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To: MythMan who wrote (225903)	3/6/2003 1:31:19 PM
From: ild	Read Replies (2) \| Respond to of 436258

Date: Thu Mar 06 2003 12:36 trotsky (silverrain&Crmblr@Hubbert) ID#377387: imo Hubbert's work has clearly shown that there is much more to it than just price. the recovery of oil is primarily an energy equation and not a money equation ( i.e., it's not "how much money does it cost to reover one bbl. vs what is paid for it" but "how much energy needs to be expended to recover a bbl. of oil, and how much energy can be derived from it" ) . when Hubbert originally predicted that the peak in US production would be reached by the early 70's, economists and geologists alike derided that forecast and laughed him out of the room. sure enough, Hubbert's peak in the US was hit EXACTLY as predicted, and since then, production has declined by 2/3rds, again exactly at the predicted rate. since we have this uncontestable historical example of Hubbert's model working as advertised, there is no reason to believe it won't work w.r.t. the remaining oil reserves in the world. and the fact remains that those giant fields in the ME that supply the biggest share of global demand are all between 50 and 70 years old by now - and not a single giant field has been discovered since 1969 ( Prudhoe Bay ) . there are some crackpot theories out there contending that oil fields get magically 'refilled', but the reality is that oil geology and the processes that led to the formation of the known oil reserves are well understood to be a rare and time-consuming event. likewise the world's remaining reserves as well as the amount of oil yet to be discovered have been extensively modelled. note in this context that OPEC's reserves experienced a magical huge increase in the same year OPEC decided that production quotas would be based on reserves - iow, they're vastly overstated. however, official estimates largely rely on this overstated reserves picture. also, it is an uncontested fact that 4 bbls. are consumed for every 1 bbl. that is discovered. you don't need any fancy math skills to work out what that means. officially, the world is still complacent about the coming crisis. inofficially, the PTB are already moving to secure the biggest known oil fields by means of military occupation. note that OPEC's production in summa has already been in steep decline BEFORE the Venezuelan strike. no explanation for this huge plunge in production ( 11.5% in a single year, in spite of sharply higher oil prices ) has been forthcoming thus far. all i ever hear is that 'OPEC is producing at full capacity to make up for the production shortfalls'. and now and again, Saudi Aramco assures everyone that 'it would only take a phone call to raise production by 3m. bbl./day'. with the West's oil inventories at a near 30 year low and prices challenging nominal all time highs, what happened to the phone call? isn't it time it was made? demand growth is also widely underestimated apparently. China alone is a huge factor...it has changed the demand side of the equation extensively, and continues to do so. in a few years time it will displace the US as the biggest oil importer. it's quite likely that the industiral age is not the norm, but will turn out to have been a historical exception. great civilizations have failed before, what makes us think we're different? when Greenspan once said in House testimony that 'knowledge once gained is rarely subsequently lost' i cringed. there have been several notable periods in human history during which the bulk of previously gained knowledge was lost, most recently in the Middle Ages. the 'it can never happen again' argument is a polyanna lie, similar to the 'there will never again be a recession or a bear market' prediction by Mr. Dornbusch anno '98. and imo the decline of fossil fuels will be the key to the next 'dark ages' period.