Revisiting Peak Oil, and the Undulating Plateau

The following figure at The Oil Drum — purportedly showing a post 1/3/05 Saudi inability to respond to oil market demand shifts — is driving a gigantic debate at TOD about peak oil, Saudi production, and the cornucopian hypothesis:


  1. Andy Nelson says:

    I think the Saudis could still swing if they wanted to. Their downstream investments in Jubail and elsewhere could be leading to nationalistic decisions to shut in production for future domestic processing. Figuring out Saudi strategy seems to be the new kremlinology. I believe that centrally planned oil industries like Saudi Arabia’s will peak and crash. Area’s that are open to foreign investment and free trade, have multiple competing players, and transferable leases will plateau or expand. As a case study you can look at Canada. When we had an industry based on natural drive, pinnacle reef reservoirs we were net importers and self sufficiency was just a dream. Now the cheap easy oil is all gone, but by reducing barriers to foreign investment, allowing oil to be exported rather than kept in the country at subsidized prices, and allowing assets to be bought and sold easily, Canada is now a net exporter, even while domestic consumption has increased.