Out On A Ledge
After looking over recent oil production and export data, coupled with recent reports of OPEC cuts in the works, I think it's safe to say that we are Post Peak now.
I don't believe that OPEC really needs to cut production to bring prices up. They'll be coming back up after the election anyway. I think they are seeing slides in their production, and they wish to give the impression that the decline is intentional. This will lead the public to believe that OPEC is in control. If OPEC were to announce that they are in decline and helpless to counter it, they'd be toast.
We're entering a period that resembles the post 2001 trough except that there will be no new high when it's over. The fields will too far gone to be ramped up to a new peak. So we may see oil production extend out into a ledge for a time, if we're lucky.
This unfortunately is going wreak havoc with the world financial systems. Governments and banks will frantically try all sorts of measures to rebuild their economies, but most of these measures will do more harm than good. Without a growing energy base to power their industries, the money will be loaned without being returned. Without growing industry, there aren't sufficient profits to repay interest on the loans.
I think it's likely that we'll drop to 2002 production levels, while exports will go much lower. This would be at least a 6% drop. This is the energy equivalent of 600 nuclear power plants. I don't see alternatives picking up the slack in any meaningful way.
I was wrong previously in calling the peak previously. I think I called it in 2005. So I'm taking this chance to get it all wrong again. :) Now I'm saying it's 2008...
Good Luck All!