I have been somewhat troubled by the whole concept of “peak oil” in that I think it is misapplied as to what may actually be going on.  Below are some excerpts from Doug Henwood’s newsletter Left Business Observer, Issue No. 111 — not available for reading on the net, sadly:

No doubt we will run out of [oil] someday.  But there’s still 40 years of it in the ground — and the industry isn’t trying that hard to find more of it.  Worldwide, about 2,700 rigs are drilling for oil; that’s doubled from the lows of 2000, but it’s still less than half the peak of 6,148 in 1982.  Major oil companies have kept their exploration budgets in check to please their stockholders, who prefer high profits to busy rigs.  Thanks to that tightfistedness, expertise and equipment are now in short supply.  The number of petroleum engineers in the U.S. — historically the home to much of the world’s talent — is half what it was 20 years ago. These human and material shortages are driving up costs and slowing down fresh exploration.

I’ll add here that this applies to refining capacity, too.  Oligopolies/monopolies always prefer raising prices to their customers to actually providing real service.

Henwood goes on to write about the politics of it, specifically,  

…[the] greens have embraced it, apparently hoping that we’ll react rationally, and finally come to our senses about SUVs, sprawl, and melting icecaps — providing a nice shortcut around messy political agitation.  That’s very optimistic.  It could be that fear of peak oil might inspire a furious rush to find more oil — and make dirtier fuels like coal and nuclear seem more attractive.

Indeed, what I’m hearing from the pols is precisely that scenario — ANWAR, coal and nukes.

So why go to war?  To protect the cheapness of the supply and thus uphold “shareholder value.”  And to pass that cost onto the working class, in taxes on their already meager incomes, and in their blood and the blood of their young — a little business secret called “externalization of costs.”

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