms from the majors.

Production and reserves fall because the smaller guys don't do the amount of drilling and investment that the majors did years ago. They don't have the dollars to spend, because they don't make that much - it's not been a very profitable industry long term (though the last few years have been great!).

I wish we did only have a few years of reserves left, but I fear the problem is worse than that. We probably have plenty enough to turn the Earth into Venus. No matter who's right, the plan has to be the same. We have to drastically curtail oil consumption and quickly develop alternatives. All other paths lead to self-destruction.I tend to agree with you on this. I think in terms of what it costs to produce, and the potential hazards of producing it, oil is a loser. Even at $100/bbl it's still 12.5 TIMES cheaper than Starbucks coffee.

Dave.

Here is the fundamental problem...
Dave, thanks for the thoughtful explanation and the industry insider point of view. As for the idea that we can find the oil when we need it, that is something that indeed occurred before, back in the 1970s with Alaska, the North Sea, Cantarell, and if I'm not mistaken about the time frame most of the offshore discoveries in the Gulf of Mexico. So your position isn't something that can be dismissed lightly.

For us oil fretters, there are two considerations.

Pedex mentioned one, which is the idea that the largest, cheapest and most accessible fields are found and exploited first, implying that exploration and extraction gets more expensive with time. Depletion in the old giant fields has to be replaced not by a handful of new giant fields but by a swarm of reworked old wells and smaller new discoveries in places that were overlooked before.

ChipSeal mentioned the other point, that the projected demand for oil might soon outstrip even an increased supply. In other words, we can easily burn up every drop of oil you can produce and still come back at the end of the day whining that it isn't enough and it's way too expensive.

Dave, thanks for the thoughtful explanation and the industry insider point of view. As for the idea that we can find the oil when we need it, that is something that indeed occurred before, back in the 1970s with Alaska, the North Sea, Cantarell, and if I'm not mistaken about the time frame most of the offshore discoveries in the Gulf of Mexico. So your position isn't something that can be dismissed lightly.

For us oil fretters, there are two considerations.

Pedex mentioned one, which is the idea that the largest, cheapest and most accessible fields are found and exploited first, implying that exploration and extraction gets more expensive with time. Depletion in the old giant fields has to be replaced not by a handful of new giant fields but by a swarm of reworked old wells and smaller new discoveries in places that were overlooked before.

ChipSeal mentioned the other point, that the projected demand for oil might soon outstrip even an increased supply. In other words, we can easily burn up every drop of oil you can produce and still come back at the end of the day whining that it isn't enough and it's way too expensive.

the 60 top producing places on the planet are in decline, this is a fact, and so far as of yet there are no replacements, and if replacements were found right now, not tomorrow or next week, but right now, by the time they come online they've already lost so much due to the decline of existing fields productin will fall anyway

many many oil co's and countries have played out this same scenario ad nauseum

happened in the US

happened in the North Sea

happened in Mexico

happened even in Norway

initially a field is found, mapped, spudded a few times, then a relatively good estimate of what is there is calculated, then inevitably that is blown off as too low and unrealistic, meanwhile its tapped and exploited for quite awhile then all of a sudden production starts falling.........next thing ya know the rig count spikes and holes start being drilled like there's no tomorrow, but guess what? the original estimate was dead on and they get to 50% of QT and production falls anyway which is natural

the US bet against it, and lost

the UK bet against and lost

Mexico bet against it, and lost

Norway didn't get burned as bad as the others, but it still lost

Saudi Arabia is hard to tell because they aren't exactly forthcoming with data but its looking like the same deal there too.

US production has been falling for more than 30 years now, if it could be raised it would have happened by now, it has not, and it will not, this is the nature of oil fields and almost any resource that gets mined or pumped from the earth. Once you get to about 50% things get damn tough, physics doesn't change no matter how you hope and pray.

what gooch fails to mention is reserves have steadily been falling, not staying steady, the replacement rate fell behind 3 decades ago and has not caught up, its just getting worse

Big oil co's have been doing two things for the last few years, one is buying other companies out to maintain their reserves, afterall, a publicly traded oil co is worth only what it holds in reserves, the other thing they've been doing is stock buybacks and diversifying into other areas.......you don't do this if there's still lots of easy to get oil to exploit.

Another issue is the nature of oil extraction itself. Normally it gets to about 50% then starts falling, but there are some instances where this is not the case. Norway and Cantarell for example, but instead of the normal methods being used they went to gas injection which makes for a longer flatter production curve, but the bad part is the ultimately recoverable amount remains unchanged and the decline curve goes from being gentle to really really steep. Cantarell is crashing in spectacular fashion........it was predicted by PEMEX that it would be like 12%, its been more, way more. Those idiots at PEMEX had their oh sheot moment like 3 years ago, guess what, they didn't act on it and now they are F'd. Just like the US did 30 years ago when they had the news and data in their hands that oil production was gonna start falling no matter what. Well, they tried, and it fell anyway, and its still falling. With all due respect to gooch, he has no explanation for this, there isn't one other than this is the resource extraction business, it is the nature of the beast. Oil deposits don't act like a tank you just stick a pipe into and start pumping it out.

If you look at the rig count numbers field by field and also overlay the production field by field this is so obvious its sickening that anyone even denies it at this point. We have more than 30 years of historical data to look at, its been the same time and time again.

Depletion in the old giant fields has to be replaced not by a handful of new giant fields but by a swarm of reworked old wells and smaller new discoveries in places that were overlooked before.It does seem that way doesn't it?! But why do you think that giant discoveries aren't being made? They are - but they don't make the news. Perhaps you have heard of the Jack discovery made last year? Here's a link to a publically available story. (http://www.iht.com/articles/2006/09/06/business/oil.php) Here is another from Chevron (http://www.chevron.com/news/press/Release/?id=2006-09-05). It was known about for years. Chevron admits to atleast 2004, but rumors have been churning since the late 90's. It's existance was kept in-house until it was successfully drilled in 2006. The industry needed some good news, so some partnerships were formed to spread the risk, and they drilled it and went public the discovery.

Just like Jack, there are other discoveries of this size and larger. Companies aren't going to disclose where, lest their competition gets to it first! And what would happen if it hit the news that the world was awash in oil? Wouldn't the price collapse? Nobody wants that!

Jack is just a single "pool" of oil in a large "trend" of similar geologic formation. Given the geology of the area... I would speculate the "trend" rivals what than the Saudi's have. There is no hurry to drill it, though, we don't need it TODAY. When we do it will still be there - it's been there a loooong time already!

Let me put it this way... I don't know any deepwater GoM petrogeologists that are nervous about our future ability to produce oil and natural gas.

ChipSeal mentioned the other point, that the projected demand for oil might soon outstrip even an increased supply. In other words, we can easily burn up every drop of oil you can produce and still come back at the end of the day whining that it isn't enough and it's way too expensive.That certainly is a very valid SHORT TERM concern. Long term is a bit different...

I think you will have a hard time finding an arugment for NOT cutting demand from anyone - EVEN WITHIN THE OIL INDUSTRY. Why? Because, the faster you have to produce oil the more expensive it is. In the oil patch SPEED COSTS MONEY. Think of this in terms of exploration. If I'm looking for oil and I have TIME... I can use ONE drilling rig to go and look for it. If I don't have TIME I need TWO or more drilling rigs to go and look for it! So my cost is doubled and my profits are cut in half! What the industry would like to see is a STEADY price and healthy (not excessive) demand. Historically, we've had neither.

As for it being expensive... just curious are you in the US? Because we in the US ARE particularly spoiled to cheap energy prices. We don't complain about paying $63.00/bbl of bottled water. We don't complain about paying $189.00/bbl of milk. We don't mind spending $1,120.00/bbl of Starbucks coffee. But hoooly moooly that $85.00/bbl oil sure is expensive! I don't know much about those other industries, but I'd bet its cheaper to produce bottled water, milk and Starbucks coffee than oil. People whine about the cost of oil, but last I heard Starbucks was still doing a heck of a business. I'd expect people in economic hardship to give up Starbucks long before oil and gas.

With your permission, I may be asking you additional questions in the future.Sure!

do you think deep water and arctic would be sufficient to replace the drop
with other suppliers? What about Brazilian deepwater?There are TREMENDOUS opportunities in deepwater GoM. No one's gone after a lot of it (though it's known to exist) because the start up investment is so high. However, some of the smaller independents are moving that way. ATP Oil & Gas (http://en.wikipedia.org/wiki/ATP_Oil_and_Gas) is a good example. Their Gomez developement was really creative by converting an existing drilling rig into a deepwater production facility. They did it very cheap, very fast, and very creatively. Every employee got a new Volvo as a bonus last year! They are a tiny company, but their success has turned their stock red-hot. (This is NOT an endorsement!) Now they are working on atleast one or two more deepwater developments from the inflow cash of the first job and stock sales. It's a neat business model.

I think drilling in the arctic and ANWAR is more about political posturing than good energy policy. We don't need the oil out of these places... if we do some day - drill it. It can be done in an environmentally safe way. But why bother? The oil's not going anywhere. Until then, just let it be... how much is there? Not that much judging by the lack of interest the oil companies have shown.

I don't know much specifics about Brazil. I know there's a lot of work going on down there, because I'm waiting on some construction equipment and vessels to come back from there for a project in the GoM!. :D I also know that Petrobras has been very good at putting their eggs in the right baskets, so to speak.

Dave.

Big oil co's have been doing two things for the last few years, one is buying other companies out to maintain their reserves, afterall, a publicly traded oil co is worth only what it holds in reserves, the other thing they've been doing is stock buybacks and diversifying into other areas.......you don't do this if there's still lots of easy to get oil to exploit.Who's bought who? BP has SOLD all of their shallow water GoM assets to Apache. Despite the rumors, no one has bought Anadarko. Anadarko bought Kerr-McGee, but that to keep K-M from going t*ts up. Niether are a major. No one's bought Devon, despite the fact they are now the largest independent. Man, they've got some nice plays right now. Yet no one has bought them. Stone has bought a bunch of stuff, but if you are calling Stone "big oil" then I'm confused. ERT has bought a BUNCH of properites, but they are all junk. That's their unique business model. I just can't can't think of any acquisition of a decent sized independant by a Major in the last few years. Who are you talking about? Am I forgetting some?

It does make sense that "Big" oil is buying back their stock. Business 101. When you have a bunch of cash, you buy back stock. It drives the stock price up, and you resell the stock later for more cash than you re-purchased it for. If you are awash in cash its what any widely traded company would do. You don't let it sit around or the politicians will tax it!

Remember when oil was $20/bbl? Exxon would have made a lot more money bottling water at $1/gallon. Any wonder these guys want to diversify to hedge future risks of price decreases? I suppose if you assume the price only goes up it doesn't make sense... but how well did that assumption hold up in the real estate market? History tells us the oil is EXTREMELY cyclical...

Maybe I'm missing something? But to me it seems a stretch to infer that these actions imply that there is an oil shortage.

Those idiots at PEMEX had their oh sheot moment like 3 years ago, guess what, they didn't act on it and now they are F'd. Just like the US did 30 years ago when they had the news and data in their hands that oil production was gonna start falling no matter what. Well, they tried, and it fell anyway, and its still falling. With all due respect to gooch, he has no explanation for this, there isn't one other than this is the resource extraction business, it is the nature of the beast. Oil deposits don't act like a tank you just stick a pipe into and start pumping it out.Nope, no explaination because I have no idea what you are trying to say. If you are saying PEMEX is incompitent no argument here. If people are surprised that PEMEX cooks the books and lies about their reserves, well, I'm not one of them. They don't even pay their bills!!!

Dave.

gooch you keep dancing around one very basic fact here, oil fields deplete, we live on a finite planet.............

the US oil industry on the continental 48 is running at an average of around a 98% water cut, the fields are very very very well into DEPLETION..........oil production is falling, has been for 30 years, this is what happens, you can't deny it, nobody can

you wanna talk about the jack play, ok let's do that, now how big is that compared to the massive giant texas field now 30 years into its depletion curve? its PUNY, this is the point, this is the fundamental nature of the oil business, the fields are getting smaller, tougher to extract and the quality of oil is getting worse

simply put, BIG GIANT oil fields are not being found, 15GB jack which had to set world records just to drill it isn't big, the world uses 25GB per YEAR, we need to find fields which are in the neighborhood of hundreds or GB of oil, last giant field found was like 40 years ago

this leads to less oil production, that is all peak oil is about, nothing more, nothing less, the world won't run out for a long long time, but in the meantime we will reach a point where production is gonna peak, and based on geology and the basic nature of the resource itself, we are pretty close

you see your acting like there is plenty of oil to find so peaking cannot possibly be an issue, problem is yet your ignoring everything else

peak oil does not mean more oil won't be found, does not mean oil co's won't continue to make a profit at it, all it means is that it is a FINITE resource and collectively the oil industry will reach a point where they cannot lift worldwide production, and it just happens to roughly coincide with the point where about 50% of the world's endowment of recoverable oil is reached

the oil industry is not the only one that faces this same issue, the coal industry hit its peak in the US back in the late 90's, other mining industries are in the same predicament, this is how resource extraction works

back in the day when Hubbert predicted US peak he was ostracized, then it turns out he was dead on, funny thing was, right about the time US production started faltering the rig count spiked, people denied it, they drilled frantically, but oil production kept right on falling...........this has played out in every depleted field on the planet, and several countries have made big bets on it not happening only to get burned bigtime

denying peak oil is like denying depletion happens LOL

drill ANWR, drill all the offshore sites, drill them all, it isn't going to change the end result, the scale of the problem has come up against the facts of geology and physics

the US starting importing oil back in the 70's, we now import more than 60% of it, we import gasoline and other distillates too, about 1.5 mpd of finished product........you don't resort to this kind of thing unless you have to, domestic oil co's ran out of room to lift oil production here long long ago, ran out of realestate, and this same deal has been happening to all the other countries as well.........this is OIL DEPLETION

60 top producing areas on the planet are in decline, there are no replacements in play which can match it, sorry, there aren't any miracles out there to make this go away.

shortage? not yet, not that we can see from our end, but the increase in prices has priced some right out of the market, that will continue, and the price is gonna keep right on climbing unless some serious demand for oil is removed, but then again, the US has had an oil shortage since the 70's, that's why it imports the majority of its oil

wanna convince people otherwise, here's what needs to be done:
map out all the existing fields and their situations
map out all the upcoming projects
then do an accounting of what the situation is now and what it looks like going forward

problem is, this has been done, and the verdict is oil production isn't gonna be climbing anytime soon, probably never, but hey, if you've got solid concrete info to the contrary take it to the appropriate forum, they would love to hear from you, problem is the people in the oil biz already there already concede the situation isn't looking good

Gooch: "We don't mind spending $1,120.00/bbl of Starbucks coffee. But hoooly moooly that $85.00/bbl oil sure is expensive!"

Whoops... it's $92/bbl now... but never mind. Wait until it's $185/bbl, maybe it will start looking expensive then.

BTW Gooch, on behalf of everyone on this planet with an IQ in the three digits, I would like to ask you to stop making this ASININE comparison between crude oil and Starbucks coffee. Look out your window and what do you see? Motorized transport, moving people to their jobs that they need to earn their livelihoods and moving necessities to stores all over the far flung suburbs of the world. Does that transport run on:
a) Oil
b) Starbucks coffee?


BTW, the Jack field? BFD. AT MOST, we'll be able to extract 15GB of oil at mind boggling expense.... for a world that consumes 25GB a year and is seeing falling output from the North Sea, Cantarell, Ghawar....

Look at how we live. Look at how our economies are structured. Look at how our cities are structured. Look at how our food is grown. We NEED oil to live the way we do, and production peaked in 2005. Oil prices of 50, 60, 70, 80... have not been enough to spur producers to produce more. Why not? Because they can't.

For people who are interested in an *intelligent* analysis of peak oil, I found the article at econobrowser to be quite good.
http://www.econbrowser.com/archives/2007/10/why_is_oil_abov.html

Here is the fundamental problem. Oil producers work day-to-day on finding production. They seek to replace only about as much as they use. Why? Because finding it requires almost as much money as it does to produce it.

The United States was once an exporter of oil. Now it's an importer. Something like 58 per cent of America's oil is imported, putting that country at the mercy of oil producing nations. When a country needs to import most of a resource it badly needs, it's in an uncomfortable position. Remember OPEC in the 1970s.

Of all the countries from which the U.S. imports oil, only Canada has a stable government that is friendly to the U.S. That's even more disturbing.

If the oil were out there, would it not make sense that the oil companies would try to find as much as possible in places where messy international politics was not an issue? And would it not make sense for the U.S. government to contribute signfiicant amounts of money to find oil sources at home?

...We NEED oil to live the way we do...
Yes, but do all of us really need to live the way we do? There may be some good, satisfying alternatives to the currently fashionable car dependent lifestyle. If some of those ideas can be made practical for more people, it might help relieve some of the pressure on oil producers and consumers alike.

I don't think gooch said that the future oil supply would be unlimited and too cheap to meter. Unfortunately, it's all too easy to take what he did say and use it to advocate for energy complacency.

Yes, but do all of us really need to live the way we do? There may be some good, satisfying alternatives to the currently fashionable car dependent lifestyle. If some of those ideas can be made practical for more people, it might help relieve some of the pressure on oil producers and consumers alike.

No, we don't need to live this way. (I cycle/take transit to my 6km distant workplace myself and am quite happy to do it). But the costs of adjustment, ESPECIALLY in the United States, will be wrenching and economically cataclysmic. It is not easy to turn a suburb into bicycle paradise.