Natural Limits? Was: Re Peter Grimes interview on Indymedia/Marxists economy

dmschanoes dmschanoes at
Fri Nov 7 18:08:25 MST 2003

Short answer:  Exactly this argument, about the looming capital shortage in
the petroleum industry to invest to meet future needs, was made in
1973/1974.  As a matter of fact the "left" expanded this argument to include
the entire US economy.  If I recall from way back when, even MR was writing
about the "capital shortage."

No such shortage existed then.  Do this:  look at the projections for
capital requirement until 2030 or 2050 that have been floated around-- break
it down to yearly expenditures and compare it against the rate of capital
spending in the 1992-2000 period.  See what you get. Just for a lark, I did
that once and it worked out to be less than the 90s rate.  But those
projections were made in 98, during the "good times."
The fact of the matter is that right now this "capital needs" argument is
being floated regarding power generation but the real fact of the matter is
that the power generation manufacturers are in a terrible slump due to
massive overproduction.

I will get back to you more on lifting and finding costs, and production
rates from countries-- but if you want to explore this, then don't do it
second hand with pistol pete or whoever, go to the EIA site and look at the
data-- look at the price of oil/barrel (avgs) $12 in 98, $17 in 99, $28 in
00, $21 in 01, $23 in 02,(all estimates, and from memory, but I think I'm on
it) and then climbing in 03 with the invasion of Iraq, only to tumble, and
climb again-- that has a lot more to do with production/export volumes than
the supposed depletion of reserves.

And you want to talk about the North Sea?  Well that production peak was
forecast for 92-93, and guess what?  didn't happen, production increased
right through the 90s-- and today?  Norway is about to bring a new field
into development.

More later, got to return to work.


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