There have been several stories under the radar in the last couple of weeks about individual oil fields that are decreasing in production. One of those is the Cantarell fields in Mexico which are projected to decline in production at a rate of 14%/year. The Oil Drum has written
about this field's decline and the implications for Mexico and world oil production. This point, in particular, captured my attention:
Notwithsatnding point 3 [a decline in Mexico will mean an increase from Saudi Arabia], Mexican oil production decline means that 4 out of 5 major OECD producers are now in decline (Norway, UK, USA and Mexico), leaving only Canada with growing production and this presents the OECD with a growing problem of energy security.
Basically this means that secure supplies of oil are seriously declining, and that reserves are more and more centered in security risk areas .... like the middle east.
Interestingly, the price of oil is down today (as of this writing) and still below $60/barrel. Gasoline still hasn't dropped from periods when oil was $70-80/barrel ... natch. The whole energy discussion reminds me of the global warming discussion a few years ago. There are just enough paid nutbars out there, that are given a whole lot of attention, that the business community can continue to be in denial about the fact that oil prices are going to a)
get more volatile, and b)
go up. Perhaps a few more years of instability and continuing new highs will convince them.
Meanwhile I have two neighbors with new SUV's in their driveways.