Oil Price, Speculation and "Peak Oil"

So that was the week where the oil price hit $135 per barrel. As I write this we have articles on the BBC news website saying prices have dropped off from their high, but still up over 40% on the year.

There is no doubt an large element of speculation in the price at the moment, but that does not mean that prices will ever return to the levels we previously have known. There have been people, usually not associated with the oil industry, who have been telling those that listen that we are at or near the maximum production of oil.

How close we are to "Peak Oil" depends on many factors, the largest of which is how close to the truth are the declared reserves of the oil producing producing countries, especially the OPEC producers.

The declared reserves of OPEC countries are the measure by which their production quota is calculated and almost all OPEC countries declared reserves underwent a significant amount of inflation when oil prices were very low <$25 a barrel, as this allowed them to pump more oil in a "begger thy neighbour" mode of operation, when prices were so low, all the gulf states needed the money to finance their budgets, so it was in their interests to inflate their reserves to allow them to pump more. Details of how the OPEC producers inflated their reserves without any apparent discoveries of new oil fields can be found in this excellent book

We will in the future have to find other means of powering our requirements if we want to live in a technological society, hydrogen as the main fuel is a chimera, fusion is as far away now as it was in the 1950's, so what do we use to maintain our lifestyles?? I have no idea, and I am pessimistic about the future of our society, perhaps we'll all go back to the horse and cart, perhaps it would do humanity good to do so