Wednesday, July 18, 2012

Easy oil peaked in 2005, so oil has been redefined to keep investors fooled

Commentary: How Changing the Definition of Oil Has Deceived Both Policymakers and the Public : ASPO-USA: Association for the Study of Peak Oil and Gas: The limitations on oil supplies are now upon us. The salient issue is the rate of production, not the supposedly huge resources that optimists may conjure up in their imaginations. How much oil you can get out of the ground on a daily basis is what counts, and it’s getting harder and harder to extract the amount of oil we desire from the Earth’s crust each day. We extracted the easy stuff first. We cannot now expect to extract the difficult stuff at the same high rates as the easy stuff. And, we cannot expect that total percentage recoveries from the smaller, more complex and challenging reservoirs which we are now forced to exploit will be as high as those we’ve gotten from large, simple, straightforward reservoirs in the past.

Facing up to this reality will be difficult because it will require so many changes in our thinking and our society. And, it would require the immediate markdown of the value of one of the world’s largest and most powerful industries because it now faces contraction in the not-too-distant future. No wonder the powers that be decided to change the definition oil instead of accepting reality.

http://aspousa.org/2012/07/commentary-how-changing-the-definition-of-oil-has-deceived-both-policymakers-and-the-public/

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