Former Shell chairman says that diminishing resources could push price of crude to $150 a barrel, according to the UK newspaper The Independent.
There are as many ignorant scoffers today about Peak Oil as there were in 1956 when geophysicist King Hubbert predicted that U.S. oil production would peak in 1970. Hubbert was indeed correct. Who's word are you going to believe? The government? The Saudis? The present chief of Exxon Mobil? I'm inclined to believe someone like a Lord Oxburgh who can freely speak his mind. From the Independent:
"Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.
He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."
In an interview with The Independent on Sunday ahead of his address to the Association for the Study of Peak Oil in Ireland this week, Lord Oxburgh, one of the most respected names in the energy industry, said a rapid increase in the price of oil was inevitable as demand continued to outstrip supply. He said: "We can probably go on extracting oil from the ground for a very long time, but it is going to get very expensive indeed. " (Read more...)
Oxburgh is no kook. His comments are well balanced. His message is that the gusher days are coming to a close, and that it will become increasingly expensive to extract what's left.
While crude is due for a near term correction, the long term trend remains up as the dollar loses value and supply diminishes.