An observation worth noting … and pondering, from Mark Lewis (links in original):
Oil market commentators increasingly dismiss the very idea of supply-side constraints on the oil market, pointing to the recent surge in light-tight oil production from US shale deposits and the existence of vast shale formations elsewhere in the world….
But does this peak demand theory bear scrutiny?
[F]rom data for 2013 released by the EIA recently, it is now clear that US demand not only increased last year, but accelerated rapidly over the course of the year.
All of [the data reported by the author] implies that the reduction in US oil demand over 2008-12 was not so much structural as due mainly to the weakness of the US economy following the global financial crisis, and the tightness of the local oil market until recently. As the economy has started to recover and rising domestic supply has made local prices more affordable, US consumers – whose ranks have swollen by 14m since 2007 – have started coming back to market.
Against this backdrop, the peak-demand narrative looks deficient at best and a distraction at worst….
“Peak demand” [see my six-part October & November 2013 series on this topic beginning here] has served as a convenient argument by those who continue to profess that we have no energy supply concerns worth discussing, much less planning for. But as with too many of these convenient and dismissive arguments light on facts and context, the reality suggests otherwise.
That those who should and do know better continue to ignore the inconvenient portions of the true narrative is a concern now, and will be an even larger one in the future. As populations rise; as domestic demands by oil exporting nations likewise increase; as prices continue to remain high in order to both justify and permit exploration and production of unconventional reserves, and as production rates from both conventional crude and tight oil formations continue to decline (the latter more rapidly than the former), these additional facts suggest that a broader and more truthful perspective about future energy supplies needs to be injected into the conversations.
Consumers unaware of the realities about current and future production options must be respected enough to be told the truth and not just the carefully-massaged version which supports a limited group benefitting from the silence. So too must elected officials at all levels of government understand that same broader picture of what’s in store for all of us.
Planning for anything with the full array of facts is usually a better approach in any setting. With an issue of this magnitude, it’s actually the only option—even if that limited group now benefitting from the silence is impacted in order to benefit everyone else.
Should that really be such a difficult choice?
~ My Photo: after the storm at Good Harbor Beach, MA – 10.25.05