HouChron Editorial: Peak Oil "might have been reached" - May 3

Ye ol' oil press acknowledges, we're there... Mike

Editorial - Houston Chronicle

May 3, 2008

Plateau
Non-OPEC production of crude oil seems to have stalled, promising even higher prices at the pump.

The theory of peak oil holds that at some point ? a year from now, a decade ? global production of crude will peak, possibly plateau and then inexorably decline. On the eve of the Offshore Technology Conference here, the latest production figures for non-OPEC sources, 60 percent of global supply, indicate output has stalled at about 50 million barrels a day.

The flat production is particularly worrisome, because it comes at a time of record-high prices that ordinarily would stimulate production growth. As that has not occurred, the world's capacity to produce oil from conventional sources might have been reached.

The obstacles to increased production are many: Drilling costs have climbed. Trained workers are scarce. Production from older fields in the North Sea and Alaska is at 40 percent to 60 percent below their peaks. Most of the world's oil reserves are controlled by national oil companies and are out of the multinationals' reach.

Mexico's national oil company, Pemex, is incapable of developing new fields, but most Mexicans oppose any foreign investment in Mexico's energy sector. In Venezuela, President Chavez has made a hash of his country's oil industry, nationalizing some assets and mismanaging others.

The challenge for the multinationals can be seen in Exxon Mobil's latest production figures. Despite the incentive of oil selling for more than $100 a barrel, the company's production of crude fell sharply, sparking a tumble in its stock price. If the world's largest private oil company can't maintain, much less expand, its production in a climate of growing demand and high prices, the world is almost certainly courting a production shortfall in the arena that has been a consistent source of growth.

full: http://www.chron.com/...

I must say to the Chron, "well, duh!" At least they said it. Boone Pickens said it recently, Matt Simmons -- a Houston oil industry pillar -- said it long ago. Now, if our state government would get on the stick. The legislature's "interim charges" (homework between sessions) mentions nothing about energy conservation or reducing fossil fuel dependence.

But wait! The Texas Comptroller, Susan Combs, got interested in ethanol and oil prices recently. The Austin American-Statesman did a write up recently. The big news story featured 2005 oil and gas prices as if anyone would consider that current. Both have more than doubled since then. That change should alter the analyses a bit.

The Chron cites "production obstacles" including lack of trained workers. Never mind the skyrocketing costs of college. The Chronicle ought to mention the shortage of engineers working on alternative fuels and technologies as well, and how to remedy the dilemma.

Doesn't it seem odd that these news stories recommend drilling for oil and gas in wildlife refuges? On the other hand, they never recommend building an electric train network to reduce petroleum dependence in our transportation systems?

Do they really find solutions that mysterious and elusive? Or do they fear offending their big advertisers?