Sunday, August 31, 2014

Long Live Peak Oil...

To anyone out there who says the peak oil theory is dead, please note the following:

1: The western hemisphere's largest infrastructure project is an off-shore oil project near Brazil with a projected cost of $237 billion. Yes, that is a "b".

2: That is more than three times the projected cost of the next largest project, the California High Speed Rail system, and almost as much as the US spends on all public infrastructure projects in one year.

3: According to one insider, the break-even cost on that oil is $110/barrel.

When the oil majors are already messing around with dregs like this, what are they going to be doing twenty years from now? Fifty? It ain't going to be pretty, whatever it is. We can either prepare for the inevitable production declines and price surges by carefully nursing our remaining oil reserves, or we can continue to drill-baby-drill until the collapse begins. Which policy is conservative, and which is insane? You decide.