Tuesday, October 31, 2006

Peak a Boo


Just in case you aren't scared out of your PJs enough already,

Here is a headline from Reuters that is fitting for the day.

World oil production may have peaked-executive
Thu Oct 26, 2006
By Scott Malone

BOSTON, Oct 26 (Reuters) - World production of crude oil may have already peaked, setting the stage for declining output that could lag demand, a top advocate of the "peak oil" theory said on Thursday. (watch)

Matthew Simmons, chairman of Simmons & Co. International, a Houston-based investment banking firm specializing in the energy sector, said U.S. government data showed that the world oil supply has declined through the first half of this year.

Energy Information Administration data showed world supply of crude oil has declined to 83.98 million barrels per day in the second quarter after hitting 84.35 million bpd in the fourth quarter of 2005.

"If you basically have another six to ten months of that decline lasting, then I think for certain we would look back and say, 'Guess what? We actually reached a sustainable peak in crude oil production in December 2005,'" Simmons said at a meeting of the United States of the the Association for the Study of Peak Oil and Gas."

At the same meeting of ASPO, Robert Hirsch, the author of the famous Hirsch Report, gave this presentation. Here are a few of the key slides.

For what it is worth, my date is 2009 depending on whether or not a serious downtick is brought on by the declining housing market. Whether it simply needs to cool, or it is a giant balloon that is about to go pooohheee, the next few quarters will tell.

Peak Oil has become a bit of a cult religion.

So was Christianity.

Rome used to run the world.

Much like oil does now.


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