The return of peak oil

Unrest in the Arab world has left the oil market feeling understandably jittery

by Jasmine Budak

A reviving global economy and mounting unrest in the Arab world are stirring renewed fears about a long-term spike in oil prices. Earlier this month, as protests in Egypt peaked, oil hit a two-year high, prompting anxiety about a return to the $100-a-barrel days of 2008. And with Egypt not quite out of the woods, and uglier protests igniting in Bahrain, Libya and Iran, the oil market remains understandably jittery. (Last week, oil prices hit $90 a barrel.)

But renowned energy analyst Charles Maxwell, looking beyond the political turmoil to the more long-term pressures on oil prices, predicts oil could fetch $300 a barrel within the next decade. “We will begin to settle very slowly and gradually into a world in which we need more oil each year, but we can’t get more,” he said in a recent interview with Barron’s. The 79-year-old “oil oracle” has been an enduring advocate of peak oil, the theory that says demand will rise faster than the production capacity.

His latest forecast rests on growing energy demands by emerging economies such as China, India and Brazil. But unlike the severe hikes of 2008, when oil went from $60 a barrel to more than $100—and sparked fears of an energy crisis that would wreak havoc on everything from the airline industry to suburban car culture—Maxwell estimates a gradual, less economically damaging increase that will plateau in 2015, before oil production begins to recede in earnest by 2020.

Even though, historically, overly high oil prices have been blamed for triggering recessions, Maxwell resists a Chicken-Little scenario. He says the slower climb will force the world to get off oil once and for all. Natural gas, he says, with help from Alberta’s oil sands and some renewable sources, will ease the painful transition and bide us time to get into conservation mode and accept a future that will include nuclear energy.

Other analysts agree that oil will climb in the long run, though not necessarily as high as Maxwell predicts. However, the underlying reasons remain the same. As economies and GDPs grow, so do the requirements for raw materials, energy being the most basic of them all.




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The return of peak oil

  1. Only 2% of our oil omes from Libya, and they are jittery.What absolute BS.Its a ruse so they can put up our fuel!

  2. Only 2% of our oil omes from Libya, and they are jittery.What absolute BS.Its a ruse so they can put up our fuel!

    • s/b comes from Libya

    • "Only" 2%. Considering that we use every drop of oil that is produced every year, that 2% can put significant pressure on the market. The fact is, there is a finite supply of oil, and other oil producing nations cannot simply open their taps more to compensate immediately.

  3. s/b comes from Libya

  4. "Only" 2%. Considering that we use every drop of oil that is produced every year, that 2% can put significant pressure on the market. The fact is, there is a finite supply of oil, and other oil producing nations cannot simply open their taps more to compensate immediately.

  5. How terrifiyingly wonderfull it would be if every well ran dry yesterday…maybe then the oil and automotive companys would be forced to unleash some of those alternative energy patents they have had locked away for so many years

  6. How terrifiyingly wonderfull it would be if every well ran dry yesterday…maybe then the oil and automotive companys would be forced to unleash some of those alternative energy patents they have had locked away for so many years

    • Yes. And maybe they'll release the aliens from Area 51, Obama's Kenyan birth certificate and the cure for all diseases. Darn those evil, evil corporations.

    • Surprise – patents are not locked up. They are all public and anyone can read them. There are no alternative energy schemes being kept secret.

      • Actually, oil and car companies have been buying up alternative energy patents, so yes, they are public, but they are still "locked up" as none but those companies can do anything with them.

        • If they were useful, then someone would do something with them.

          This patent conspiracy crap has been going on for more than 20 years….

          After how many years does a patent expire? LOL!!!!!

          • Well, if the companies that own them would loose money from the new technology, I highly doubt it that they would do anything with it.

            A patent can be renewed.

  7. Yes. And maybe they'll release the aliens from Area 51, Obama's Kenyan birth certificate and the cure for all diseases. Darn those evil, evil corporations.

  8. Oil=Food
    Get ready for the famine, and it's related anarchy inducing symptoms.

  9. Oil=Food
    Get ready for the famine, and it's related anarchy inducing symptoms.

  10. Surprise – patents are not locked up. They are all public and anyone can read them. There are no alternative energy schemes being kept secret.

  11. Farmers need to cover costs too. If fuel costs push them significantly over budget, things will really begin to hurt.
    Maybe this will end the ridicules policy of growing corn for fuel.

  12. Farmers need to cover costs too. If fuel costs push them significantly over budget, things will really begin to hurt.
    Maybe this will end the ridicules policy of growing corn for fuel.

  13. Guess we had better start subsidizing clean energy instead of oil.

  14. Guess we had better start subsidizing clean energy instead of oil.

    • Wrong. Drill here, drill now.

      Misnamed 'clean' energy requires a lot of dirty work to be done, and then it just doesn't produce the power required.

      Evangelical environmentalists such as yourself should put all your money where your mouth is however, you can enjoy starving while freezing in the dark right now, no need to drag the rest of us down with you.

      • "Wrong. Drill here, drill now. "

        Great. And then our children will be in even worse predicament, because they won't have the oil we wasted like this. Speaking of children, the "drill baby drill" crowd sounds more immature than a kindergarten.

      • The 'easy' oil (see Beverly Hillbillies) is done. Gone. Saudi fields are now in decline and they are unable to control prices by turning on/off the taps. That's why the oil-sands are now viable. The only drilling in significant quantities now will be deep-sea …. dangerous and expensive.

        Your second paragraph is bang on though. But as oil declines, what other choice is there?

        "Evangelical environmentalists"? "Drill baby drill"? Hey …. aren't you that chick who can see Russia from her house!?

    • 1) oil isn't subsidized. It's heavily taxed. More than 50% of it's price is taxes in some provinces.

      2) in Quebec, we have clean energy (as clean as feasibly possible), but the enviro-hypocrites don't want us to exploit it (dams)

      3) Wind energy is stupid.

      4) Solar isn,t up to speed yet. We need A LOT more R&D

      5) Nuclear… well people confuse canadian technology with communist technology.

      So, unfortunatly, only oil is left….

  15. Wrong. Drill here, drill now.

    Misnamed 'clean' energy requires a lot of dirty work to be done, and then it just doesn't produce the power required.

    Evangelical environmentalists such as yourself should put all your money where your mouth is however, you can enjoy starving while freezing in the dark right now, no need to drag the rest of us down with you.

  16. I agree that there is current dilemma in building clean energy products. I would bet that 90% (or more) of these products use oil or oil related products to be built.

    We need a worldwide effort to save oil and only use the reserves for building new energy products until such a time as there is enough clean energy for everyone. (Yeah I know "It won't happen")

    One thing that most people forget is; What will replace plastic and rubber?

  17. I agree that there is current dilemma in building clean energy products. I would bet that 90% (or more) of these products use oil or oil related products to be built.

    We need a worldwide effort to save oil and only use the reserves for building new energy products until such a time as there is enough clean energy for everyone. (Yeah I know "It won't happen")

    One thing that most people forget is; What will replace plastic and rubber?

    • Best comment on here so far!

  18. Charles Maxwell's peak oil $300 a barrel call has nothing to do with the scarcity of oil and everything to do with the abundance of money.

  19. Charles Maxwell's peak oil $300 a barrel call has nothing to do with the scarcity of oil and everything to do with the abundance of money.

  20. "Wrong. Drill here, drill now. "

    Great. And then our children will be in even worse predicament, because they won't have the oil we wasted like this. Speaking of children, the "drill baby drill" crowd sounds more immature than a kindergarten.

  21. As oil prices climb, the incentive to explore/implement other fuel technology grows, and fuel-efficiency increases. Eventually, the alternatives make more economic sense. As these expand, demand for oil decreases, and existing reserves last longer. So…peak oil makes sense, peak oil catastrophism, not so much. There was a 'peak whale' crisis at one time, when cetacean populations were declining enough to jeoporadize whale-oil supplies: big surprise, synthetic oils came to the fore, whaling declined, and no crisis was realized. Worth noting.

  22. As oil prices climb, the incentive to explore/implement other fuel technology grows, and fuel-efficiency increases. Eventually, the alternatives make more economic sense. As these expand, demand for oil decreases, and existing reserves last longer. So…peak oil makes sense, peak oil catastrophism, not so much. There was a 'peak whale' crisis at one time, when cetacean populations were declining enough to jeoporadize whale-oil supplies: big surprise, synthetic oils came to the fore, whaling declined, and no crisis was realized. Worth noting.

  23. The 'easy' oil (see Beverly Hillbillies) is done. Gone. Saudi fields are now in decline and they are unable to control prices by turning on/off the taps. That's why the oil-sands are now viable. The only drilling in significant quantities now will be deep-sea …. dangerous and expensive.

    Your second paragraph is bang on though. But as oil declines, what other choice is there?

    "Evangelical environmentalists"? "Drill baby drill"? Hey …. aren't you that chick who can see Russia from her house!?

  24. Actually, oil and car companies have been buying up alternative energy patents, so yes, they are public, but they are still "locked up" as none but those companies can do anything with them.

  25. Best comment on here so far!

  26. The unrest in the Middle East over oil should do one thing, and one thing only – end our addiction to foreign oil.

  27. The unrest in the Middle East over oil should do one thing, and one thing only – end our addiction to foreign oil.

  28. If they were useful, then someone would do something with them.

    This patent conspiracy crap has been going on for more than 20 years….

    After how many years does a patent expire? LOL!!!!!

  29. 1) oil isn't subsidized. It's heavily taxed. More than 50% of it's price is taxes in some provinces.

    2) in Quebec, we have clean energy (as clean as feasibly possible), but the enviro-hypocrites don't want us to exploit it (dams)

    3) Wind energy is stupid.

    4) Solar isn,t up to speed yet. We need A LOT more R&D

    5) Nuclear… well people confuse canadian technology with communist technology.

    So, unfortunatly, only oil is left….

  30. Well, if the companies that own them would loose money from the new technology, I highly doubt it that they would do anything with it.

    A patent can be renewed.

  31. Time for everyone to re-read ‘Blood & Oil’ by Michael Klare to find out what we have in reserves on the planet and where on the planet it really is. Our driven-on-cheap-oil economic model was designed decades ago when cheap oil was plentiful and the USA was still producing a good chunk of its own supply. No plan B was put in place, and the time to come up with one was 30 years ago – not in the future when demand greatly exceeds supply. Our system needs petroleum to produce food – so, any price levels approaching $300 a barrel, or $200, or $150 means someone ain’t gonna be eating.

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