nerfer

The Self-Defeating Oil Surge

For geothermal - don't forget the major player in the U.S, Ormat (ORA). This is an overlooked field I think.

But don't confuse solar and wind (or geothermal) as an immediate replacement for oil - transportation sector will first need electric vehicles, since most alternative energies don't produce gasoline or gas replacements. (And fuel cells are off in the distant future with nuclear fusion).

The Self-Defeating Oil Surge

Goldman Sachs predictions are a lot more accurate than the government's own EIA dept. This is same and different from the 1970's. In the 70's we suddenly depended on rising imports from OPEC which was taxing their infrastructure improvements, so we depended on them and they saw an easy way to bring us to our knees. But that time it was politically motivated. This time fields are depleting and new fields being brought online are just replacing the declining production from existing fields. For the first time, supply doesn't meet demand, so price rapidly increases (it's not linear when people will pay whatever they need to in order to get to work - called 'inelastic' demand in macroeconomics 101). Doesn't take 50% increase in demand for 50% increase in price.

Iraq's reserves don't mean squat if they can't keep pipelines to the ports open. OPECs reserves in general are suspect since they were used to determine nation's quotas and were artificially generated. There's oil still out there, but it's not the easy, safe oil anymore in the volumes we need. We're more and more dependent on unstable leaders and inhospitable drilling environments as the best sources are being depleted.

Oil prices might decline to the $90 level before resuming their upward march, but we will never ever see $35-$50 oil again in our lifetime.

The Oil Shortage, and Other Fairy Tales

A lot of bluster here. I'm not sure what problem Mr. Davis has with Pickens. He's an oil man, not a greenie. His predictions have been good in the past, and he puts his money where his mouth is. That should be disclosed on news reports, but so should a lot of other things.

As far as the EIA chart on non-OPEC oil growth goes, EIA is known as having their head in their a$$ when it comes to oil predictions. Russia is apparently past peak production, yet this chart shows a big surge in oil production for them in 2009. Want to bet if that gets revised next year? We are at (very near one way or another) the peak in oil production right now. There will be choppiness in the energy market as people grapple with what the true numbers are (can't trust official OPEC reserves at all, but the fact is they could make a lot of money selling more oil right now, the incentive to cheat on their quotas, as they typically have done, is extremely high). The general trend is up, and will continue that way until a real recession takes away our energy demand. In the far future, conservation, electric vehicles and alternative energy will also reduce our demand.

I can't speak to the 2 mbpd consumption over production, since I haven't heard that bandied about before and don't know the full context. Obviously that can't be sustained without big changes in inventory, but neither side is giving numbers here to prove their argument.

If we want to avoid a repeat of the effects of the 70's oil embargoes, we shouldn't be wasting gas in SUVs while importing 60% of our oil (the biggest single item in our trade deficit) which also funds terrorists indirectly. It is certainly unAmerican to drive a big wasteful vehicle in these times!