Date: Fri, 20 Feb 98 8:07:51 EST
From: boddhisatva <kbevans-AT-panix.com>
Subject: Re: M-TH: Marine biodiversity and soil fertility










		To whom...,



	Perusing the articles on global oil in Scientific American and a
commentary in Nature, I come across a persistent problem.  We are meant to
trust data coming from oil companies, oil-producing state governments and
the petro-establishment. Laherre and Campbell readily admit this in the
first article in the Scientific American series.  While oil possesors do
have reasons to inflate estimates of reserves, they must also avoid giving
hte impression that oil is too abundant or the price goes down and the
reserves lose value.  Recently oil producers have let their guard down and
the fear of shortage has been absent in the oil market.  That means prices
are back to 1970's levels.  An oil company need only assure investors that
it has enough oil to cover an investor's time horizon.  Beyond that high
reserves put downward pressure on markets.


	The second problem I see is that all the predictors rely on the
Hubbert curve to predict when oil production will peak.  I don't question
the logic of the theory behind the curve.  I do question whether an oil
industry that has been aware of the curve for several decades can be
trusted not to act on that awareness. 



	Third, macro-predictors of oil trends seem not to focus on price
in their models.  Obviously, as the price of oil goes up, the economics of
recovering a greater fraction of buried oil become more positive.  Also,
natural resources are just a smaller component of industrial costs than
they used to be.  For that reason, high oil prices are not as damaging
across the board. 

 


	Finally, if Orinoco heavy oil or Canadian oil-shale are necessary,
mankind will extract them even if it means diggin up all of Venezuala. 
Environmentalists should deal with this in terms of "when", not "if".  




	Oil will go and cheap oil will go first, but it seems clear that
an oil crisis is not looming large. 






	peace




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