I agree that Knustler and the other catastrophians have most likely got it wrong.  But that hardly makes peak oil a non-issue.

$ per mile
If the mere price of Fuel is your perogative, then technologies like Coal-to-Diesel, which put up Twice the CO2 as normal Diesel start to look like good solutions.

CO2 per mile
When in reality, the real need is to lower carbon emmisions.

_

And the waters become even more muddy when you start to mix in "Energy Independance from foriegn nations"


-David Ahlport

Geologic peak is what the original Hubbard linearization refered to, and it's what we got (more or less) in the mainland US.  It's what happens when development is relatively unconstrained by political or regulatory factors.

Geopolitical peak is what you get in the modern global stage.  We could certainly pump more oil than we are currently doing, if not for wars in Nigeria and Iraq, environmentalists opposing access to ANWAR, political machinations within OPEC, etc.

Geopolitical peak is the real-world peak.  It's a question, not of how much oil we could theoretically produce, but the maximum rate we actually do produce.  I suspect that we are there now, or very close.

One consequence of the dynamics of oil geopolitics is that it will tend to enhance the plateau effect -- the tendency for the production curve to be flat on top, rather than sharply peaked -- because changing politics and economics allow one region to increase its production, which offsets decline in another region.  This is very helpful, in the sense that it may give us a period of high, but not catastrophic, oil prices in which to adapt away from oil dependence.  However, rah-rah techno-optimist articles like the one linked above do nothing to encourage this shift.  Instead, they would have us believe that it's all hunky-dory, until we wake up and find that we really have fallen off the back side of the plateau.

Remember, no one credible debates the reality of peak oil.  The only question is, when?

No, not at all. The available evidence from the US energy Information Administration indicates that conventional oil production reached a maximum in May 2005 at 74.15 mbpd. Production of total fossil fuel liquids (including natural gas liquids, ethanol, shale, etc.) reached a maximum in July 2006 at 85.47 mbpd. All of the "supergiant" oil fields are in decline.

The million dollar question is, can drillers produce enough from smaller fields to make up for that? Can they squeeze enough out of aging oil fields to make up for that? And can they do that at the same time that global demand for oil is shooting up?

No one knows for sure, but there are compelling arguments that the answer to those question is "no." Ignore at your own peril.

If we look two or three or four decades into the future, we know that hydrocarbons alone will not meet the needs of a growing world economy. Even with all the technical expertise the world could offer and all the political will it could muster, eventually, we will run out of oil. And, even before then, the price of a dwindling supply will be prohibitive. At present, our world is overly focused on, and overly dependent upon, one source of energy. And that path is unsustainable.

... We cannot meet future demand with hydrocarbons alone. Period.

Remarks by U.S. Energy Secretary Samuel Bodman, Nov. 13, 2006

Look kids, the pattern is clear.  Every time some crazed "internationalist" group starts pounding the End of the World drum, you can expect:

(a) The World will not end
(b) They will be discredited
(c) They will find some other reason for Gloom and Doom.

As Green Engineer said, there is agreement that peak oil will occur. Both the oil companies and CERA, the consulting firm, from whom most of the ideas in the article are taken, agree that peak oil will occur. The question is WHEN.

Predicting peak oil requires looking at several opposing trends:

• Demand for oil. Everyone agrees that it has gone up, and will continue to do so in the absence of a recession.
  
• New finds. Everyone agrees that the rate of new oil finds has declined rapidly, and most observers are doubtful that huge new deposits will be found.
  
• Better technologies for extracting oil from existing deposits. This is what the NY Times article focussed on. Everyone agrees that new technologies help - the question is - how much?
  
• Inadequate knowledge of reserves. The Saudis and many other oil producers do not let outsiders verify their figures.

The problem with the article is that it only focuses on better technologies, without serious analysis of the various trends.  

There are many worrying events that were ignored.    Recently, the United Kingdom and Mexico have probably passed peak oil for their fields. The humongous Cantarell oil field in Mexico is in decline.

Notice who the sources of information are in the article -- they are all from the oil industry (except for a two-line quote from Kjell Aleklett of ASPO).  Is it necessary to point out that the oil industry is an interested party in this issue? Or that oil companies are very skilled at using public relations to advance their self interest?  

The talking points in the article are basically from an industry-supported consulting group called CERA, who released a report last November supposedly debunking peak oil.

Many rebuttals to the CERA report have been published.  CERA has not responded to any of them, nor has it engaged in a public debate even though it has been regularly invited to.

It is a scandal neither the New York Times, the Washington Post nor the LA Times have done in-depth or analytical reporting on Peak Oil (one exception - the NY Times magazine had a good survey about two eyars ago).

In contrast, the Chicago Tribune has run an outstanding series on the subject by Pulitzer-winning journalist Paul Salopek. The Cleveland Plain Dealer ran an excellent multi-week series on the energy problem, for which it received recognition from the Columbia Journalism Review.

All in all, the NY Times story was a disappointing performance from a usually good energy journalist.

Bart
Energy Bulletin

Bart
Energy Bulletin

There's a downside to the advanced recovery technologies like steam/CO2/seawater injection and horizontal drilling, which the article entirely fails to mention.
Using these technologies may or may not increase the total percentage of the reserve that is recoverable at a given price point.  That will depend on the field geology and type of oil.  But they will allow you to extract whatever you can extract faster.  This can mean that a field is very productive, until it peaks and starts to decline.  When that happens, they tend to fall off very fast.  The North Sea, for example, has been declining at about 15% annually for some time now.  It was a relatively recently developed field that used all the latest technology.  TANSTAAFL.

Stuart Staniford at The Oil Drum suggests that the impact of peak oil on the global economy and civilization will depend greatly on the worldwide depletion rate post-peak.  I agree.  Post-peak depletion rate is everything, in terms of how well (or if) we can handle peak oil.

High-tech oil extraction could allow us to put off the peak for some years, and keep ourselves on the bumby plateau that we are currently on.  But that peace likely comes at a price, which is a much higher post-peak depletion rate.  If we don't use the extra time to prepare for the downside, we may find that we made a deal with the devil.

But more important, enhanced oil technology spews huge amounts of additional CO2.  With water/steam the recovered oil is often 90% water which requires even more fossils burning for distillation.  I do not have the numbers in hand but once calculated that $10 billion in solar steam hardware would be required for Kern County (Bakersfield, CA) enhanced oil recovery.  Enhanced oil recovery and refining is a very dirty business.

Another reason to be skeptical of "clean coal."

grist.org

Peak oil was supposed to have happened twice in the 1970's then several times in the 1980's, more in the 1990's and now, here we are again on another rampage.  

If it makes you feel better, and you think you have some reliable statistics, say whatever you want.  All I do know is that sometimes these "reserve" estimates are manipulated by the Big Oil companies so as to increase their stocks, profits, and bottom line.  In many cases it has also backfired on them (e.g., re-stating profits due to double counting reserves, findings, and holdings).  

Perhaps the best thing to celebrate would be 5 years when the US hydrocarbon market shrinks (in terms of 100,000 barrel units or thousands of metric tons or better yet, carbon equivalent).  This would be due to conservation and new alternative energy sources.

I wouldn't call that peak oil - I'd call that cause for celebration!
sammie

Onward through the fog

Secondly, you are correct that there is a great deal of confusion about reserves.  Some of it is due to the natural opacity of the subject, with political and economic motivations just complicating things further.

Thing is, as I understand it, the method that Hubbert used is based on past production data, and allows you to predict the ultimate recoverable reserve and date of peak.  So discussions of reserves, while not irrelevant, may not be as important as people think.

Sadad al Husseini, former head of exploration and production for Saudi Aramco:  

• "The huge oil and gas reservoirs in the [Middle East] can become only more peculiar and complex with time and maturity.  They are already generating a wide range of technical challenges that are often similar to the challenges encountered elsewhere in the world but on a scale that dwarfs previous experiences."

• "The worst thing that could happen is to confuse ourselves and the public with too much spin about unlimited energy supplies at cheap prices, alternative fuels on a global scale, or energy independence in a matter of years.  That kind of thinking simply dilutes our focus, defers the tough solutions that are needed today, and sets us all up for more future shocks and economic disruptions."
  

But when you compare it to global warming,
Thats where you're wrong.

We can't switch out atmospheres quite as easily as switching what we put in our gas tank, or what type of car we drive.

-David

-David Ahlport

On a related subject, may I ask why, if "peal oil" happened in the 1970's, we're producing more today than ever in the history of mankind?  

I'm not defending Big Oil, and in fact and I am petitioning the government to get the rigs (seismic testing now, not fun) out of Laguna Madre, one of the few hyper-saline but ecologically sensitive bays in the entire world.  Look it up if you're interested.  

But that is not a peak oil issue - that would be common sense.

Onward through the fog

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

the theory being debunked is that it's happened already or about to happen or that it's going to lead to major catastrophe. The answer to all seems to be no, no, and no.

According to a Feb 28 article in Platts:

A draft US Government Accountability Office report finds that, though it
is difficult to assess whether the world has reached "peak oil," a large
number of experts surveyed for the report believe the world may have reached
the peak for conventional petroleum supplies, said Representative Roscoe
Bartlett, Republican-Maryland.

Peak oil is a complex issue with important implications for the environment, politics and the economy. We all wish it would go away, but it won't.

Bart

Bart
Energy Bulletin

The third point, regarding catastrophe, I'm willing to concede.  Knustler, etc, have far too little respect for human deviousness/cleverness at getting what we want, now, and damn the cost.

Obviously, if they are having to scrape the dregs out of previously unusable oil wells, or we have to drill from the ocean floor, it's a sign that they are getting a bit more desperate.

Obviously Peak Oil isn't going to be an instant market shock.  Rather it will be a progressive racheting of the price of oil.

The peak just means that we're halfway, not empty.

All this article is saying is that the "sudden market shock" was bunk.

However if anything Peak Oil has actually vindicated the concept that the next half of the oil is going to be much harder to get at than before.

-David Ahlport

And Saudi hasn't let anymore outside the country investigate these claims for the past 60 years.

If it turns out that they aren't telling the truth, and have over-claimed the ammount.

Then this whole thing goes out the window.

-David Ahlport

I think that's going to have alot to do with depletion rate, and also market dynamics right around the time that peak is finally widely noticed.

A very high depletion rate (15% annually, say) will make it very difficult to maintain our transportation infrastructure.  A 15% annual depletion rate would mean that the world's production of oil would be cut in half in about 5 years.  That would be very hard to adapt to.  Probably not the end of civilization, but rationing for sure, and likely martial law.  And chaos in poorer countries, where only the elite would be able to buy fuel at all.

Localized (in time) market dynamics may also have alot of impact, though the ultimate reasons may be psychological.  Let's say we have a (global) recession that lasts 5 years.  The annual oil output slowly drops, but no one cares because the recession has reduced demand.  Then the recession ends, and boom starts, as sometimes happens.  The oil producers go to turn up the tap and... nothing happens (even if there is more potential production out there, it takes time and investment to bring on stream).  I suspect the psychological impact on the markets would be rather devastating.

Granted, these are both unlikely circumstances.  But far from impossible.

Which obliviously implies that, that also means that "Our Oil Price problems are solved."

Which just shows how badly people understand economics.  i.e:
http://pag.csail.mit.edu/~adonovan/dilbert/dilbert-19-02- ...

-David Ahlport

On the other hand, it is true that peak oil (end of cheap oil) puts more stress on our civilization. But thinking about it intelligently - that's not easy to do.  One person who seems to be doing it is Thomas Homer-Dixon of Canada in his recent book, The Upside of Down:

The Upside of Down sets out a theory of the growth, crisis, and renewal of societies. Today's converging energy, environmental, and political-economic stresses could cause a breakdown of national and global order. Yet there are things we can do now to keep such a breakdown from being catastrophic. And some kinds of breakdown could even open up extraordinary opportunities for creative, bold reform of our societies, if we're prepared to exploit these opportunities when they arise.

Thomas Homer-Dixon is Director of the Trudeau Centre for the Study of Peace and Conflict at the University of Toronto.

-Bart

Bart
Energy Bulletin

If anything, it makes it more plausible that peak oil is here or coming very soon (if it didn't already happen in May of 2005).

Are we really supposed to believe that mentioning enhanced recovery in a few small fields (Kern in California and Duri in Indonesia) balances out the mounting evidence that peak oil is at the latest very soon?  Give me a break.  These fields are chump change compared to Ghawar, Cantarell, and the North Sea, which are all in decline.

Just look at what's being said in the article...

The oil industry is well known for seeking out new sources of fossil fuel in far-flung places, from the icy plains of Siberia to the deep waters off West Africa. But now the quest for new discoveries is taking place alongside a much less exotic search that is crucial to the world's energy supplies. Oil companies are returning to old or mature fields partly because there are few virgin places left to explore

Oil companies have been...injecting all sorts of exotic gases and liquids into oil fields, including water and soap, natural gas, carbon dioxide and even hydrogen sulfide, a foul-smelling and poisonous gas.

Does this look like an industry that is swimming in an ocean of oil or does it smell of an industry increasingly desparate to suck every bit of oil they can from their dwindling wells?  You tell me.

but the theory being debunked is that it's happened already or about to happen or that it's going to lead to major catastrophe. The answer to all seems to be no, no, and no.

I second the several skeptics of Jason's above quote, and I ask you, Jason, if the answer to the question of whether peak oil has already happened or is about to happen is emphatically "no," why hasn't world oil production reached higher than its level in May of 2005?

Just because oil didn't peak in the 1970s doesn't mean it's not peaking now.  In fact, one of Matthew Simmons's arguments is that Saudi Arabia's racheting up production to make up for Iran's sudden, post-Islamic Revolution decline in 1979 and the early 80s seriously harmed the future productivity of those Saudi fields.

I hate to break it to you, but a few case studies of minor oil fields and a few quotes from impartial oil optimists does not constitute the "available evidence" on world oil production.

What a sloppy blog entry.

I think in real terms the price of oil (measured by average price over the year) will not be greater than $65 a barrel during any year over the next 5 years (unless there is another major war in the Middle East).

Takers?

By the way, saying that oil prices are going to rise or that oil exploration is going to get more expensive over time is like saying the sun rises in the East- so what? The economy can and will handle that. What Peak Oil predicts is catastrophe- rapid increases in prices- and I will put my money on the fact that that is wrong.

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

....but this is a false comparison. Scientists can directly measure atmospheric [CO2].

I bought a 45 mpg car, and would love to drive an even more efficient model, were it available.

I grow my own food and have learned to store it, so I don't have to participate in the oil-drenched food system.

I travel by train when I can, rather than airlines. AND I am a strong advocate for substantial investment in public rail infrastructure.

And soon I hope to invest in ground-source heat pump technology to heat my house.

You can place a competing bet by doing nothing, at your peril.

And the average price, as determined in what fashion, or from what source?  (Given that the spot price moves minute to minute, it's a valid question.)

Basically, there is no reason for big oil firms to start diversifying into alternative energy sources if they did have the end in sight, WHILE reaping the largest profits of recent years. I do not have that much faith in their benevolence. Also, as several bloggers have commented, there is no reason to try to get more out of old wells unless there are no more new sources.

To be precise, the problem is not that there are no new sources.  It's just that all of them come with big liabilities (political, economic, regulatory, etc).  There's probably lots of oil in the deep water of the Gulf of Mexico.  Getting at it is now technically feasible, which wasn't true even 10 years ago.  But it's still not easy or cheap to drill in 2 miles of water and 5 miles of rock!  Reviving existing wells is often cheaper.

In particular, a user called Memmel says :

"I bet you 500 dollars that KSA [Saudi Arabia] will state this year they feel that 70 is a comfortable floor for oil prices."

So he'll take a bet on a $65 average in a flash.

Another bet you might want to take on board :
Stuart Staniford says :
"I'll bet $1000 with the first person who cares to take me up on it that the international oil agencies will never report sustained Saudi production of crude+condensate of 10.7 million barrels or more."

[This is a more sophisticated bet : this is what the Saudis claim as their current sustainable production level, and they are committed to increasing their spare capacity.]

Hoping to see you soon on theoildrum...

• Making a bet
• Faith in the market

I agree with Green Engineer about The Oil Drum (TOD) -- it's a great source of ideas and information. Unfortunately, it tends to techno-speak, leaving the rest of us frustrated and puzzled. I would suspect the TOD demographics lean towards the over-35 crowd, with a high percentage of technical professionals.

Grist and Gristmill are much better at reaching a wide audience.

To me, the problem is how to explain the ideas of peak oil

• Clearly, to a non-technical audience
• Meaningfully, to show why po ideas are important, and how they relate to environment, economics and politics

Incidentally, I think Green Engineer does a good job of explaining technical concepts!

Bart / Energy Bulletin

Bart
Energy Bulletin

Peak oil is a very technical subject, once you get past the basic concept.  My own understanding is gestalt at best: I'm a geek, but not on the same level as Stuart Staniford, WestTexas, Robert Rapier, etc (at least not where oil is concerned).

I think the interesting question there becomes "what do we really need to teach a non-technical audience, so that they get the essentials without being confused by the technical details?"  Or, to put it another way, "How can we make a complex issue simple, and still make it true?".  That's the question that has dogged climate change activism all these years, and I think that An Inconvenient Truth's most remarkable accomplishment was finding that fine line and walking down it effectively.

Organic compounds are part and parcel of solar matter.   Life doesn't evolve from inorganics -- organics are basic to planetary mass.   These proto organics "bubble up" from the interior.   Along the way, coal, oil and methane are created.

In this way, oil is inexhaustable until the entire mantle of the earth is used up.

Hopefully we'll have found a better way by then...

Yes, that's the question. A lot of these hyper-technical debates are of interest to geeks (me included) only and have very little in the way of policy implications.

The vast bulk of people are not interested in oil or oil reserves as such. They're interested in what they need to do, at an individual and collective level.

So whether oil's going to peak today or in 2030, or whether oil will stay at $65 for 10 or 20 years before rising to $80 or $100, is mostly irrelevant for a broad audience.

This, to me, is the take-home message:

We urgently need to reduce our reliance on oil.

I don't know any respected person involved in the peak oil debate who holds a position that would render this basic point false.

grist.org

The issue, of course, is that alot of "respected authorities" (as judged by media access) don't necessarily deserve the respect accorded to them.  CERA, in particular, is to peak oil like CEI and AEI are to climate change.

As to abiotic oil: It's an entirely discredited theory, just the sort of crap that I've grown to expect from jabailo.  But it's also irrelevant: even if the oil is being made down there, if the rate of production and upwards percolation does not match (or at least approach) our rate of consumption, then it's irrelevant.

If abiotic oil is true, why hasn't Texas had a resurgence of production?

1. There is debate about known/potential reserves that I am no expert in but there doesn't seem to me to be definitive evidence that we have passed the 50% point

2. The key point- and this is what the public cares about- is whether the transition from oil to other fuels with be relatively smooth or occur through a huge world recession and collapse- all indicators are that the former is more likely- the futures price of oil is not through the roof (and probaly 25% of the current price is speculative and/or due to political instability- not low supply), drilling is accelerating, alternative energy is entering the mainstream, and I have no doubt that we will have major breakthroughs in the coming decades.

3. In summary, Peak Oil makes bold predictions about catastrophic change-that's the centerpiece of the argument- I think the available evidence says they're wrong. I stand by that, but I may be wrong too.

I think you are oversimplifying the position of the peak oil community, by equating all peak oilers to catastrophians (of whom Knustler is probably the most prominent).  In reality, there is considerable variation of perspective.   (Also see here for an expansion on the taxonomy.)

J.S.

Economic Illiteracy Harms The Planet! www.voicesofreason.info.

Otherwise,
If oil companies aren't having to expend their own dollars to make up the difference in the price, then the price of oil could indefinantly be below 65$ until we burn the last drop.

-David Ahlport

In Texas, carbon dioxide will be used to force more oil out of the 1930s-era Means field.

New techniques revitalize old oil wells

Given that every single geologist and geophysicist (regardless of views on when peak will occur) agrees that it will only be recognized retrospectively (as the US peak was not recognized until some years later), the fact that we didn't get an e-mail from the earth in December 2005 saying that it had passed peak is not too surprising.  

The bottom line is that even if we've peaked already, there's no reason that it should necessarily be apparent yet.  And even if the optimists saying that peak is at 2011 are right, that still just means that, on our present course, we'll just use the time to ratchet up demand even further, using up what's left even faster while filling up the atmosphere with even more greenhouse gases.

One of the smartest guys I know, a former co-worker with his physics Ph.D and years of experience in energy research, sent this to his family and friends tonight.  Anyone who wants to throw their lot in with the economists and the idea that we can have an infinitely expanding economy in a finite world should stop reading here.  Those interested in a reality-based world view are invited to read on and to consider what this sage guy has to say:

=======
Hi Friends & Loved Ones,

I send you this link to an Energy Bulletin story of the first magnitude, since it is the first case of a major city's adoption of a broad-scope plan to re-localize an entire city because of the imminent peaking of world oil and natural gas supplies.  The story contains a link to the actual report, which is now final following preliminary release in January and incorporation of public comments.  Since peaking of oil - actually the descent of oil supplies - will affect everything in our industrialized, suburbanized lives, the plan impacts every single operation anywhere in the city and then some.

At this point in time, world oil supply has been flat (unchanged) for the past year and a half in spite of a frenzied attempt to drill and develop more and more fields and areas.  The sad truth is that all the supergiant fields are now in serious decline, and there's just not enough money in the world to bring on new small fields fast enough to compensate.  It is 30 years too late to work toward a gradual transition to what comes next, so now we just have to adapt by somehow using 2-3% less oil-based energy each year starting soon, with 5%+ declines coming around a decade later.  The Portland target of achieving 50% reduction for oil and natural gas in 25 years is reasonable and is very close to what I think will happen whether we choose it or not (50% loss of supply in 20 years).  By 2050, we'll be lucky to have 20% of our present oil-based life.  I've been reading and teaching this stuff in an introductory level physics/energy class for 3 years, and I'm sure of the numbers and threat level, notwithstanding the peak oil skeptics funded by Big Oil (similar situation with climate change skeptics).

URL for the E.B. story:  (a quick read) - http://www.energybulletin.net/26922.html

URL for Portland Peak Oil Task Force:  (also a quick read) - http://www.portlandonline.com/osd/index.cfm?a=150007& ...

URL for the actual report:  (86-page pdf document)  http://www.portlandonline.com/shared/cfm/image.cfm?id=145 ...

The final report is very little changed from the preliminary report, which my students and I reviewed very carefully while also scanning for changes we might have to make to apply it to Bellingham.  The executive summary is a quick 3-page read, and the introduction is worth scanning also to get a true idea of the scope of changes we must all face starting in the next 1-5 years.  The report is the result of an extremely intensive effort by a large number of people in the Portland area over the last 10 months.  It began at the grass-roots level with a petition to city council, and city council took ownership when they passed a resolution establishing the task force to do research and prepare a report.  To me, it looks extremely thorough, and pretty well written for a committee effort.

My general prediction is that peak oil consequences will clobber the world (and absolutely hammer the U.S.) during the first part of this century, and climate change may deliver some terrible, currently unexpected (in Rumsfeld's "known unknowns" category) surprises starting 2-3 decades from now - late in the being-hammered phase.  A good book to read for those potential really scary climate change events is the very recent "With Speed and Violence" by Fred Pearce - easy to read and very well explained science background, based on careful interviews with world-class climate specialists (and this is world-class science reporting).  These 'tipping-point' possibilities, because of the preliminary stage of research on most of them, generally don't even rate honorable mention in the latest (2007) IPCC assessment report.  This is in accordance with IPCC rules of operation - to include in the assessment report only that science on which they can achieve consensus.

Finally, I promise not to bother you any more unless you request more information (such as other reading material, books, ...).  To me, it's a moral obligation (& I don't have many of those!) to spread awareness, but most of all our next generation needs to start preparing for this future.
 ======

The 5% Project

2006 world oil production was completely flat with respect to 2005. How can this be, in a world experiencing strong economic growth?

1) The simplest explanation, for an economist, is that supply simply couldn't keep up with demand, therefore price rose until some actors were forced out of the market (power cuts and disruption in the Third World).
If this is the case, then it doesn't matter whether the constraints came from a lack of oil in the ground, or from logistical or political factors... unless it can be demonstrated that these constraints have been lifted, we can only expect more of the same.

2) A more complicated explanation is that the price went up because the market got spooked, despite an abundance of supply. In this scenario, Saudi Arabia then suddenly decided that the new price of $60 suited them fine, and started withholding supply to keep the price at this level... whereas for decades before, they had regulated their production in order to keep the price as low as possible... in order to forestall substitution of new energy sources.

In either case, you are right that the new price levels are a powerful stimulus for substitution. The only nuance is that you clearly believe that the transition will be smooth, i.e. that any decrease in world production will obligingly wait until we're ready for it.

I suggest you check out the profile of Mexico's oil production and exports. One giant field (Cantarell) is crashing. The loss of production is so great that, despite bringing more fields into production, their exports are crashing too. Imagine the same thing happening to Saudi's giant field, Ghawar. Either it's already happening, or it will happen soon.

Be afraid.

Alistair, it's not me that's proposing the bet.  It's Jason, and I have a half a mind to take him up on the bet as well, given we talk about specifics.

I am an Oil Drum user (under the same moniker) but there are not enough hours in the day for me to follow it regularly.  For a lot of the articles, you have to dive in, not just gloss over them like you can with some of Grist's.

Speaking of hours in the day, it's already 3:30 AM and I gotta go to work "tomorrow".

I suggest you check out the profile of Mexico's oil production and exports. One giant field (Cantarell) is crashing.

Yes, but, the reason?  Burdensome government taxation:

More than half of the company's revenues were taken by taxes last year, so you can see why. (In 2005, it faced an even bigger tax bite!)

In terms of exploration and production, Pemex invested $14 million in 2006 and plans to invest $16 billion in 2007. But that's not enough. Last November, Pemex said it needed to invest $18-$20 billion a year. What's more, the company has $5.5 billion in debt coming due in 2007.

http://www.marketoracle.co.uk/Article476.html

In fact, if I were a cunning corporate Pemex exec, I think I might "reduce" production to force the Government off my back.  

... oh you really meant that seriously?

... you realise PEMEX is wholly owned by the Mexican government ? i.e. profit = tax...

In a few years, when Saudi oil output is halved, we can rely on you to tell us that if only those dowdy Saudis would allow foreign investment, everything would be just fine...

Check the Saudi production profile on the Oildrum?

Or, to put it another way, ideology is no substitute for information.

I think we all know who I'm talking about here.