Friday, May 20, 2005

Let's play pretend

In the face of high oil prices major energy information agencies are having a difficult time maintaining that oil supplies are plentiful. Now, they seem to have jumped on a notion first broached by BP Amoco that oil demand growth is diminishing and will reach zero by 2007. Of course, if that fantasy were to become true, then additional oil production beyond the 2007 rate wouldn't be needed to fuel economic growth. It's a convenient fantasy when other ones about ample supply aren't functioning. But, the facts belie the fantasy. Oil demand growth has actually accelerated with the growing needs of Asia, particularly India and China. And, this is something not likely to abate soon unless there is a serious economic recession. How convenient that the zero rate of growth prediction coincides with warnings that oil production in 2008 won't be commensurate with demand.

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