PEAK OIL - EPOCHAL EVENT OF OUR LIVES

[sumisu]

RonnieD,

Thanks for the post; it's good to have divergent opinions on the Peak Oil topic.

I tried listening to the Alex Jones interview and it kept cutting off, but I did get bits. I was hoping that his guest, Dr. Nick Begich, would be a geologist, but he was not. That doesn't mean that he does not a knowledgeable man; quite the contrary, after looking at his background.

However, I bring up geologists, as they are most likely to know what is in the ground, based on education and experience. I regularly speak to a geologist who spent 50 years in the oil fields. He has provided me much insight into the Peak Oil topic. He has indicated that the oil that remains is the most expensive and that the current oil problem is related to an overwhelming demand from China and India, which are both siphoning off oil from the world markets. AND their populations are dramatically increasing.

Alex Jones mentioned that 45% of the crude oil increase was due to the declining value of the dollar. I agree with Alex on this point. If we take $75 (approximate price of a barrel of crude) times 55% to adjust out inflation, the price of crude is a somewhat respectable $41.25. Take out a war premium, let's make it a conservative 10% and crude would be just over $37. Now oil does not look that expensive, in view of what is transpiring in China and India.

Before I reach any conclusion about any topic, I like to quantify things, if possible. I will provide some links, as I explain. Below I compared the profit margins for Exxon-Mobil, Coke, and Microsoft, three totally different industries.

I found the following in Yahoo under Key Statistics, Profitability,:

Exxon-Mobil: 11.32%
http://finance.yahoo.com/q/ks?s=XOM

Coca Cola: 21.85%
http://finance.yahoo.com/q/ks?s=KO

Microsoft: 28.45%
http://finance.yahoo.com/q/ks?s=MSFT

Admittedly, this is only one statistic, and one statistic does not make a complete analysis.

But from all of the clamoring about Big Oil in the media, I did not expect this relationship to exist in this order for these three companies. In fact, I thought the results would be inverted to what I found.

I’m trying to keep an open mind on Peak Oil from two viewpoints. First, if it does occur, it would be good to have energy stocks ranging from oil, natural gas, coal, uranium and alternative energy in a representative portfolio. Secondly, I hope that the United States becomes energy independent from parts of the world that do not particularly like us.

Planning for the future, both as individuals and as a nation, would be the best thing in an unpredictable world.

sumisu