Wednesday, August 17, 2005

Yergin on the oil 'shortage'

If you're enjoying the massive increase in the profits of the oil companies caused by the conspiracy to force up the price of oil by talking about shortages and crises, you might not enjoy what Daniel Yergin has to say (my emphasis in bold):

"Our new, field-by-field analysis of production capacity, led by my colleagues Peter Jackson and Robert Esser, is quite at odds with the current view and leads to a strikingly different conclusion: There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day - from 85 million barrels per day to 101 million barrels a day - a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand."


"This is not the first time that the world has 'run out of oil.' It's more like the fifth. Cycles of shortage and surplus characterize the entire history of the oil industry."


"The growing supply of energy should not lead us to underestimate the longer-term challenge of providing energy for a growing world economy. At this point, even with greater efficiency, it looks as though the world could be using 50 percent more oil 25 years from now. That is a very big challenge. But at least for the next several years, the growing production capacity will take the air out of the fear of imminent shortage. And that in turn will provide us the breathing space to address the investment needs and the full panoply of technologies and approaches - from development to conservation - that will be required to fuel a growing world economy, ensure energy security and meet the needs of what is becoming the global middle class."

Yergin is the author of "The Prize", an excellent history of the oil industry. I wouldn't mind this oil-shortage scam so much if it was the first time they've tried it, but they keep pulling it again and again and we keep falling for it. Some people think the oil crisis of the 1970's was engineered in order to make the North Sea oil commercially viable, and thus keep Britain from going bankrupt. Technology keeps advancing, and higher oil prices just allow oil sources to be developed that were formerly not profitable. The big oil companies are making billions and billions of dollars in record profits, selling the same amount of oil as always, all on the basis of fooling us again into believing there is an incurable shortage. We're told that the price is going up due to supply and demand, when most of the increase is due to the falling real value of the American Dollar (another reason to start pricing oil in terms of a stable currency like the Euro). Since the main problem facing the world today is global warming caused by our burning too much fossil fuel, a shortage of oil is probably the best news the world could have, but we are unfortunately stuck with having enough oil for the foreseeable future. Of course, another foolish war on any country in the Middle East would change things considerably.