# Peak Oil

Thread Starter

#### joeyd999

Joined Jun 6, 2011
4,465
The world is currently drowning in a glut of cheap oil.

Someone remind me, please: when's that "peak oil" supposed to happen?

#### dannyf

Joined Sep 13, 2015
2,197
Peak oil is built on the notion, 100% true may I add, that we are consuming oil (and other natural resources) faster than they are being "manufactured" by mother nature so that their is naturally a point where we are going to exhaust oil reserves.

I don't think there is any dispute on that basic notion.

What you are observing today about oil is driven by multiple factors, none of which invalidates the peak oil theory:

1) geopolitics: the saudis want to hurt the iranians and the russians, supporters of the assad regime which the saudis want to topple. The Iranians and Russians (more so) are very dependent on oil export so the Saudis pumping out gobs of oil will hurt both countries ability to sustain Assad;

2) economics: the saudis want to squash the US output of oil / gas production, prompted by high oil prices. I think low oil prices have largely achieved their goal there, but over the long term, the US' technology and reserves act as a ceiling for oil prices;

3) supply and demand: slow downs in global economy, particularly in China, severely hurt the oil producers, especially when the elasticity of the supply curve is steep due to Saudis' expenditures on overseas military activities and their domestic welfare programs.

That's particularly painful when China is shifting its energy import to Russia, thus hurting the saudis and the oil prices in the open mkt.

But that may happen soon. everyone in opec is realizing that the saudi strategy has not worked. It is likely they want to coordinate on production. Whether that will have an impact on the market, or whether such a hold will sustain among opec members, is a huge unknown, given that the iranians will soon be able to sell (eagerly) into the international market, and the russians would love to take shares away from opec due to the western sanction.

#### tcmtech

Joined Nov 4, 2013
2,867
In a way I don't really feel bad for many of the oil companies going bankrupt.

Most of them put themselves there by continuing to run like they had no end to their money knowing full well things could and likely would change at any time.

One thing I learned while working in the oil fields is by and large financial efficiency is not a commonly practiced concept despite the often times glaring need for it.

I have often looked at what I was seeing in our local oil fields and have thought that if even the most basic financial responsibility was practiced we could produce oil here at well under half our present average costs.

#### ronv

Joined Nov 12, 2008
3,770
In a way I don't really feel bad for many of the oil companies going bankrupt.

Most of them put themselves there by continuing to run like they had no end to their money knowing full well things could and likely would change at any time.

One thing I learned while working in the oil fields is by and large financial efficiency is not a commonly practiced concept despite the often times glaring need for it.

I have often looked at what I was seeing in our local oil fields and have thought that if even the most basic financial responsibility was practiced we could produce oil here at well under half our present average costs.
Wow, well that's nice to know. At least maybe that shows a way out for our oil companies.
This might be the time for someone with deep pockets to build the infrastructure. It pains me to see that night time picture of all the gas burning, not to mention the oil transportation.