July 3, 2012

ONLY OIL TAXES CAN CREATE THE PEAK EFFECT:

What Happens To Clean Technology Innovation If Oil Prices Drop?: Cheaper gas might be nice for your wallet in the short term, but if oil prices plummet (and it looks like they might) what will that do to the quest for renewable energy? (Ariel Schwartz, 7/02, Co.Exist)
  
Peak oil, the point where world oil production reaches an apex and then begins an inexorable decline, was a cult concept until the end of the last decade, when concern about a downward spiral in oil supplies--heightened by high oil prices--reached a fever pitch and the idea that we might run out of oil reached the mainstream. In many ways, this was a good thing; it created a space for alternative energy innovation to grow.

But surprisingly, a new report (PDF) from Leonard Maugeri, a former oil executive and current fellow at Harvard's Belfer Center for Science and International Affairs, warns: "oil supply capacity is growing worldwide at such an unprecedented level that it might outpace consumption. This could lead to a glut of overproduction and a steep dip in oil prices." That dip in oil prices would mean cheaper gas, certainly, but it could put a serious damper on how far we've come in the search for non-fossil-fuel-based energy solutions.

The U.S. could be the second biggest oil producer after Saudi Arabia by 2020.
It's all thanks to technology and investment in exploration by oil companies, who are increasingly using "unconventional" oil extraction techniques in shale oil fields, tight oil fields (oil fields that only make sense to drill when advanced techniques like hydraulic fracturing and horizontal drilling are used), and tar sands.

In fact, says Maugeri, these techniques might allow the U.S. to be the second biggest oil producer after Saudi Arabia by 2020.

Posted by at July 3, 2012 5:32 AM
  

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