Heading Out

Seeking the winds that help to sail on Shakespeare's tide.

Wednesday, December 29, 2004

Peak Oil and Iraq

With it being a lovely day outside, what am I doing inside - blogging of course. In a quick pass through the political blogs I came across a very thoughful discussion of the current situation in Iraq by Sterling Newberry. This, and other signs of problems bring more and more analogies to Vietnam,particularly in the comparison of Hue and Fallujah.

There is, however, a very significant difference that has not yet been fully understood. While, in time, the national interest in staying in Vietnam grew less, it is likely to be the other way around with Iraq.

The world surplus of oil production over demand is now apparently less than 2 million barrels of oil a day (mbd). Most oil-producing countries have passed peak production and are now in decline. Demand, however, is continuing to grow at about 2 mbd each year. In these conditions then the supply from Iraq is becoming increasingly critical. (The US is getting increasing quantities from there - when it can get out). Currently Iraqi production is less than half what it should be and with very little work being done on the infrastructure (other than repairing the blown up bits). But that missing 2 mbd will be the difference between balance and shortage by the end of 2005. And in 2006 will become an increasingly vital part of sustaining the US, and global economies.

Which would suggest that our involvement will have to become greater, rather than less.


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