Nobel economist says peak oil is `baloney’


Price heading way south? According to Smith, a world about to
reach oil peak would be charging a lot more for oil, which he expects
to sell for $US15 a barrel in the near future.

Elasticity of supply must be factored into predictions: Smith
says ASPO’s peak oil scenario is wrong because it treats oil as a fixed
resource, something he argues analysts should not do until extensive
exploration rules out significant future discoveries. “Yes, existing
oil fields are in decline, but what else is new?” he says.

Market is the best indicator: Smith says business should look to
the market rather than ASPO to indicate when oil peak will hit. And
when oil production does peak, the market will handle a transfer to
alternative technologies without creating dire, economic effects, he

The Australian Financial Review, 19/11/2005, p. 16

Source: Erisk – 

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