This is what our friend, Noam Chomsky has to say about oil in general.
"The basic theory is incontrovertible. The only questions have to do with timing and cost. ...
The date can be pushed back much farther if more costly (or maybe some to-be-discovered improved) technology is used. As for the estimates of cost, by reasonable standards one could argue that oil is far under-priced. In real terms, it's not particularly high now as compared with other commodities, from some reasonable base line. And low-priced oil leads to heavier use and less effort to create sustainable alternatives.
That I think is a far more serious problem than production peaking. In fact, one could argue that the earlier production peaks, the better off the human species (and a lot more) is, because of the effects of unconstrained use of hydrocarbons on the environment.
Talk about "shrinking our economies" is pretty meaningless. Our economies would shrink substantially if we got rid of huge expenditures for the military, for incarceration, and other highly destructive activities. Sustainable economies might lead to highly improved quality of life."
And some more about Oil pricing,
"Regarding the rising price of oil, the first point to remember is that the price of oil is not high by historical standards.
I haven't seen an exact calculation, but I wouldn't be surprised if the real price per barrel is maybe half of what it was during the 1970s peak -- which itself brought oil to the level of other commodities, tracing from the end of the World War. The oil price had been kept artificially low until the mid-1970s quadrupling of price -- which followed a far higher increase in the price of US-produced coal and of US agribusiness products, and was not opposed by the US or the energy corporations for pretty good reasons. Oil and "gas at the pump prices" now are given without adjustment for inflation, which is almost meaningless.
I'm frankly skeptical about the theory you report. I suspect that the oil ministers and analysts are accurate in saying that maybe 1/5 of the price is traceable to investor concerns about security, stemming from the US invasion of Iraq, US support for Israeli expansion into the occupied territories, and al-Qaeda-style attacks on the Saudi monarchy and its whole system. And the rest is easily attributed to normal factors.
It might also be worth noting that there would be great advantages to a much higher price. In our more or less insane quasi-market system, the only means of something like rational planning is market forces. So a very badly needed shift to a sustainable economy cannot be undertaken unless driven by much higher prices. And the problems ahead from irrational use of hydrocarbons might turn out to be extremely severe."
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