17 August 2008

Peak Oil?

Most of the petrol we consume today comes from oil fields where crude oil can be cheaply converted into petrol. The largest is in Saudi Arabia. However, there are plenty of oil fields containing e.g. shale oil where crude oil can be extracted and made into petrol if high enough petrol prices justify it.

Furthermore, a company called Sosal in South Africa has the technology to convert coal into petroleum. Using this technology, the amount of coal in America alone can provide for that country's consumption needs for the next 250 years.

All this makes me wonder why so many are going around yelling about peak oil. It is a well know sales trick to make buyers believe that their product is scarce. It creates a sense of urgency and the perceived scarcity allows the seller to charge higher prices and make fatter profits. The Saudis and the oil companies would love to convince everyone that oil is scarce.

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