The Coming Saudi Oil Crisis
Challenges in a World of Oil Scarcity

As oil becomes a scarce resource, its use will have to be rationed in one way or another. There are ways to allocate oil use and direct it to its most valuable applications. But achieving such a rational plan will require a carefully orchestrated, global, country-by-country effort. Left unattended, this process could quickly evolve into genuine chaos. The global economy can function after oil supplies peak, but not in the same manner in which we live today.

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Chinese Oil Giant in Takeover Bid for U.S. Corporation

One of China's largest state-controlled oil companies made a $18.5 billion unsolicited bid Thursday for Unocal, signaling the first big takeover battle by a Chinese company for an American corporation.

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China's purchasing power...

Whether or not CNOOC makes the bid for Unocal, this is a trend of consolidation that will continue. Yes, some corporations, like Exxon-Mobil are sitting on $48B in cash, thinking about doing the same thing no doubt...buying up more and more oil that is close (Oh, Canada?) and easy to get here. But they're not doing it yet...whereas China is also making inroads with Canada and other potential suppliers. (Canada may well be the oil merchant of the future, remember that. Can anyone say NAFTA?) Consolidation will be the key in the new oil economy. The large oils have no flexibility in supply, and with little new supply being found, all they can do is buy up smaller corporations. The catch is that right now, China is winning the race and the US is losing it. This is the geopolitical instability that peak oil causes. It's real. Get used to it.

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Do we really believe in the free market?

Oil expert urges US government not to interfere with CNOOC's deal. I think that the fate of this deal may indicate a great deal about whether the world will continue to rely on markets to allocate oil supplies (the result if the deal goes through) or whether geo-political considerations will trump markets (the result if the deal is blocked by national security concerns).

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Volcanoes, Oil, and Prophets

I live under what may be the most active volcano in the world -- Kilauea on the Big Island of Hawai’i. While watching lava cascade down its mountain peak, I consider the predicted peak in world oil production and the damage it could do. Its destruction could be far worse on human communities than that of a mighty volcano’s eruption, impacting not only a local area but civilization itself. We live today under the volcanic threat of peak oil, yet most people remain in denial about the potential dangers.

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