Energy Strategy Commentary
Andrew McKillop
Senior Energy Strategist
October 2007
Increasing Signs of Peak Oil Supply Pressure
Through October to date (Week 43), with increasing media attention, oil prices continued to surge. Even the key phrase “Peak Oil” was to be heard, here and there, and usually denied through the regular and standard claims there is always more oil, somewhere, but it hasn’t yet been brought to market.
On September 29, the Wall Street Journal ran an article with a gung-ho optimistic tone, under the headline “How Economy Could Survive Oil At $100 a Barrel – Compared to 1980, U.S.Is More Able to Handle Once-Unthinkable Rise”. This article, almost inevitably, dismissed Peak Oil as a near-term reality. It focused the small role of energy in average US household spending (about 5.5% compared to 7% in 1980). It then gave a long list of other politically correct ways to explain high oil prices. These included the weakening US dollar against other moneys, consumer disinterest in energy saving compounded by automakers who go on building huge cars, fast-rising oil imports by China and India, resource nationalism in producer countries like Kazakhstan, Venezuela and Russia, and of course tensions and pressures in the Middle East wracked by wars in Afghanistan, Iraq, Palestine-Israel, Turkish threats to Kurdistan, Russian threats to Georgia, deepening crisis in Lebanon and growing unrest in Pakistan. read more
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