This article is a Peak Oil article in all but name (in my humble opinion, of course!) And where has it been posted? On the comment section of The Daily Telegraph, sometimes known as ‘The Daily Tory-graph’. (Actually, this paper has been very radical with some if its revelations in recent years. For instance, it was the first to spill the beans on MP’s Expenses for which it did a huge public service!)
The comment focusses on the Greek sovereign debt crisis and the adverse effects it has had on the world financial markets. It then goes on to warn that there is a bigger shock waiting to happen – the rising price of oil. It does review the impending confrontation with Iran, which could push the price of oil through the roof when the Straits of Hormuz end up being shut in response to a possible Israeli-US air strike.
However, the writer Liam Halligan points out that high oil prices are something more than just the result of geopolitical issues. It is actually as a result of supply and demand. Demand for oil, as he quite rightly points out, is very much on the rise, especially given the propensity for western countries to resort to quantitive easing (meaning that there is too much money in the system chasing too few commodities, including crude oil.) Then, as I stated myself the other day, you have the new emerging economies of China and India who now have a growing demand for oil consumption.
He then mentions the supply side and points out that the rate of decline of discovery of new oil and gas fields since the ’60s has been steep. The reality is also that super-giant oil fields in countries such as Saudi Arabia have now reached their production peak. What I also liked was his shrewd observation re the tar and shale discoveries. Despite the hubris spoken about these by others, he points out that the EROEI is really quite low – making them expensive and inefficient (plus there are environmental issues as well.)
Hmm, I’m not the only one to think this as well then! Another one in the eye for the Peak Oil-deniers methinks?