SATURDAY, AUGUST 27, 2011
Potholes on the Road to Peak Oil
What did Hubbert and Simmons miss?
Hubbert came out with the whole concept and Matt Simmons really popularized it five to six years ago. What’s important to understand is it didn’t take into account the unconventional potential and the improvements in technology. Unconventional oil and gas projects like the oil sands in Canada and the shale projects in the US are all now major sources of oil and gas, whereas 20 years ago they were concepts or in early-stage development. Five years ago, no one thought that there would be unconventional shale production in Europe. Well, it’s starting now and that’s going to change the energy dependence of European countries on Russian natural gas.Al Fin energy analysts say that the biggest problem with the idea of peak oil, is that no one can agree on its definition. That makes it quite difficult to discuss intelligently, since it has become such a vapourous circular tug.
What’s important to understand is that there is new technology coming on board that ten years ago wasn’t even conceptualized yet; now they’re producing, and in 20 years who knows what there will be. An investor must be aware of the changes, but also be careful not to get caught investing in someone’s science project. _Marin Katusa _ on _ HoweStreet
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