I'm a big fan of Chris's - but I think his argument/predictions have a critical weak link - almost all hinge on the assumption that the market price of crude - is a functional component of energy prediction and planning. His production cost assumptions are not verifiable - and don't agree with the oil industry insiders that I have discussed the subject of production costs. It has always struck me as suspicious why no one publicly reports the actual audited production costs of oil (especially public companies) - field by field, region by region, country by country - wherein a real avg. cost of crude oil and related energy product production can be determined. I suspect if they did report this we wouldn't be paying $4.00/gal for gas today.
I don't think that the world gives a damn whether the Saudi's or the Russian's or US oil producers have mortgaged their reserves in advance. Their lack of planning shouldn't and doesn't constitute and emergency for the rest of the world regarding high oil prices. In 1998 crude oil sold for $11.91/barrel avg. - and the majority of oil companies were making money - from that we know that the avg. crude oil production cost was well below that. As recently as Dec. of 2008 crude was $32.94, having ranged all the way up to 126.33 during the same year. Folks - the production cost of crude is far more constant that this kind of ranging and it is always well below the lowest market price. You don't see 300% changes in production costs from existing wells in one year - but you do in market price. (
http://www.ioga.com/Special/crudeoil_Hist.htm)
Sure, there will always be higher new tech costs and incompetent producers that go out of business when prices drop, but the point is that market price is neither an indicator of the costs, or the availability of oil - and never has been. Consequently, market price of crude is useless in real energy planning. To make the assumption that oil market price is anything other than producer (national or private) marketing decisions of how much the market will bear is exceptionally naive.
Not knowing and understanding the real cost of petroleum production when planning alternative energy strategies that must be competitive with petroleum, or changing national transportation strategies without this info - is a fatal deficiency. We have already seen high oil prices generate alternative energy ventures in the 1970s, only then to kill them by lower oil prices. I'm not saying that peak oil isn't a current problem, or that we don't need need alternative sources. I am saying that we have to know the cost that alternatives are competing with in order to make real business plans for them - and currently that info isn't widely available - if at all and what does exists requires independent verification. I would also think as oil consumers we might also want to know exactly how badly we are being ripped off to support oil producers failed budget planning and or luxury life styles. In addition, if oil is so precious not considering our existing oil and gas reserves as strategic resources and legally stopping their exports - is an exceptionally bad long term survival strategy.
