It’s been so long that I posted about politics that I forgot how many comments a post like that will generate. I think I’ll do more of it.
In the comments to my post yesterday, ST suggested that the whole concept of "peak oil" is nonsense. Here is the comment that got things really going:
neither do the Brazilians, who just discovered a huge offshore oil
field. Some reports indicate that in 5yrs the field may be able to pump
about 80% of what Saudi Arabia pumps today.
‘peak oil’ is funny
to me b/c about a year ago the Saudi Oil Minister said that we’ve only
tapped about 18% of the world’s KNOWN proven oil reserves. Of course,
that was before the big find in the Gulf of Mexico this spring; &
before this HUGE SCORE by Brazil.
This topic is important for a whole host of reasons, but a small one is that my covestor portfolio is long oil related assets. My friend Mark has a macro view that oil is going up not down and he’s made a lot of money with that view in recent years. This chart shows pretty clearly that Mark’s view has become the conventional view in the past year.
But what if ST is right? What if there is a ton more oil in the ground and we aren’t close to tapping it out? Well that might be good news for those countries like Brazil and Mexico that may have a lot more oil reserves. Not to mention Russia and the middle east that are raking in money right now with oil at close to $100/barrel.
But it isn’t good news for the US who is a net consumer of oil to the tune of almost 14mm barrels a day. At $100/barrel, that’s $1.4bn a day going out of the US economy to other countries coffers.
So even if we aren’t looking at a peak oil scenario (and I honestly don’t have a clue about that), here in the US we had better get busy finding an alternative to oil because we are sending our money elsewhere at an unsustainable rate.