Peak Oil and why low oil prices are bad

Chris Nelder (http://www.getreallist.com/) provides a lot of good data and interesting analysis on Peak Oil such as the article below. Peak Oil will become a reality if a new energy source isn't found very quickly and can be implemented on a very large scale. Solar - not feasible yet on a very large scale. Wind - not quite there yet. And both of these have issues with how to store the energy. Transmission of the energy is also an issue. Nuclear - I don't see that as viable for the US - too political. Fusion - won't happen anytime soon (might take another 100 years). Oil is going to be needed (and lots of it) for the foreseeable future. But if you read articles on Peak Oil it's starts to get kind of scary. We'll see how Peak Oil plays out over the next 20 years (or much sooner according to people like Chris).

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Therefore it will take some years before investment returns to the levels needed to support future supply flows against what we know to be serious decline rates. Lead times for oil and gas projects are long, and industry responses to economic news usually lag by six months or more.

Under-investment is precisely what the IEA warned about in its recent World Energy Outlook report, in which they said the world would need to invest over half a trillion dollars per year for the next 22 years just to maintain current supply levels. (See “IEA Oil Report: ‘Time is Running Out’” for my analysis of the report.)

I find it hard to imagine any scenario under which that sort of investment is made in current production while the world is going through a global recession and economic contraction…let alone the $35 trillion the agency believes will be needed to meet energy demand and carbon control targets by 2030.

This recession will ultimately set up an “air pocket” in supply. As the global economy recovers, say 18 months from now in mid-2010, and energy demand returns, we could find ourselves without the ability to increase supply because we didn’t make the necessary investment today.

By 2010 we will also have reached global peak oil (the “all liquids” peak). The earth will finally say “She can’t take anymore, Captain, I’m givin’ ‘er all she’s got!”

http://www.getreallist.com/why-low-oil-prices-are-bad.html