[PRCo] OIL SUPPLY PROJECTIONS

[Fred Schneider]

FOLLOWING ON THE E-MAIL I SENT EARLIER TODAY, HERE IS A DIALOG BETWEEN
ME AND ALAN SCHNEIDER, WHOSE INTERESTS INCLUDE THINGS LIKE OIL
PRODUCTION.    THE FIRST THREE LINES WAS MY BAIT.  HIS RESPONSE FOLLOWS.



> I'm just a little scared that fuel prices may in time go up faster
> than we can adjust for our
> suburban migration over the last 75 years.

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You can count on it!  The Oil & Gas Journal authors said 2010 would be
the peak year for world oil production, with 2020 production calculated
to be somewhat below that of 2000.  I cited 2010-2020 in my e-mail to be

conservative; perhaps I was wrong for citing 2010-2020 in place of 2000.

Hubbert's original prediction was 2000-2010, and due to OPEC production
cutbacks and the worldwide economic slowdown since 1970, demand growth
turned out to be slower than Hubbert predicted.  So I wanted to put a
"maximum" rather than a "minimum."

Based on our past oil shortages, we can expect demand to be very elastic

- prices should shoot up dramatically, and the rise will occur in our
life time.  We will be able to out pay third world countries, producing
tremendous problems there, but we'll face gasoline prices like $10 a
gallon in today's prices not long after the peak year of production.

In the same issue of Oil & Gas Journal another group performed a totally

different type of analysis based essentially on the discovery of mega
oil
fields (think Spindletop in Texas in the 1920's or the North Slope).
This group claimed the peak could easily occur in 2001 or within a few
years thereafter.