Robert Sczech

Market Power, Asset Allocation and Oil Price

The production of crude oil in the US is declining since 1970. We produce today roughly 50% of the amount of oil we produced in 1970. That decline of production happened despite lots of drilling and the usage of the most sophisticated pumping technology in the world. It has little to do with politics but a lot with the geology of the oil fields. The remaining US oil to be pumped yet is less than 20% of the oil the US was originally equipped with before the oil bonanze started. In other words, we already used more than 80% of our own oil. What is left, could power our way of life for less than 5 years if imports were not allowed. Energy independence is a delusion.

It is a great tragedy that this simple truth, 30 years after the onset of the production decline, is still unknown to the educated people of this country.