Sunday, July 26, 2015

Nonlinear: New York, London, Shanghai underwater in 50 years?

Those under the impression that climate change is advancing at a constant and predictable rate don't understand the true dynamics of the issue. The rate of increase of the carbon dioxide concentration in the atmosphere, the main driver of climate change, went from 0.75 parts per million (ppm) per year in 1959 to about 1.5 ppm each year through the 1990s, to 2.1 ppm each year from 2002 to 2012, and finally to 2.9 ppm in 2013.

The fear is that the ability of the oceans and plants to continue to absorb half the carbon dioxide human civilization expels into the atmosphere each year may have become impaired. That means more carbon dioxide is remaining in the atmosphere where concentrations are building at the fastest rate ever recorded in the modern era.

Permafrost across the most northern reaches of land on the globe wasn't expected the start melting until well into this century. Scientists were shocked to find gaping craters in Siberia where permafrost apparently is no longer permanent. It means carbon dioxide and methane--which absorbs about 80 times as much heat as carbon dioxide during its first 20 years in the atmosphere--will be unleashed from the melting permafrost much sooner than anticipated after being trapped for thousands of years. The release has the potential to speed up warming considerably.

Now comes what must be labeled as the most important story of the year that shows us yet more nonlinear dynamics in the world climate system. New research from James Hansen, the world's most renown climate scientist, and 16 of his colleagues concludes that many of the world's coastal cities could become "uninhabitable" in just 50 years due to a rapid, nonlinear rise in sea level. This is far sooner than previous findings suggested.

The new research takes into account paleoclimatological data and recent observations and modeling of ice cap and glacial melt. The research shows that rapid sea level rise has occurred in the past and is likely to happen this century because human-caused emissions are changing climate much more quickly and profoundly than during even previous periods of rapid sea level rise. The researchers state in several places that their methods may actually underestimate the speed of sea level rise.

To be fair, much depends on the assumed rate of ice melt. The researchers give a range of 50 to 200 years before water covers much of what are now the coastal cities of the world. Even 200 years is still astonishingly fast for 10 feet of sea level rise to occur. But, we should not dismiss the low estimate of 50 years. The history of climate change shows that we've underestimated its pace and severity at every turn.

In 1896 Svante Arrhenius, a Swedish chemist, was the first person to realize that human-created fossil fuel emissions might change the climate. He calculated that it would take 2,000 years to double the concentration of carbon dioxide in the atmosphere. The latest calculations suggest a doubling by 2050, only 154 years after Arrhenius' realization. The Hansen research also reminds us that the pace of warming is increasing: "[T]wo-thirds of the 0.9 degrees C global warming (since 1850) has occurred since 1975."

The researchers concluded that continuing with business-as-usual would mean 700 ppm of carbon dioxide in the atmosphere by 2100 compared to 400 ppm now and about 280 ppm in 1850. That would over time result in a sea level rise of 5 to 9 meters (16 to 30 feet).* In characteristic scientific understatement they write:

It is unlikely that coastal cities or low-lying areas such as Bangladesh, European lowlands, and large portions of the United States eastern coast and northeast China plains could be protected against such large sea level rise.

The current idea that limiting the worldwide average temperature increase to 2 degrees C will prevent a rise in sea level of "several meters" is mistaken:

We conclude that the 2 degrees C global warming "guardrail", affirmed in the Copenhagen Accord (2009), does not provide safety, as such warming would likely yield sea level rise of several meters along with numerous other severely disruptive consequences for human society and ecosystems.

If Hansen's new research is correct and possibly an underestimate as he believes, New York, London, Shanghai and myriad other low-lying coastal cities won't just have water lapping uncomfortably against their edges in 50 years. Large portions of these cities will have long since been abandoned or moved higher as water's edge creeps ever upward.

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*If you want to get a sense of what all this means, Takepart created a set of hypothetical "before" and "after" photos of major American cities based on 25 feet of sea level rise or about 7.5 meters--which is near the middle of the range of predicted ultimate sea level rise for the business-as-usual scenario mentioned above. Climate Central did an analysis last year of how a 10-foot rise in sea level would affect American coastal communities.


Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, July 19, 2015

Has U.S. oil production started to turn down?

The plunge in oil prices last year led many to say that a decline in U.S. oil production wouldn't be far behind. This was because almost all the growth in U.S. production in recent years had come from high-cost tight oil deposits which could not be profitable at these new lower oil prices. These wells were also known to have production declines that averaged 40 percent per year. Overall U.S. production, however, confounded the conventional logic and continued to rise--until early June when it stalled and then dropped slightly.

Anyone who understood that U.S. drillers in shale plays had large inventories of drilled, but not yet completed wells, knew that production would probably rise for some time into 2015--even as the number of rigs operating plummeted. Shale drillers who are in debt--and most of the independents are heavily in debt--simply must get some revenue out of wells already drilled to maintain interest payments. Some oil production even at these low prices is better than none. Only large international oil companies--who don't have huge debt loads related to their tight oil wells--have the luxury of waiting for higher prices before completing those wells.

The drop in overall U.S. oil production (defined as crude including lease condensate) is based on estimates made by the U.S. Energy Information Administration (EIA). Still months away are revised numbers based on more complete data. But, the EIA had already said that it expects U.S. production to decline in the second half of this year.

What this first sighting of a decline suggests is that glowing analyses of how much costs have come down for tight oil drillers and how much more efficient the drillers have become with their rigs are off the mark. It was inevitable that oil service companies would be forced to discount their services to tight oil drillers in the wake of the price and drilling bust or simply go without work. And, it makes sense that the most inefficient uses of drilling rigs would be halted.

But the idea that these changes would somehow allow tight oil drillers to continue without missing a beat were always bunkham promoted by an industry sinking into a mire of overindebedness in the face of lower prices. In order to maintain the flow of capital to the industry--which has consistently spent more cash than it generates--the illusion of profitability had desperately to be maintained. A recent renewed slump in the oil price may finally pierce that illusion among investors.

As Iranian oil exports start to ramp up in the wake of an agreement on nuclear weapons--the Iranians aren't allowed to have any--and the resulting end of economic sanctions, the oil price is likely to fall further, putting even more pressure on U.S. domestic drillers.

OPEC, which has refused to reduce output in the face of slackening world oil demand growth, continues to say that others--such as U.S. tight oil drillers--will have to "balance the market," a euphemism for cutting production in order to push up prices.

It looks as if U.S. drillers may finally be doing just that. Who knew that 45 years after abandoning the role of the world's swing producers*--that is, producers who adjust production up or down to maintain stable world oil prices--U.S. oil companies would be forced into that role again entirely against their will?

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*The state of Texas was the world's swing producer up until 1970 through a mechanism called proration. The state regulated the percentage of maximum flow from oil wells in order to adjust production and thus keep prices within a band that made drilling profitable without jeopardizing demand for oil. In fact, the proration program administered by the Railroad Commission of Texas became a model for OPEC.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, July 12, 2015

Chinese stocks: When mispricing becomes more important than pricing

Defenders of the free market faith tell us that price conveys a great deal of information, enough that you can base an entire economic system on it without any central planning or coordination whatsoever. Whether extreme devotion to this principle is wise may not be so important to determine this week as whether free market prices are actually available in many markets. Recent events surrounding the precipitous decline of the Chinese stock market are illustrative of this problem, but I'll come back to this a little later.

Years of suppressing the cost of credit through central-bank imposed near zero interest rates has led to the mispricing of anything that depends on credit. The list is long and includes real estate because mortgages are central to its purchase; oil because cheap bank loans and low bond rates financed otherwise uneconomic deposits of tight oil from deep shale deposits in the United States; natural gas in the United States for similar reasons; stocks and bonds because large investors often borrow to buy them; and cheap Chinese consumer goods made more and more available by cheap finance to build the factories that produce them.

The effect is not uniform, that is, cheap credit tends to make some things go up by stimulating demand for them such as real estate, stocks and bonds--while making some things go down such as the price of oil and natural gas because U.S. drillers got cheap financing which encouraged overproduction.

Which brings us to the curious historical irony of a nominally communist regime in China using public credit and regulatory maneuvers to reverse the trend of a crashing domestic stock market. The Shanghai Composite had been down 25 percent in just one month creating fear that the turbocharged Chinese stock market--which had risen 68 percent in one year and almost 150 percent in two--might be crashing.

The Chinese like many other governments across the globe are addicted to rising stock and bond prices in part because they believe the so-called "wealth effect"--that is, the desire by consumers to spend more because of perceived increases in wealth--has been a central factor in the post-2008 recovery. But perhaps more important, a market crash might not only reduce consumer spending a little, but also lead to a cascade of financial defaults and failures within the highly leverage global finance system. The result could be an economic depression, one that was supposed to have been vanquished by the extraordinary government and central bank interventions post-2008.

Ideally, a market is supposed to be a place where buyers and sellers come together to discover prices with minimal interference from government. And, discovering a fair price for something you own generally requires that you offer it for sale or that something very nearly identical already have a known price. The Chinese government simply halted trading for about half of all stocks on the country's two leading exchanges so that it became impossible to get a price on many stocks. A few days later the government forbade large investors--those holding 5 percent or more of a stock--from selling for the next six months. It's hard to know what someone will offer you for a stock, if you are not allowed to sell it.

This moment was inevitable. When prices are manipulated, eventually people catch on and the smart ones either buy if the price is too low or sell if it is too high.

I am reminded of economist Herbert Stein's pithy truism: "If something cannot go on forever, it will stop." The faith that stock and bond bull markets can go on forever precisely because central banks will make them do so took a big hit last week. After years of extraordinary government intervention directly and indirectly in the financial system, renewed bubbles in real estate, stocks and bonds worldwide started to look genuinely vulnerable last week.

The assumption that these bubbles can continue indefinitely or that they aren't bubbles at all finds its basis in the notion that these extraordinary interventions are now ordinary and will not be withdrawn.

There may be some truth in this. Worried about excessive speculation, China tried tightening flows to financial markets back in May. The government wanted to let some air out of the stock market bubble, but not pop it. The measures definitely let some air out, but too much, it appears, for the comfort of Chinese officials. Keep in mind that despite the recent drop, the Shanghai Composite is still up 90 percent in the last year.

Governments do not intervene in markets without reason. The reason given for the extraordinary intervention since the 2008 market crash is that a depression would have ensued without that extraordinary intervention which turned out to be on a scale never before seen. This claim is almost certainly correct. The question now is: Why almost seven years after the crash does such extraordinary intervention continue? Why are central-bank controlled interest rates still at or near zero percent? Is there something fundamentally wrong with the economy such that raising interest rates and withdrawing other interventions (as in a normal business cycle) are ill-advised?

I have an answer that entails a lengthy exposition that must wait for another time, but which I've discussed in part here and here. For now, I will say this: As the global regime of perpetual economic growth has stopped working as robustly as we want it to, the reaction has been two-fold. First, we've convinced ourselves that it is just a matter of time before things return to "normal." Second, we've loaded up on debt to bring forward that consumption that would otherwise be delayed in a slow- or no-growth environment.

The second step presupposed the first. But, as "normal" has failed to return, all we've been left with are some extra trinkets and the debt used to purchase them. The debt service subtracts from consumption, the economy sputters, business investment stalls in response, and cheap credit then flows away from productive investment and into speculation.

That's where we find ourselves today. If the Chinese stock market stabilizes here, there will be no shortage of commentators telling us that the recent rapid decline was just the pause that refreshes.

No one knows whether the vast credit bubble which now encircles the globe is about to pop. Perhaps it has many months or even years to run. The mispricing of stocks, bonds and real estate can get worse--much worse--before it gets better. That means that right now every investor is engaged in a high-stakes game of chicken--and most of them don't even know it.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, July 05, 2015

Lab rats and the corruption of how we count

There's an old joke about lab rats in which the teller says he or she secretly suspects that all lab rats are prone to cancer and so all research about the risk of cancer in humans based on tests in rats is likely useless.

The Committee for Independent Research and Information on Genetic Engineering, a European-based research group, thought it would look into such a possibility.

Last week the group released its findings and that joke became a reality. The diet fed to most lab rats is so laced with pesticides, heavy metals, genetically engineered feed and other man-made contaminants that lab rats worldwide are indeed at much higher risk of developing cancer and other diseases and disabilities just from the food they are reared on.

This doesn't necessarily mean that certain substances thought likely to cause cancer in rats and possibly humans now somehow don't. Rather, the study calls into question practically all safety tests which rely on these rodents. And, in fact, it suggests that the dangers of many substances and genetically engineered plants may have been underplayed.

The researchers point out that some studies purporting to demonstrate the safety of genetically engineered foods fed significant amounts of such GE foods to control groups of rats. These rats should not have gotten any GE food in order that their health profile could be compared accurately to those intentionally fed GE food.

And, even if the rats in the control groups don't ingest the chemical or plant being tested--as is the case in a proper study--they still get sick at abnormally high rates due to their diet. That can make substances being tested appear safer than they truly are because it is more difficult to sort out which effects in the test group are due to the substance or plant being tested.

The butcher's thumb on the scale has long been a metaphor for skewing results of laboratory tests and public surveys. And today, there are so many opportunities for "the thumb on the scale." This matters because it is difficult to know what to believe in a world that is so complex that we are obliged to rely on experts for much of our understanding about how the natural and human-built worlds work and interact.

This week we were treated to the good news that the U.S. unemployment rate dipped to a cheery 5.3 percent. But what's called the participation rate--the percentage of working-age people employed in the work force--hit its lowest level since 1977. So, fewer people looking for work in part accounted for the lower unemployment rate. This suggests that there are still a lot of people having difficulty getting work. The all-inclusive U-6 number--composed of those who've given up looking for work (so-called "discouraged workers"), those working part time who want to work full time, and those who've simply disappeared from the unemployment rolls after benefits ran out--that number stands at 10.5 percent.

Changing the definition of what we count without making that change clear to the public is always a promising tactic among those who would like to mislead us. As I have again and again pointed out, the way we count barrels of oil in the world is seriously flawed for two reasons. First, we count a number substances which are not oil. The marketplace is wise to this, for while governments and companies count these non-oil substances as supplies, companies cannot sell them on the world market as oil.

Second, we treat estimates of "resources" of oil which are based on very sketchy evidence as if these resources will be ready and available to humans whenever we need them at the quantities we want and prices we like. This infographic from the otherwise sensible Carnegie Endowment for International Peace claims that humans have access to 24 trillion barrels of "oil" (a word which must now be placed in quotes). We've consumed about 1 trillion so far. That 24 trillion barrels presumably amounts to a 500-year supply.

But the truth is in the fine print. Some 6.5 trillion barrels are labeled as "technically recoverable." This means they are not necessarily deemed "economically recovered." Only a small fraction of such resources will ever be extracted due to cost and logistical constraints. This number includes a substantial amount of oil from oil shale (actually from kerogen) for which there is no known economically viable extraction method. It is instructive that actual worldwide reserves of "oil" from oil shale currently stand at precisely zero.

Only Estonia has made consistent use of oil shale by simply burning its abundant deposits directly to make electricity. Efforts to extract unsubsidized liquid fuels from oil shale have so far proven elusive.

The 24 trillion barrel number is even more sketchy as it is called "oil in place." This includes hasty and poorly supported estimates for which there is typically no drilling data at all (except for the tiny fraction--1.6 trillion--that represents known "reserves," a much more rigorously supported number).

Only an even tinier fraction of the remaining oil in place will ever be produced. To date about 35 percent of all exploited oil in place has been extracted. That was the easy stuff. The number falls precipitously to 5 to 10 percent for unconventional oil such as tar sands and tight oil for which there are known economically viable extraction technologies.

Everything else beyond that is just fantasy. We should remember that for more than a century, people have been trying to figure out how to get "oil" economically out of so-called oil shale of which there are huge deposits in the American West. We are still waiting for a breakthrough.

Moreover, none of these estimates tell us at what RATE we might get these resources out. And as I have pointed out again and again, rate is the most important number. You may inherit a million dollars. But if the trust controlling those dollars limits you to withdrawals of $500 a month, you will never live like a millionaire. We are all living like "oil millionaires" in the modern age because of the rate at which we've been able to withdraw oil from the ground. There is no guarantee that this rate can climb continuously, and, in fact, the growth of the rate of extraction has slowed dramatically in the last decade as we now seek out more difficult-to-get sources of oil.

The numbers that come our way are calculated and disseminated by people who have an agenda. It may be to be as objective as they can be given the constraints under which they labor. It may be to satisfy the views of financial supporters of a think tank or university research laboratory. The information may be intentionally skewed so as to deceive us (even if there are no outright lies). Or the information may simply be mistaken.

Nassim Nicholas Taleb, author of several bestselling books on risk, says that a good rule of thumb is as follows: If the numbers come from somebody wearing a tie (Wall Street economist or analyst, industry public relations department, captive think tank academic and so on), you ought to be very skeptical. By design messages from these people are intended to move markets, move merchandise and/or move public policy and are not a comment on the state of the physical universe.

If, however, the person telling you the numbers is not wearing a tie (a physicist or chemist, for instance), then it is more likely that you are getting numbers based on the physical realities of the universe that are open to inspection and verification by anyone with the necessary skills and equipment.

(With women, who don't typically wear ties, but are now in positions to give us both useful and skewed numbers, we need to include warnings for numbers which come from women in business suits versus those more informally dressed, especially if they come from the hard sciences.)

It's not that we should never accept numbers and use them to guide our work and life. It's that we should always be on the lookout for the not-so-hidden agenda behind those numbers and make our own determinations and adjustments as necessary.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, June 28, 2015

Taking a short break--no post this week

I'm taking a short break and expect to post again on Sunday, July 5.

Sunday, June 21, 2015

Radio Interview: Nuclear and other alternative energy sources

In lieu of my weekly post, I'm posting a link to a radio interview I did recently. Doug Goldstein, host of the personal finance show "Goldstein on Gelt," brought me back for a return engagement to discuss the future of alternative energy including molten salt reactors. The show was broadcast on Israel's English-language radio network, Israeli National Radio. Click here to go to the page containing the podcast.

To hear my previous interview on the swoon in oil prices, click here.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, June 14, 2015

No, BP, the U. S. did NOT surpass Saudi Arabia in oil production

Even the paper of record for the oil industry, Oil & Gas Journal, got it wrong. With the release of the latest BP Statistical Review of World Energy, media outlets appeared to be taking dictation rather than asking questions about which countries produced the most oil in 2014.

If they had asked questions, they would have ended up with a ho-hum headline announcing that last year Russia at 10.1 million barrels per day (mbpd) and Saudi Arabia at 9.7 mbpd were once again the number one and number two producers of crude oil including lease condensate (which is the definition of oil). The United States at 8.7 mbpd remained in third place.

The most important question they could have asked is this: How is BP defining oil? It turns out that oil according to the BP definition includes something called natural gas liquids which includes lease condensate--very light hydrocarbons that come from actual oil wells and are included in the oil refinery stream--and natural gas plant liquids which come from natural gas wells and include such things as ethane, propane, butane and pentanes. Only a small portion of natural gas plant liquids are suitable substitutes for oil.

Production of natural gas plant liquids in the United States has grown rapidly as a result of increasing exploitation of natural gas in deep shale deposits, so-called shale gas. These liquids are useful, but they are not oil and only displace oil in a minor way. Moreover, their energy content is around 65 percent that of crude oil and so counting barrels of natural gas plant liquids as equivalent to oil is doubly misleading.

The second question media outlets could have asked is whether natural gas plant liquids can be sold as oil on the world market. The answer is a resounding "no." In fact, major exchanges accept neither natural gas plant liquids nor lease condensates as satisfactory delivery for crude oil. And, if we subtract lease condensate from each country's total, U.S. production will actually look relatively lower. It turns out that U.S. wells now produce a higher proportion of condensate as a result of growth in oil extraction from shale deposits (which tend to be rich in these condensates).

All of this leads my friend and colleague, Texas oilman Jeffrey Brown, to point out the following: If what you're selling cannot be sold on the world market as crude oil, then it's not crude oil. The implications are fairly obvious: The world has substantially lower oil production than widely believed, and growth in world oil supplies has slowed considerably in the last several years. Using the BP definition of oil, world production in 2014 was 88.7 mbpd. Using the stricter definition of crude oil including lease condensate, the number was 77.8 mbpd. Big difference!

Growth in oil supplies according to BP from 2005 through 2014 was 8.2 percent. Using the stricter definition, growth was 5.4 percent, which is down from 15.7 percent for the previous nine-year period. (Worldwide numbers for crude oil excluding lease condensate are not available.)

So, BP and the oil industry have one definition when referring to oil supply--one designed to create a rosy picture of the future--but must bow to the market's definition when they actually want to sell oil to somebody. Who would you accept as the better authority on what constitutes oil, the buyers or the sellers?

All this is not to deny that oil production in the United States is rising, and has been doing so rather quickly. But, this must be put in context.

First, although the United States produced 9.6 mbpd of oil proper for the week ending June 5 according the U.S. Energy Information Administration (EIA), it had net imports of 6.2 mbpd. (For comparison, OPEC reports that Saudi Arabian oil production as of May 15 was 10.3 mbpd.)

Second, even the ever optimistic EIA expects U.S. oil production (crude oil including lease condensate) to decline after 2020. This implies that the United States will continue to be a large importer of crude oil. One independent analysis based on actual well performance suggests that the EIA projections are probably correct in the short run, but far too optimistic in the long run. American production may not remain near current levels for very long and, in fact, may drop considerably in the next two decades.

It's difficult to call out the venerable BP Statistical Review of World Energy, especially when one considers that BP does this as a service to the world. The company spends money gathering and organizing data on all kinds of energy and makes that data freely available to anyone who wants it. On the other hand, we should recognize that BP has substantial U.S. investments, and this may color its view on the future of U.S. oil production. Downbeat assessments don't do anything for stock prices.

Perhaps the most important thing to remember about oil supplies is that oil is a worldwide market. It is worldwide supply that matters, and supply from every country needs to be seen in this context.

The current slump in oil prices has many believing that supply will continue to be ample in the long run. But, we ought to consider that the rate of oil production in the United States may be nearing its peak and that all of the production growth in oil worldwide since 2005 has come from just two countries, the United States and Canada. That should make us more cautious about projecting the triumphant pronouncements of one of the world's largest oil companies very far into the future.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.