Oil - oh how quickly we forget

I frequently get emails from a friend of mine showing each time the oil price goes down. I won most of our bets last year, with oil shooting up to $147. Even though my friend rubs his hands in glee now, he admits that if he had to spend money on one stock this year it would be SASOL.

Personally I don't care whether the media uses words like 'glut' or the 'the world is awash in oil'. We should be, since we're at peak ever production (actually slightly past it). I do care about the fact that we have invested our homes and highways, our jobs, in a resource that is FINITE. Our population grows each and every day, the number of vehicles that get added to our roads every day is enormous.

My friend argues that you have to also subtract the number of vehicles being replaced (turned into scrap, and discount the technological savings of more efficient energy use by better engines. But then I have this question. Look at any one, or all the big cities in the world. What do you see? Congested highways. Traffic jams. Pollution. Tell me, how efficient is a car that is stuck in traffic?

Yes, demand has dropped for now. It's temporary. Depletion is permanent. And it's happening. Saudi Arabia past its peak last year, and Non Opec peaked in 2005. Let me say that again - Depletion of a finite resource is permanent. Once it is gone its gone. Meanwhile, are people trying to conserve energy since we're awash in oil? They're thinking: "Why should we?" Oh how quickly we forget.

clipped from www.msnbc.msn.com NEW YORK - Supertankers that once raced around the world to satisfy an unquenchable thirst for oil are now parked offshore, fully loaded, anchors down, their crews killing time. In the United States, vast storage farms for oil are almost out of room. As demand for crude has plummeted, the world suddenly finds itself awash in oil that has nowhere to go. It’s been less than a year since oil prices hit record highs. But now producers and traders are struggling with the new reality: The world wants less oil, not more. And turning off the spigot is about as easy as turning around one of those tankers. One fear is that with oil prices so low, companies will slash drilling and production, setting the world up for an energy crunch that would send prices soaring. The number of oil and gas rigs operating in the United States has fallen a staggering 39 percent since August.