In order to understand the energy situation that we are in, two things must be understood that all too frequently are not.

First, We cannot run out of oil. As soon as I see someone talking about running out of oil, I know that they as least do not understand the problem, maybe that they are incapable of understanding the problem. The problem is that we are losing control of the cost of energy, and our economy may not survive that situation.
We may very well end up in a severe depression with 25% of the world original endowment remaining in the ground.

Second, Money cannot solve this problem. This problem is about energy. If you think in terms of money you will never understand the problem. You must think in terms of energy return, then you could translate to potential money returns. Money is not real, it is a man made abstraction for wealth. We have made assumptions about this abstraction that will not hold true in a falling energy economy.

Right! Kevin would really impress me if he put some money where his mouth is. It doesn't have to be alot of money, but some would at least send a signal that even he believes this.

Anderson,

Funny analogy, but yeah. We have never gone through a complete Hubbert cycle on anything. I suppose someday we will, but I have yet to see any compelling argument that we have tol/gasoline.

Drum: ... My life will also be made more difficult by the fact that the galleys don't contain any of the graphs and charts that will show up in the finished product, and I have a feeling those graphs and charts do a lot to make the text more understandable. Sigh.

But I shall persevere, and I expect that shortly I will be a minor expert on the arcane details of carbonate rock formations, Gas Oil Separation Plants, and geostatistical modeling. I'll bet you can hardly wait.

I assume this is some sort of attempt at self-mocking humor? If not, however, it does explain why he is so much smarter than the market. I would imagine that becoming a minor expert on geostatistical modeling -- without the aid of charts and graphs, no less! -- in a few days requires an extremely keen intellect.

That is truly impressive. I'm going to go out and buy some oil futures. If a man that smart says it, it has to be true. Hopefully I'll get into the market before he and the Washington Monthly folks bid the price of 2010 oil up.

But it'll still be a steep learning curve for those who insist on solutions perfect in every regard to accept that no solution is perfect, that all solutions have downsides, that people need to actually take some responsibility in aknowledging and accepting the costs of those downsides.

While most petroleum is burned for its energy value today, I suspect we'll want it more for its other uses, from pharaceuticals to clothing, in the mid-term future.

This sounds a bit like not "actually" being broke, because there's all that loose change under the sofa cushions.

But of course your main point is correct; I do however think the adjustment to another energy sources is going to be unprecedentedly painful, given that we've never been *so* dependent on so much technology associated with a single source.

I think that there's no real question that the energy that will be used in the future (for everything from transportation to heating) will be electricity. But the research has to be done on how to efficiently store that energy. But hey, at least there's already a distribution network in place. That's more than you can say for hydrogen.