Resource Investor - Energy - Matt Simmons Answers Tough Questions About Peak Oil

By David J. DesLauriers
21 Aug 2005 at 05:10 PM EDT

TORONTO (ResourceInvestor.com) -- By now everyone, especially those who follow the resource sector, have heard the Peak Oil story. Matt Simmons deserves a lot of credit for the publicity he has generated on this subject, and his book Twilight in the Desert provides a detailed and fascinating account of the situation and how it may unfold.
Peak Oil

Peak Oil is a topic that has been covered extensively by Resource Investor. Tim Wood interviewed Matt Simmons in a popular story a couple of months ago, and the outlook of various other industry figures has been aired in these pages.

Pullback
Recently, RI highlighted the fact that after a more than 80% upward move in the past 12 months, the TSX Energy Index is beginning to pull back, possibly foreshadowing a correction (probably temporary) in the price of black gold. Despite the decline, awareness of the issue and investor enthusiasm towards the sector is robust, and everyone remains in agreement that the problem is not going away.

Naysaying the Alternatives
Indeed, believers in the Peak Oil thesis - and their ranks are swelling - have dismissed ideas about how hydrogen and other such sources of alternative energy like biofuels can offset the impact of Hubbard's Peak. There has also been very little enthusiasm or hope for massive international projects like ITER, the International Thermonuclear Experimental Reactor.

Question Period
Simmons, like it or not, has a legion of doomsaying followers, and recently the Washington Post hosted an interesting and informative online forum which allowed readers to put questions to this well-recognized proponent of the thesis.
( read more ... )

‘Peak oil’ coming, may mean trouble

By STEVE A. YETIV
Baltimore Sun

Published: Sunday, Aug. 21, 2005

Budget deficits explode. Inflation rules. Stock markets plunge. Houses foreclose. Great powers clash. This may be our future if we do not take more serious steps on energy than those offered in the energy bill that President Bush recently signed.

With oil prices hitting all-time highs and war raging in Iraq, serious concerns about "peak oil" slowly have appeared on the public radar screen. Simply put, peak oil refers to a key turning point when global oil production peaks and then begins to decline, signaling a future of dwindling supplies.

Analysts predict that the peak will occur between 2006 and 2011, that global oil reserves are far more limited than believed, partly because leading producers such as Saudi Arabia overestimate or obfuscate their oil reserves, and that we are headed for a massive energy crunch.

Such concerns may be exaggerated, but we still need to plan ahead more zealously. This is because whenever peak oil does arrive, it will likely produce three effects for which we are not prepared.

First, in the absence of serious alternatives to oil, oil prices will spike possibly to more than $100 dollars a barrel in anticipation that demand for oil will slowly outrun supply.

That could trigger a global recession or worse.

Even if rising prices spur research into affordable alternatives, it will take many years, perhaps decades, for the global economy to shift to them because oil penetrates all walks of life. We can't switch away from it overnight. Even if peak oil comes in 2020 or 2025, we are still behind in the race.

( Read more ... ):

'Peak oil' spells cataclysm for U.S., oil theorist warns

Sunday, August 21, 2005
ALEXANDER LANE

Think high gas prices are bad?

Get a load of what ex-oilman and ex-Princeton professor Kenneth Deffeyes believes are following closely behind:

'War, famine, pestilence and death,' he said, eyes wide and voice deep. 'We've got to get the warning out.'

The threat? Peak oil.

The term, probably unfamiliar to most Americans, refers to the time when the worldwide production of oil peaks and begins a rapid decline. From then on, this incredibly efficient fuel source, which still costs less than most bottled water, will be scarcer and more costly.
Highly respected sources, including the U.S. government, think that day is distant, and most mainstream economists think it won't cause much of a ruckus.

But Deffeyes says peak oil is coming in November, and could bring humankind to the brink.
( read more ... )