Peak Oil? Mmmm…Not for A While, I’d Say.

There have been a couple interesting oil-related articles that have come out int he last couple of days I think are worth noting. First, Russia is saying that its oil production is declining and officials there don’t see it rebounding any time soon. That’s leading folks like Rick Moran to wonder if we’ve hit the “Peak Oil” point, at least in Russia.

I don’t think that’s true. Many of Russia’s problems stem from their outdated machinery. The country can’t get oil from its fields with anything approaching the efficiency of many other oil-producing nations because the equipment is old and, thanks in large part to Vladimir Putin’s rather totalitarian criminal pursuit of the so-called oligarchs, Russian oil companies aren’t exactly flush with cash. I strongly suspect that if Russian oil companies had updated and fully operational equipment, they wouldn’t be facing the problems they are now.

Meanwhile, the Brazilian government announced the find of what could be the largest oil field discovered in the past three decades. The “Carioca” oil field could have as much as 33 billion barrels of oil in it, though the company behind the discovery says that it’ll need some time to confirm both the discovery and the potential haul. If the Carioca field is even a third of the announced size, it will make Brazil an immediate player in the world oil market (and incidentally makes our free trade agreement with Colombia much more important).

At this point, we’re a very long way from any Peak Oil scenario. As our technology gets better, we’re able to search for oil in places we’ve never really been able to look before and oil that was impossible to get becomes much more easily available. That doesn’t mean we need to burn through oil like it’s free, but it does mean that we have some time to develop good, sound energy policies.

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Category: General