Is $150 a Barrel Coming Sooner Than We Think?

Lord Oxburgh, the former Shell chairman says that diminishing resources could push price of crude to $150 a barrel, according to the U.K. newspaper The Independent.

There are as many ignorant scoffers today about Peak Oil as there were in 1956 when geophysicist King Hubbert predicted that U.S. oil production would peak in 1970. Hubbert was indeed correct. Who's word are you going to believe? The government? The Saudis? The present chief of Exxon Mobil? I'm inclined to believe someone like a Lord Oxburgh who can freely speak his mind. From the Independent:

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware.

In an interview with The Independent on Sunday ahead of his address to the Association for the Study of Peak Oil in Ireland this week, Lord Oxburgh, one of the most respected names in the energy industry, said a rapid increase in the price of oil was inevitable as demand continued to outstrip supply. He said: "We can probably go on extracting oil from the ground for a very long time, but it is going to get very expensive indeed. " (Read more...)

Oxburgh is no kook. His comments are well-balanced. His message is that the gusher days are coming to a close, and that it will become increasingly expensive to extract what's left.

Comments

[AlanBrochstein]

That is one of those predictions that really is meaningless due to the long time-frame. If oil essentially doubles in 20 years, that would represent about 3% annualized increases. We have had 7% annualized increases over the prior 20 years.

While many expect that energy prices could fall if the U.S. economy continues to slow or enters recession, the weakening dollar could create a big offset to demand considerations.

[Georealist]

A few things the unfortunate readers of this article need to know...
Lord Oxburgh (and I carefully read the article since he is a most esteemed member of the oil fraternity) believes Peak Oil (and he does NOT refer to it as suck) is likely a couple of decades off. He NEVER predicts a specific price within a specific time frame.
The Lord is a most conservative and carefully spoken gentleman...
very few prediction and much guarded optimism about the abilities of the market to meet demands.
I don't necessarily share those sanguine estimates..BUT..$150 oil (in todays relative value) would cause a recession of such magnitude that there would likely not be an American High School student left driving a car to school.

[Mmarrkk]

No student drivers....Is that such a bad thing???

[oilat150]

Oil will be 150 next year because 2009 is the 150 anniversary of the American petroleum industry. Let's hope that crude oil doesn't also go up to $150.00 per barrel by next year because then there will be no reason for the average person to celebrate 150 years of the oil industry. However, crude oil at $150 on the 150th anniversary would be very ironic and infamous indeed.