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Gold/Mining/Energy : PEAK OIL - The New Y2K or The Beginning of the Real End?
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To: Jurgis Bekepuris who wrote (320)4/14/2005 1:29:06 PM
From: Doug R  Read Replies (1) of 1183
 
For your first question you have to distinguish between "oil shortage" and "fuel shortage" and pricing of fuel or oil.
Refinery capacity relates to fuel insofar as a shortage would go.
The heavy sour oil is less expensive/barrel but costlier to refine with less fuel obtained per barrel. Refining more heavy sour wouldn't help fuel prices...which is what will drag economies into recession.

As for the second question, if the world is at peak production now, just slowing growth won't help because we'd get farther behind the curve of supply reduction.
To avoid being behind the curve, a pretty deep recession would be necessary because oil production would be in recession.
If economic growth goes to 0...demand stops increasing but supply continues to fall.
It's a permanent negative growth situation just to avoid serious shortages.
Of course that's all IF we're past peak.
The US Dept of Energy says 4th quarter this year, projected supply will fall 800k barrels/day short of projected demand.
That kinda sounds like peak to me.
For 3% global growth to immediately shift to 1% contraction isn't gonna be easy nor is it at all likely and the longer it takes to go negative, the worse it'll get by the time recession is "officially" declared.
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