Gregor.us Monthly for March, titled Saga North America and published Tuesday this week, takes an in-depth look at future North American Oil supply. It’s not a pretty picture. In fact, I’d advise politicians to start paying attention. Not only for the broader issues involved, but because I’m now forecasting a mammoth spike in the price of oil during the year leading up to the 2012 US election. I expect oil to hit a number above 200.00. And that should make for fireworks on the campaign trail.
200.00 dollar oil will not just affect domestic US politics, however. Because of Canada’s potential to increase supply, and, because of Mexico’s ongoing and spectacular supply crash, Washington will find itself trapped between climate policy with regard to the Alberta Oil Sands, and the loss of Mexican oil exports. Yes, that would be the complete loss of all oil exports from Mexico to the United States, by 2012.
An excerpt from Saga North America:
In Washington of course we find the most enduring, multi-decade lack of realism as it pertains to energy and energy supply. The current administration is no different… Given that the stimulus bill only devoted about 1.2% to Rail, with nearly 5.0% or more to Roads and Bridges, one is hard pressed to find any policy from the current administration that would help Americans reduce their driving miles… The bottom line is that Washington’s neglect of its own, depleted national energy supply in a country that is structurally married to liquid fuel transport is a big part of the reason the coming price spike will be so damaging. The extreme difficulty the administration presently faces in the financial crisis is a kind of preview of what’s to come when oil makes its next ascent well above the previous price high of 150.00. It may appear as ironic, but the North American country that has to import the bulk of its oil supply, the US, is also the least realistic about global oil depletion, and its ability to continue bidding for free market oil.
I doubt very much that people are aware that combined Canadian, US, and Mexican oil production reached its highest levels this decade when oil was trading at 30.00, and then fell to its lowest levels of production when oil was trading up towards 150.00. It is either amusing, or distressing, how many observers would prefer explanations of a mythological or nefarious kind with regard to oil’s rise this decade, when every step of the way it can all be more easily explained by geology.
My crisis window is merely 2.5 years away. I expect 200.00 dollar oil will be incoming, starting some time in Q3 of 2011.