<<<So, it is correct for those articles to focus on when the peak production for oil is reached.>>>
Not in the context being used in the articles I've seen. There's a huge difference between "peak production" and "peak capacity". Production will match demand as leaving the oil in the ground is the best place to store excess inventory. When OPEC cuts production, it isn't because the oil producing nations are running low on oil, it's because there is either a drop in demand, or a need to correct excess inventory on the market. The entire process is identical to tactics forbidden by your typical anti trust statutes.
Aside from the price fixing issues, there's a pattern to how oil companies produce oil that is pretty much determined by business economics. In general, oil companies will employ seismic companies when demand and prices are up to identify potential new reserves. Once a prospect has been identified, a number of exploratory wells will be drilled in order to prove the reserves. A half million dollars per well is a good ballpark figure on what it costs to drill a new well.
The oil companies invest in the capital expenditures to bring new wells online as dictated by supply and demand. You will never see oil companies producing at peak "capacity" for the simple reason it would be insane to do so from a financial standpoint.
Any argument based on actual production as related to capacity is false to fact. The wars currently being fought are the direct result of over capacity, and the inability of US and British oil companies to compete against those proven reserves not under their control.
It might be nearly accurate to say US and British oil companies generally try to produce at something close to capacity and that is near it's peak, but the reality is when large reserves such as Alaska's North slope, the Gulf of Mexico, or the North Sea are discovered, the US and British companies expect everyone else to cut production so they get first dibs on the market.
"Peak production" is an accurate description of individual wells or limited geographical regions, but has no relationship to global oil supplies. For the foreseeable future, production will always be at or near its peak and never close to capacity. On the other hand, unless a lot of people die, there is the potential for US and British oil companies to eventually be shut out of the market.
We're already dependent of foreign energy and have been for years. That's a permanent situation and can't be changed short of a huge shift to alternative energy sources. What would change is which Kenneth Lays get to rob the public piggy banks. |
