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Two terms that definitely scare investors (at least those who don't know what implications both have on their portfolio) are Stagflation and Peak Oil. One (Stagflation) might be happening soon but could be avoided, while the other (Peak Oil) might not happen soon, but cannot be avoided.

Peak Oil will soon generate problems for individuals and families around the globe: unemployment; bankruptcy; inability to pay for heating oil, higher education, mortgage, and rent etc; the need for family members to share residences and expenses; violent street crime even in previously safe neighborhoods; the separation of family members (due to high airfares, the high cost of gasoline, or gasoline rationing); and anxiety and depression.

Rising North Sea oil production was a significant factor in keeping oil prices under control in the 1970s, 80s and 90s. Production peaked at 6.4 million barrels per day in 2000 and since then, declining North Sea Oil production is one significant reason that oil prices are now rising exponentially.

The amount of proven oil reserves awaiting to be exploited fell last year for the first time in a decade, according to new figures released today. The amount of crude left in the ground was 1.258trn barrels - 3bn less than this time last year. These figures, revealed in the BP Statistical Review of World Energy, are probably the result of a slump in drilling activity due to a fall in the price of oil last year - from $150 per barrel to $30. At today's rate of use however there is still enough oil to last the next 42 years, according to the oil company although those concerned about Peak Oil say we are closer to running out given demand is expected to rise strongly in the short-term.

I now believe that the hypothesis of a near or medium-term peak in the world's oil supply is confirmed beyond any reasonable doubt. A shift in emphasis that speaks to reducing our demand for oil and examining alternatives to oil is now required. I will be taking that road in the future, leaving specific concerns about the oil supply behind.

The Times has an update on the efforts of western oil majors to secure Iraq's oil, noting "The big players have been shut out since nationalisation in 1972. Now they see their chance to get in" - Oil giants are itching to invade Iraq. Yet since the Iraqi government nationalised the industry in 1972, oil's main players have been shut out. Years of war and violence have kept them at bay. That may be about to change. In October the Baghdad government kicked off a round of bidding to allow international oil companies to exploit eight of the country's largest oil and gasfields. BP, Royal Dutch Shell, Exxon Mobil and Gazprom are among the 35 companies that have put concerns about security to one side and thrown their hats in the ring. The deals would pave the way for the first significant foreign investment in the country's biggest fields in more than three decades. Some side deals have already been signed - last month Shell announced a $4 billion (£2.7 billion) gas joint venture with the Iraqi government and opened a permanent office in the country.

I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil - Alan Greenspan (2007) The Guardian had an interesting article recently on the auction of 40 billion barrels of Iraqi oil reserves. The biggest ever sale of oil assets will take place today, when the Iraqi government puts 40bn barrels of recoverable reserves up for offer in London. BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani. Access is being given to eight fields, representing about 40% of the Middle Eastern nation's reserves, at a time when the country remains under occupation by US and British forces. Two smaller agreements have already been signed with Shell and the China National Petroleum Corporation, but today's sale will ignite arguments over whether the overthrow of Saddam Hussein was a "war for oil" that is now to be consummated by western multinationals seizing control of strategic Iraqi reserves.

The Business Insider reports that OPEC is expecting oil at US$75 a barrel by the end of the year - Even If Oil Hits $90, OPEC Won't Increase Production. Oil prices could reach $80-$90 a barrel by early next year, but OPEC will not increase its output until a huge amount of over-supply has been absorbed, the group's Secretary General said on Tuesday. OPEC officials have been nudging up their price aspirations since Saudi Arabia's oil minister said last week an oil price of around $75 could be achieved later this year and would not undermine a tentative global economic recovery. "The price will go to $80-$90 maybe at the beginning of 2010," OPEC's Abdullah al-Badri told the Reuters Global Energy Summit. "I don't think the price will go down... By the end of the year we'll see $75. $80-$85 is possible -- not with the demand we see at this time, but if demand picks up month after month, then maybe we'll see this price."

Summary: The bad news is that much of the good news about energy is wrong. Repeated so confidently by so many for so long, these fallacies have become a major obstacle to our preparation for peak oil. This post examines one such fallacy: that the world has massive reserves of unconventional oil, and that those will prevent peak oil. This post substantially expands to my replies in a discussion with M. Simon, lifted from the comments to "A powerful perspective on the candidates for President of the US". M. Simon posts actively on his blog, Power and Control, and at Classical Values- an influential libertarian weblog discussing politics, current affairs and pop culture (to which the Instapundit frequently links). M. Simon is an engineer, and involved in some cutting edge projects.

http://www.youtube.com/watch?v=vBC2YqFuZ8k From the people who brought you Economic Collapse... It's another Wall Street Dip Shit! Meet Mr. Stephen Moore of the Wall Street Journal, Heritage Foundation, and Cato Institute [Stephen Moore] "I'm not a believer in peak oil, I'm a big believer in the Julian Simon idea that these [oil] are infinite resources, not finite resources. And the reason for that is that oil comes from the human mind, it doesn't come from the ground! [T. Boone Pickens] I don't understand, Steve, when you said oil is not from the ground but it's in the human mind. What does that mean? [Stephen Moore] Well what I mean is that it's human ingenuity that uh...it used to be that people first discovered oil it was just this black gloop that came out of the ground and nobody had any use for it...Do you agree with that?

Peak oil theory states that oil will have a beginning, middle, and an end of production, and at some point it will reach a level of maximum output. It is estimated that approximately half of all oil...

"As the Deepwater Horizon rig disaster continues to unfold, the peak oil community has a "teachable moment" in which it can illuminate the reality of our energy plight. The public has had a crash course in the challenges of offshore oil, and learned a whole new vocabulary. They are more aware than ever that the days of cheap and easy oil are gone. What they do not yet grasp are the challenges in transitioning from fossil fuels to renewables. The Greens (anti-fossil fuel agitators) want to end offshore drilling, but don't realize that their alternatives are in the wrong scale or the wrong time frame to make a difference. The Browns (the fossil fuel industry) are in full damage-control mode while rapidly losing the public trust. Meanwhile, the politicians are focused on who's to blame and who will pay, while skirting the fundamental problem of our addiction to oil."

There are 98 oil producing countries in the world, which makes it seem as if we should have a lot of choices in our sources. However, 68 of those countries have, like the United States, passed peak production. 60 of them are in terminal decline. That means that the remaining 30 will have more, and more, and more control every single day that we continue to use oil. If we want to reduce our demand for foreign oil, there is exactly one way in which it can be done: use less oil.

The situation is not good. Our average gasoline price just climbed past $4 a gallon and all indications are that it will continue to rise. After Goldman-Sachs made headlines by telling us that oil is going to $150 or maybe $200 a barrel in six months or maybe two years, Morgan Stanley announced that oil was going to $150 dollars a barrel by the 4th of July. Not to be outdone, the CEO of Russia's Gazprom, weighed in with a forecast of $250 oil in the "foreseeable future." As oil jumped $11 in a single day to just below $140 last week, all of these estimates seem plausible.

The end of the fossil fuel era may end with a whimper, not a bang -- just with lines for gasoline that are too long. Consider these two pieces of unsettling data: (1) The number of cars on the road globally will hit 1 billion by 2011. (2) The world's oil will peak by 2015, according to the CEO of Shell.

Breaking our dependence on fossil fuels isn't only a solution for halting our climate changing emissions, it's also about gaining energy independence and being cautious about when we reach peak oil. The Rocky Mountain Institute has created a new oil map web tool that intricately illustrates this concept. RMI partnered with Google to create a visual representation of how much oil the U.S. has imported, from where, and how much we have spent during every month since 1973.

Drawing parallels with the current financial meltdown, Matthew Simmons, the CEO of Simmons & Company International, expresses his alarm about gasoline stocks being the lowest in several decades and refinery production down following recent hurricanes. He warns that if there were a run on the "energy bank" by everyone topping off their gasoline tanks, the U.S. would be out of fuel in three days, and grocery shelves largely emptied in a week. In an interview plus excerpts from his presentation at the Association for the Study of Peak Oil (ASPO-USA) conference on September 22, 2008, Matt highlights the risks and vulnerabilities in the finished oil products system, and answers audience questions.

OIL PRICES are plummeting, and the government ought to do something about it. You thought that the dramatic decline in the price of oil was one of the few good pieces of economic news lately? Well, in some ways of course it is. As the Post's Steven Mufson reported last week, the price of oil had dropped 38 percent since peaking two months ago.

Auto and Oil Industries' Impacts on Energy Has the United States government actually colluded with major auto manufacturers to keep fuel economy down over the past few to several decades? Has the government actually scratched backs with the oil industry in manipulating prices, alternating between wallet-crushing peaks and consumer-pacifying lulls in pricing?