Back in January this year, Richard (Dick) Coulson made a very informative presentation on the theory now known as Peak Oil in the Milton Friedman Room at the Nassau Institute Offices on East Bay Street.

You can listen to his speech at this link...

What is Peak Oil?

According to PeakOil.com:

"The idea of Peak Oil is actually quite simple. Imagine that all our world's oil was gathered together in one big tank. At some point in time, we will have used up half of that oil. Peak Oil attempts to determine when this "mid-point" or “Peak” will be reached, & how rapid the decline in oil production will be after this “Peak” has passed. Many business & government interests speculate that this mid-point (Peak) is decades away, but independent researchers & analysts disagree, claiming Peak Oil will happen much sooner. Little valid disagreement exists over Peak Oil itself, rather arguments center around when Peak Oil will occur."

The US Senate to the rescue

The Peak Oil theory and the rising price of fuel has caused some concern in the US Senate Judiciary Committee, so they apparently summoned executives from the petroleum industry for what some "thought would be a politically profitable inquisition".

Reports are that Shell's John Hofmeister stole the show and indicated that the "problem of access (to oil) can be solved in this country (the US) by the same government that has prohibited it". [More...]

More on the Senate inquisition

Thanks to Don Boudreaux over at Cafe Hayek, and his link to this article... at The Washington Times by Mark Steyn, we can laugh at the Senate's attempt to fix the "problem" at hand.

Steyn says:

"I was watching the Big Oil execs testifying before Congress. That was my first mistake. If memory serves, there was lesbian mud wrestling over on Channel 137, and on the whole that's less rigged."

"Rep. Debbie Wasserman Schultz knew the routine: "I can't say that there is evidence that you are manipulating the price, but I believe that you probably are. So prove to me that you are not."

"Had I been in the hapless oil man's expensive shoes, I would have answered, "Hey, you first. I can't say that there is evidence that you're sleeping with barnyard animals, but I believe that you probably are. So prove to me that you are not. Whatever happened to the presumption of innocence and prima facie evidence, lady? Do I have to file a U.N. complaint in Geneva that the House of Representatives is in breach of the Universal Declaration of Human Rights?"

More on the Peak Oil theory

In this report... in London's, TimesOnline it was reported that:

"Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the company’s staff this week that output of conventional oil and gas was close to peaking. He wrote: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”

In this interview... also in the Times, Mr. van der Veer, points out that:

"We are searching for new sources of oil and gas because we are convinced that fossil fuels will remain the predominant source of the world’s energy for many decades to come. The number of projects we have under construction has more than doubled since 2004. We have over 50 large projects underway and of course many more smaller ones."

And he adds:

"Much of the world’s easy-to-access oil and gas has already been located and is under development. What remains is in harsh frontier environments, such as deep ocean or the Arctic, where it is more difficult and more expensive to extract. Or it is in deposits like oil sands that we tend to lump under the term “unconventional”, which basically means it takes special technology to produce it. There the hurdle is not so much locating resources - in many cases we already know they are there -- but rather inventing cost-effective and environmentally responsible ways to extract them."

"That’s one reason we are putting increased emphasis on developing unconventionals to meet growing energy demand. We expect around 15 per cent of Shell’s oil production will come from unconventional sources in 2015, up from about 5 per cent now."

So what's in store going forward for energy?

Mr. van de veer, and Shell believe that:

"...you find entrepreneurial-driven innovation and the further development of hybrid/electric cars. Houses are better insulated, electricity becomes increasingly important and you get an integrated, more global approach to regulation. The key enabler to change is meaningful CO2 pricing, established by a mechanism such as emissions trading, for instance. That stimulates innovation and investment in new energy technologies and paves the way to CO2 capture and underground storage after 2020."

"So we could see electric cars more prevalent from 2020 and commonplace by 2040, although the bulk of transport energy is still provided by liquid fuels. There is the continued uptake of solar and wind, pulled along by the electrification of the energy system. By 2040 we may see centralised solar power. Utilities that rely on coal and gas are required to implement strict carbon abatement technologies. In the developed world, almost 90 per cent of all coal-fired and gas-fired power stations will have been equipped with CCS technologies by 2050, as well as 50 per cent in the developing world."

Summation

Reading between the lines, Peak Oil exists for sources that are currently easily accessible and will be abated by the technology to harvest oil that is more difficult to access.

In the meantime, automakers are scrambling to refine fuel cell (hydrogen) and electric vehicles as hybrid vehicles seem to be losing favour, and planning for a future that just might run low on oil.

As Larry Smith over at BahamaPundit keeps saying, it doesn't matter if Peak Oil is not a reality, the world needs to burn less fossil fuel to prevent further damage through that other crisis in the press called Global Warming.

The ingenuity of mankind that has brought us this far. It is only reasonable to believe that solutions will be found to these predicted crisis in the same manner.

In other words, the solution to all these "world altering problems" will be found through the efforts of the individuals in the free market and not some political inquisituion seeking to appear that they can solve all the worlds problems.