by dashster » Sat 24 Jan 2015, 05:03:48
Cornucopian Bloomberg TV host Tom Keene was in Davos at the conference for the world's extremely wealthy and elite and interviewed Cornucopian author Daniel Yergin. This is a transcript of the part of their interview that was put into a clip:
B: How many victory laps have you taken, crushing the Peak Oil people?
Y: Well.. <laughs>
B: <laughs> Do you feel like, just, YES I got it right!
Y: Well, I, I had the sense there was a lot of, it’s hard, I mean even here, I remember 8 years, 6 years ago. People say “You you don’t believe in Peak
Oil?”. Well said, you know, not really, because we’ve seen Peak Oil, every, and every time we’ve seen Peak Oil it’s been followed by a glut because new areas get opened up, new technology. And this remarkable thing, 2008 it was Peak Oil, US oil production is up 80% since 2008.
B: Right. For, for our viewers in the Middle East today or for that matter the Middle West of the United States, in 86 the price came down and went flat for a number of years. Do you predict that again?
Y: Well I think that, uh, we’re, I think there are analogies there. I think it’s a different circumstance because the US is, is so flexible. We think it’s gonna be quite flexible in it’s production. And the kind of prices where we are now would not sustain production over any period of time.
B: I get great confusion in interviews about the Canadian tar sands. That that’s different, it’s a different dynamic.
Y: Or Canadian, Canadian oil sands is what.
B: Well, well, what’s the PC correct, help me here. Where’s the politically correct surveillance police. They’re over there with a fondue pie But whatever, it’s tar sands, whatever. How will Canada adapt?
Y: Well actually Canada in the next, uh, this year and next year is gonna add about 500,000 barrels a day to the world market because it’s already in motion. If you’re an existing producer there it’s maybe about 30 dollars. Obviously new investment will slow down. But Canada is one of the sources of growth. Just as we’ve grown 4 million barrels a day since 2008, Canada’s grown 1 million barrels.
B: You have behind you an historical confidence. You’re an International Relations doctorate out of Cambridge, and you move on to a whole series of books that say essentially, read history or you don’t know the present. From the past what can you bring forward for Americans to say “Don’t panic about the plunge in oil”.
Y: Well I think it’s that we, say, this is the 4th time in the last 80 years that we’ve seen a big surge of oil come into the market. And every time you have weak prices. Uh, you, it happened in the late 50’s, as you were talking about, when the Middle East when Saudi Arabia came on. In 86 and actually back in 1931 when oil went to 10 cents a barrel, and if you pulled into a gas station they’d give you a chicken, a free chicken as a premium to try and get business. So every time, you know, the market comes back and stabilizes. What’s interesting now is this role as the US now the swing producer.
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The host is proclaiming Yergin right, and yet Yergin admits - bolded above - that these price levels if sustained would force a US production drop. Even without a price increase, the EIA predicts fracking to peak in 2019/2020. Yergin never foresaw the oil plateau before the recent plummet. But Yergin wins and Peak Oil loses?
If these financial people did any research the obvious question would have been - where are oil production increases going to come from once fracking peaks in a few years?
Not to mention the obvious flaw on thinking about Peak Oil like a comet heading for the earth - a problem that goes away after a certain moment in time.