The sharply peaked nature of the oil production curves don't make much sense in a stochastic world view. We should really expect a continuously varying 2nd derivative and not the discontinuity shown. In practice, the discontinuity could occur due to some severe oil shock, and the aggressive rise right before the shock likely due to an ever increasing extraction rate. This odd scenario would classify the EIA as veritable doom-mongers, no better than the worst of the lot at PeakOil.com. I believe I could reproduce the curve shown with my oil shock model (see sidebar), but it begs for additional deliberation as my preliminary extraction rates would need to track a peculiar arc.
This prompts the question: Does EIA understand something about oil production dynamics that they have kept to themselves?
As oil price hovers around $70/barrel, Matt Drudge, ranting during his Sunday night radio show, took some callers on the oil situation. Because Drudge followers fancy themselves as budding Clark Kent's, eager to break some news, the show provides some humorous moments. Drudge himself will illogically oscillate between a populist and a reactionary, which makes him squirrelly immune to criticism. His callers, on the other hand, provide sitting targets. For instance, a caller from Valparaiso said that "the companies are awarsh in oil" (yes, that's how they say it in Indiana). He added that the oil company chiefs had to raise prices due to issues with the "contracts". He didn't elaborate too much on the contracts, other than to imply that the oil companies could not easily get out of them. The caller seemed sure of himself, showing confidence in the future, despite the fact that his job consisted of delivering gas-sucking RV's cross-country to buyers. I sincerely hope Mr.Indiana doesn't go Vanishing Point on us when the oil situation starts to turn south -- contracts or no contracts.
Drudge added that the $400-million-richer Exxon Chairman Lee (Jabba) Raymond should at least have commissioned a picture of himself where you could see his chin. (Big Gav from Peak Energy will appreciate that line)