toobad41

How Does the Financial Crisis Affect the Peak Oil Thesis?

I spent over 40 years in oil and gas production. I've gone through booms and busts. I've survived. The boom is still going on. Peak oil is no longer a theory, it is reality. In the US exploratory drilling is for natural gas. Oil is in secondary recovery and will recover just the remaining 9% to 20% in various reservoirs. As oil price drops, as it has been recently oil operators will have to stop production on marginal wells. This is pure economics. They will switch to projects in natural gas with better up-side potential. When, or if, natural gas prices come down then they will re-evaluate those projects. To make a long story short, the oil and natural gas business is very cyclical but the cycles are beginning to happen more and more often. Hedge funds and commodities don't make it any easier. Maybe the Hedge funds are gone and petroleum products will find a more stable environment in supply and pricing.