Peak oil not just a theory

I've provided evidence for a while that the world will not run out of oil any time soon. What it will run out of is cheap and easy-to-find oil. The IEA continues to overstate crude oil reserves in the Middle east--mainly to counteract a panic buying frenzy on fears of a pending shortage.

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7500669/Oil-reserves-exaggerated-by-one-third.html

Meanwhile, the Chinese continue to strategically secure energy resources via direct purchases or investments in natural resource companies.

The law of big numbers

As an engineering student, I understood the concepts of linear growth vs. exponential growth. But even I underestimated the practical applications of calculating exponential growth when it comes to energy consumption. Here's a primer on exponential growth and the future impact it will have in our consumption habits in a world of finite natural resources.



Lesson learned? Demand for energy, base metals, commodities, and precious metals will continue to outstrip supply, as world population and the standard of living in emerging countries grow. I'll let readers come up with their own conclusions.

Deficit Reduction Commission

Obama is forming a "deficit reduction commission"--with the charter of trying to reduce our exploding federal budget deficit. We all know how this is going to end up.

Recall the formation of the Department of Energy (DOE) by the Carter Administration back in the 1970's, in the midst of the Arab oil embargoes. It was created to reduce America's dependence on foreign crude oil. More than thirty years later, imports from oil-producing countries has more than doubled percentage-wise--from both friendly and not-so-friendly exporters. The DOE has obviously failed, as America is more vulnerable than ever to geopolitical supply shocks. Yet, the DOE has now grown into a multi-billion dollar cost center. It is a penultimate example of bureaucratic largesse.

In the same breath, Congress is planning to boost the national debt limit another $1.9 trillion, after raising the limit on December 28 (see zerohedge blog) to barely keep our country above water. The irony is deafening.

http://www.zerohedge.com/article/democrats-seek-stunning-19-trillion-increase-debt-ceiling-143-trillion

Government bureaucracy

From Ross R., a reader of Doug Casey's newsletter:

Does anybody remember the reason given for the establishment of the Department of Energy.... during the Carter Administration? Anybody? No?

Didn't think so! Ready??
It was very simple... and at the time, everybody thought it very appropriate.
The Department of Energy was instituted on 8-04-1977… to lessen our dependence on foreign oil.
Hey, pretty efficient, huh???
And now it’s 2009 – 32 years later – and the budget for this “necessary” department is at $24.2 billion a year. They have 16,000 federal employees and approximately 100,000 contract employees. And look at the job they have done!
Good ole bureaucracy.
And now we are going to turn the banking system, healthcare, and the auto industry over to the same government?