May 11th, 2008
How artificial is the crude oil price? Have we passed peak oil?
Here’s a map that purports to show how much oil there is in North America and that the supply far exceeds the demand. This website argues greed is driving the high oil price, not shortage. Wait a minute, isn’t greed the heart and soul of a free makret economy? What am I missing?
If there’s plenty of oil still under ground that would seem to confirm the argument of the “kill-environmentalists” school of analysis: if there were no government restrictions oil would flow like, well, like oil. There’d be plenty of oil to go around, and prices would drop. First let’s drill off Florida’s coast. I’d never go there for a vacation anyway.
But that lots-of-oil argument in turn seems to tromp all over any concern for the environment or any other species stupid enough to go anywhere near a petroleum refinery or wind turbine or high-rise antenna or any other structure we deem necessary for our lifestyle. Damn those ducks, anyway.
There’s a counter-argument to the lots-of-oil faith. We’ve reached peak oil and unless we’re willing to strip mine much of the habitable earth, we’re looking at energy shortages going forward. Higher prices all around. Matthew Simmons has been saying that “oil reserves” claimed by nations like Saudi Arabia are phoney. Would the Saudis lie to us, their faithful customers and allies? Surely not, you might say. Well, Warren Buffet has made a few billion bills looking at the economic realities. He thinks we’re short of oil.
Enough oil? Peak oil? Past our peak? Not only do I have no clue what’s true, neither do most people, including a lot of VCs and that keeps 1) the oil price high, and 2) the interest in cleantech high. Because nobody wants to sit in the dark, walk to work or have cold stew for dinner.
Meanwhile out there on the NYMEX, crude oil was up over 8% last week alone, now more than $125 per barrel for crude oil futures. The average US price for both diesel and gasoline stood at an all-time high last week. And oil traders, for the record, are claiming that petroleum demand is far ahead of supply. Naturally that plays into higher prices and bigger commissions and larger bonuses and…. This couldn’t be greed could it? Wouldn’t you really like to know if there’s enough oil? Can’t somebody come up with a system to actually find and measure the oil that remains? Sounds like a great start-up. OILFAX.COM. Seems to me the #1 cleantech software would be a way to track oil supply independently of the spin from the US Department of Energy, oil traders or the OPEC creeps. A real reading on oil supply might determine whether you buy into that wind turbine company.
A newsman since 1969, Harry Fuller has worked for CBS, ABC, CNBC Europe, CNET and was founding news director at TechTV. See his full profile and disclosure of his industry affiliations.
Subscribe to GreenTech Pastures via Email alerts or RSS.
