Two valuable reports about global oil production!

Summary: with $100+ oil in the news, the Internet is filled with gibberish. Guesses, wild speculation, and gross errors all compete for our attention. Amidst all this there are a few sources on which you can rely. Here are two. First, a report from the Federal Reserve — one of the consistently best sources of information in America. Second, a brief interview with Robert Hirsch, one of America’s top energy experts.

I. “Crude Awakening: Behind the Surge in Oil Prices“, Federal Reserve Bank of Dallas, May 2008 (3.2 meg PDF)

This is the best single report I have seen explaining what is driving up oil prices. I strongly recommend it. It is clear, only 8 pages, and has graphs that clearly tell the story.

II. An interview with Robert Hirsch. He ran the US Fusion Program during the 1970’s; clearly not your garden-variety energy expert. He is a co-author of what should be the cornerstone of our national energy plan — if we had such a thing (hope is not a plan): Peaking of World Production: Impacts, Mitigation, and Risk Management (aka “Mitigations“). See link #2 at the end of this post for an archive of Hirsch’s articles about energy.

Here is the video of the broadcast by CNBC on 20 May 2008. Thanks to “Super G” at The Oil Drum for preparing the transcript. Here is a brief biography. Excerpt:

HOST: Watching crude oil prices touch above $127 for the first time overnight leads a lot of people to start wondering about peak oil and the peak oil theory. You’ve been writing about peak oil for some time, so did you see this coming?

HIRSCH: Yes we did. Not quite the way it’s turned out, but this is not a surprise.

HOST: You say, “not quite the way it’s turned out”. What’s happened that’s different from what you were predicting?

HIRSCH: Well, I wasn’t particularly predicting. I’m a student of this and have focused on what we do about the problem after it really hits. Peak oil — the idea is that it would hit a sharp peak and then production in the world would hit a sharp peak then drop off. And what’s happened is that we hit plateau in world oil production, and that plateau has been ongoing since about the middle of 2004.

HOST: Dr. Hirsch, there are a lot of people when we talk about peak oil who say there are going to be technologies that are always developed. There will be new ways to get oil, whether it’s from coal, whether it’s from the oil shales, and they say that means we will never actually hit peak oil. What do you say to those people?

HIRSCH: They’re incorrect, and the reason that they’re incorrect is that they don’t understand the magnitude of the problem and how long it’s going to take to bring substitute liquid fuels on and to introduce energy efficiency on a massive scale. That’s something that we analyzed and it takes decades. And the reason, simply, is that the magnitude of the problem is enormous.

… There’s no single thing that’s going to solve this problem because it’s as massive as one can possibly imagine. And the prices that we’re paying at the pump today I think are going to be the good old days because others who watch this very closely forecast that we are going to be hitting $12 and $15 per gallon. And then, after that, when world oil production goes into decline, we’re going to talk about rationing. In other words, not only are we going to be paying high prices and have considerable economic problems, in addition to that, we’re not going to be able to get the fuel when we want it.

Please share your comments by posting below (brief and relevant, please), or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For more information about Peak Oil