WSJ article on Peak Oil

[Peak_Oil]

Mr. Rodgers, the PFC senior director, says he is convinced that Dr. Campbell's criticism is valid. He says oil production is either reaching a plateau or declining in 33 of 48 major oil-producing countries, including six of the 11 OPEC countries. Mr. Rodgers also points to a separate set of numbers. Over the past decade, he says, the percentage of major oil companies' exploration-and-production budget that has gone to exploration has dropped to about 12% from about 30%. That, he reasons, is because they have concluded that there aren't many more large caches of oil for them to profitably find.

"Despite the fact that we're in the highest oil-price era, the level of exploration is not increasing," Mr. Rodgers says. "The reason it's not increasing is that, in so many regions of the world, the fields have gotten so small that even though you might be able to drill a well and get a positive rate of return, the incremental value doesn't mean a lot."

Oil-industry executives reject this analysis. For one thing, publicly traded oil companies are required by the U.S. Securities and Exchange Commission to report their reserve additions in the incremental way that Dr. Campbell distrusts. That requirement, they note, reflects the reasoning that a pool of oil shouldn't be claimed as an asset unless its owner is able to pump it out. Being able to pump it out, in turn, means having developed the necessary technology, and having paid to put that technology into place.

More broadly, say peak-oil critics such as Mr. Lynch, whatever the truth about the past rate of discoveries of new fields, it's no sign of an impending geological limit. It largely reflects geopolitical constraints that have prevented the industry from fully exploring many oil-rich parts of the world, including Iraq and Russia. "It's a political change," Mr. Lynch says. "It's not geology that's causing that drop."

This is reposted on EnergyBulletin.net. Interesting, because it was front page on the WSJ. I've seen this stuff in the minor city newspapers, but never on such a mainstream source.

They never really get into the effects of this or address its importance in our foreign policy or anything like that, but maybe this is the start.

[hatrack]

1. I never thought Mr. Rodgers would bring tidings of oily doom!

Oh, not THAT Mr. Rogers!

Seriously, very interesting that this has reached the WSJ. Is there a link?