
Although the oil price returned to $40.00 or so, it has already seen prices below $34.00 which is less than 23% of the peak price ($147.50) in July 2008, just five months ago. The decrease we have witnessed was by a factor of 4.5 which is a pretty amazing change for such a short interval.
Most peak oilers have gone silent but there exists at least one peak oiler whom we know well and who used the recent events as evidence that the world will run out of oil soon, that the price will diverge, and that we need the leadership of messiahs like himself. Yes, his name is Alexander Ač.
In his newest posting, he asks whether the Slovak government will revise its energy strategic plans. Their government plans the Slovak oil imports in 2030 to be twice as large as the current figures which sounds reasonable because Slovakia is exactly the kind of a country that may expect such an increase.
Alexander's hysterical rant is composed of three sections:
- Oil production will plummet and the depletion will accelerate
- We need a global energy revolution
- We have to increase the investment
In the first section, he writes that the output is going to shrink dramatically. In the second section, he emphasizes that all energy in the world must be replaced by the ludicrous sources of energy.
In the final section, he uses the recent drop of the oil price to argue that there will be no oil in the future because the investment will drop, and the price will therefore drift towards infinity.
What Alexander Ač is able to write is just stunning and it shows that there is no meritocracy left in our society. In the 10th posting below the newest one, Alexander Ač writes that the oil price is soon going to surpass
$500 per barrel.
The real prices are smaller by a factor of twelve or so. His forecasts has failed so miserably that if his life depended on these forecasts, he would have been dead for quite some time. If he had made substantial investments, he would be broke by now.
However, Alexander is just an irrelevant grad student whose skull is full of dirt. But there are many similar people who are equally uncapable to evaluate the reality and their own miserable failures who are controlling all kinds of official institutions, including the hacks who have been named as members of Barack Obama's presidential team.
For any real application, the essential question is the future price of oil. Anyone who makes any decision or investment - a medium-term one or a long-term one - depends on this unknown piece of information.
Power-thirsty, mentally sick pseudointellectuals similar to Alexander Ač are completely unable to predict absolutely anything, their predictions systematically differ from reality by many orders of magnitude, but they constantly want their influence to increase. Alexander, could you please try to imagine the deep lake of excrements into which the world would immerse if you had any influence on it?
Do you understand the difference between gold and shit? It's been established beyond any reasonable doubts that your thinking and writing belongs squarely to the latter category.
Of course, the price oscillates because no one really knows how the supply and demand will compare next year or in 2015. But these oscillations are not a way to show that ultracommunist fanatics who want to regulate the world should be listened to because the world can't survive without them. Quite on the contrary, these price fluctuations are natural processes by which the invisible hand of the free markets regulates the situation.
Indeed, the investment into new oil fields (and alternative energy sourecs) is going to decrease markedly is oil price stays below $50. But that's exactly the right thing that should happen because if the price is low, it means that oil is not that valuable - a tautology that the communist freaks simply can't ever understand - and it's simply not a good idea to invest much to obtain much more of this stuff.
Roughly speaking, a liter of oil is as cheap as a liter of bottled water. Whoever assumes that oil must be treated on par with gold is simply a moron, if he makes investments based on his theory, he should quickly become broke, and everyone should let the laws of Nature to remove such a failed life form from the visible surface of the Earth, in order to free space for others.
If oil ever gets more scarce, the investment into new oil fields and other energy sources will naturally increase once again and help to lower the oil price. At any rate, the last thing that the system needs are the hands of power-thirsty regulating fanatics, especially not those who have failed in all the predictions they have ever made in their lives and who don't even realize the relationships between the price and the value, the supply and the demand.
Finally, I want people to be responsible for their bad predictions and counterproductive interventions which means that I want someone to give failed people like Alexander Ač a proper thrashing.
And that's the memo.