Easy-to-extract oil peaked in 2005. It is now declining at about 6% a year. Hard-to-extract oil is replacing some of the loss, but at a price that is too high for consumers and too low for producers. This is why the price seems to fluctuate out of control.
There is a hot war over one last large reserve of easy oil under Kirkuk, Iraq. More money will eventually be spent on this war than can possibly be recouped in profits -- but profits are just a small part of oil. Oil is blood to modern society. Whoever controls it has tremendous power.
So we are in the impossible situation that money is being borrowed and lavished on getting oil, while the market is in a glut.
You can imagine how threatened the bankers are with all the debt that is in danger of default if they don't get the easy oil, or if recession deepens and demand falls even more.
Here are some of their nightmares.
There is a hot war over one last large reserve of easy oil under Kirkuk, Iraq. More money will eventually be spent on this war than can possibly be recouped in profits -- but profits are just a small part of oil. Oil is blood to modern society. Whoever controls it has tremendous power.
So we are in the impossible situation that money is being borrowed and lavished on getting oil, while the market is in a glut.
You can imagine how threatened the bankers are with all the debt that is in danger of default if they don't get the easy oil, or if recession deepens and demand falls even more.
Here are some of their nightmares.
- reduced energy demand due to recession
- free transit (notice how quickly they shut down the idea in Paris)
- falling birth rates
- rebellion (which they call terrorism)
- default
