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Comment by trentnix | Hacker News Reader

we have most probably reached peak oil extraction in 2018

We’ve been assured this is imminent for 50 (FIFTY) years. I’d bet the farm this prediction is dead-ass wrong too.

We're very nearly at the 2018 peak anyways [1].

The stock is so big relative to the flow that I can't imagine how anyone has confidence in claims like this. Even if we will completely run out of extractable oil in N years, consumption could continue to grow for the next M << N years.

[1] https://www.eia.gov/outlooks/steo/report/global_oil.php

Every time some limitation is predicted, particularly when the only limitation is investment, it's usually surpassed. There's more extraction that can be done, and more efficiencies that can be found, so we're not at 'peak', but I can believe that we're at a point of diminishing returns.

Pour one out for the Oil Drum.

Plenty of oil yet to get. The constraint is limited capacity.

We only have radical politicians to thank for that underinvestment by private companies.

Politicians who, by the way, have no real interest in solving the climate crisis de jour but instead are simply trying to create special programs, credits, subsidies and other govt perks for cronies.

> We only have radical politicians to thank for that underinvestment by private companies.

Source?

Energy company execs themselves. See recent news for examples

Would you invest billions in projects with 10-20 year payback periods if politicians eager to score points were using your industry as a scapegoat and vowing to destroy it?

> We only have radical politicians to thank for that underinvestment by private companies.

I'm not sure who you are talking about.

Domestic producers start talking about "switching modes to returning value to shareholders" in mid-2020.

We were headed for higher oil prices regardless because shale producers were sprinting to stand still in terms of production. The pandemic certainly pulled that future forward. Certain other politicians orchestrating supply-side cuts without demanding price stability on the rebound [1] -- despite obvious impending bullwhip -- probably didn't help.

Generally speaking, though, when it comes to oil prices, it's best to avoid discussing politics and let your personal investments do the talking. I've been selling XLE.

[1] https://www.nytimes.com/2020/04/12/business/energy-environme...

A specific example would be US refining capacity.

How so? There's no reasonable sense in which reduced US refining capacity is a problem created by "radical politicians".

Is your position that oil companies under-invested in oil refineries, which are now being decommissioned due to being out of repair, because Trump was radically anti-oil? I don't think oil companies even believe that Biden will have a friendly legislature in 2023...

This reeks of "something I might believe after a beer listening to a cable news channel but not something I would bet $150K on". Again, I tend to ignore what people say and simply ask: "what are you doing with your money?"

If the answer has anything to do with your political emotions, well, good luck mate.

See my other comment in this thread. Energy company execs have cited the exact things I stated as stopping them from investing in infrastructure.

Execs are salespeople. Tip: that 2012 Buick with rusted out baseboards isn’t actually a good deal, and oil co ceos are also sometimes full of it.

Refineries don’t fall out of repair overnight. Underinvestment is strategic, market-driven, and goes back over two decades. Politics is an excuse, and blaming a current crop of politicians for 20 years of underinvestment is prime facie bullshit.

I disagree. The constraint is the prisoner's dilemma that is the oil extraction industry, where the incentives are currently aligned such that extracting less oil maintains steady profits for all players as demand recovers from 2020. If you recall, oversupply combined with demand reduction caused oil futures to go negative in that year. The industry does not want to relive that experience in 2022.

Politicians (and policies) don't really have much sway over oil prices compared to market forces. For example, the federal gas tax is 18 cents a gallon, a pretty small fraction of the current price.

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