Today and tomorrow are days that a large percentage of our population is celebrating what they conceive of as change for a more beneficent, far-sighted and socially just culture.  One can only hope that their dreams will be realized.  Myself - I am far too cynical to fall into idolizing hope that any messianic hero will solve the problems coming toward us, no matter how brilliant or what his skin color is and how important that is. This is not to say that the change we are seeing is unwelcome or anything other than very positive, in fact these events are long overdue.

Going back to the purpose of this web site, I chanced upon an interesting article on oil depletion pricing, from of all sources the Rigzone, a petroleum industry site.  The readers' posts are even more informative than the article (which is quite basic peak oil 101) and include Robert Rapier, here is the link: http://www.rigzone.com/news/article.asp?a_id=71745

Many of the comments reveal however that many people in the oil industry look like they don't have the perceptual understandings of peak oil that this group has.  I did like however the comments that said that there needs to be an oil pricing ground of $60 a barrel in order to justify investments into new developments, most all of which are higher cost, lower EROEI petroleum.  My intuitive take on current prices is there is only several weeks at most of a supply glut out there, although in a global economy in recessionary freefall, that over supply may increase for a number of months into the future.  What is happening is that drilling rigs are being temporarily put to bed, because the oil price - income doesn't not justify the production costs.  What we are doing is setting ourselves up for a tremendous shortfall sometime around 2011-2012, which is when the hyper-inflationary price rises are likely to take off in force (this may be optimistic).

The situation with North America natural gas is much worse.  Technologies like omni-directional horizontal drilling and hydraulic fracturing newly applied to tight shale gas seams (of which there are massive deposits) prevented the USA from facing the natural gas cliff.  However now, with the retirement of maybe half of the natural gas drilling rigs coupled with rapid depletion rates for the shale gas and the financial plundering of the companies pioneering these technologies like Chesapeake Energy, it seems the natural gas cliff looms ahead, its arrival has just been pushed up a few years.  Imagine if you will, the freezing cold the Midwest, Central States and the East Coast is experiencing with a natural gas shortfall and rotating brownout and blackouts.  It is not pretty. -Joe