I am beginning to believe it is an advantage to NOT work in the oil industry to understand oil. These people have been wrong, are wrong, and are about to be VERY wrong with their understanding of what peak oil means. Peak Oil has many definitions, but the most common is the all time high in world annual production of crude oil. Resources have little to do with it. (There are probably 10 million earthworms on my property -but even with a team of people and the best equipment I might only get a fraction of them). Higher prices and higher technology have little to do with Peak Oil, which has to do with cheap, reliable flow rates. There is not the slightest evidence that market theories (or activities) has helped find any more oil and gas (in the United States) since price-induced drilling increases had essentially zero impact on the production (or finding) of oil and gas.
Lets scrap the word 'peak oil' for the moment. To the economists and cornucopians at Exxon, the API, the EIA, etc. I ask these questions:
1)Do you expect oil production costs to get cheaper over time?
2) Have we past the point of cheap oil? (which is what matters - who cares if we can get an extra 20 mbpd if it takes more energy, more steel, more water and costs $500 per barrel)
3)Will the energy and other resources you use to procure oil and natural gas increase or decrease in the future?
4)Irrespective of resource or reserves, what will be the highest, reasonably low priced (say under $80 cost), FLOW rate that you can consistently provide that is not subject to geopolitical disruptions at the margin? (i.e. is there a perpetual cushion in case something goes wrong)
5)What is the error band and confidence interval you assign to your above answers? Are you willing to stake the future of industrial civilization on your answers? Even if there is a 5% chance that the resources you see translate to regular, cheap, flow rates of high quality oil, that is too big of a risk for society to take (and I think it is much higher than that).
You people are asking the wrong questions, because you've been focused on what you believe is the most important aspect of the problem - where IS the oil. That is a small part of the many more important questions, yet the group think and myopia has created an enormous blindspot. A couple months ago, if I would have told you the Federal Reserve would DOUBLE its balance sheet since the end of September, would anyone have believed me? Well, they did. Rules and facts change. Correlations that worked in the past are now uncorrelated. What was uncorrelated in the past is now completely correlated. Thats why economics isn't science. Its based on a moving target. Economists at the oil companies are trained to think in resources and price, not in energy costs and externalities. They will not see this Black Swan until it bites them in the ass.
I don't believe in any kind of investment anymore besides an investment in knowledge. Forget investing in the stock market. Forget about investing in new ways to find oil and that "Drill, Baby, Drill" crap. Forget investing in any kind of investment, except for the one between our collective two ears.