Several matters:

The long-foreseen "switchover" has only recently occurred. That is, the curve of oil usage versus oil discovery has peaked; the world is now using more oil than it is discovering every year. We won't actually run out for a number of years, and there is without doubt oil to be discovered, but the corner has been turned, and the difference between discovery and use is widening.

I'm of the opinion that it should be a crime to use petroleum for energy. We need it much worse as raw source chemicals than as fuel. There are other sources of energy (although more expensive), but few alternative chemical sources.

The world supply of petroleum currently known is greatly overstated, in effect. A great deal of what is left in the ground is either geographically impractical to extract and use or is geologically impractical--being tied up in small, isolated pools here and there. Thus the cost of discovery is increasingly prohibitive, and the cost of extraction from limited-volume pools is very high, and the cost of transportation of the extracted petroleum to refineries and use is extreme because of remoteness.

The price per barrel on the markets is not particularly reflective (right now) of greater or smaller (decreasing) supply. The current cost per barrel is a function of speculation, and speculation almost exclusively. Every barrel of oil has been sold and resold about three times before it is ever brought to the surface, and many times thereafter in handling, refining, and distribution. At each resale the price of oil tends to be higher, not because of any value added, but purely on a speculative basis.

In the next ten years I fully expect to see a world petroleum price of something like $90 a barrel.

Dave Oesterreich