"When the large supply disruptions of 1973 and 1979 led to skyrocketing prices, nearly all oil experts said the underlying cause was resource scarcity and that prices would go ever higher in the future." -- Lynch
"Nearly all oil experts" is a lie. Even in 1973, it wasn't a mystery that OPEC hammered out a consensus to stick it to importers in a power-play for more $. That scare didn't last, though, because OPEC and the U.S. quickly realized that volatile oil prices meant that the Sheiks couldn't depend on a steady long-term cash flow (especially since this was the early stages of Western stagflation), and the U.S. couldn't commit to set contracts because of refinery and reserve projections. The prices levelled off. The 1979 oil scare resulted directly from the Iranian-U.S. hostage crisis. When that ended, again, oil prices levelled. These two isolated reasons had nothing to do with Peak Oil, obviously. (Oil production was increasing throughout the 70s.)
"The oil companies diversified their investments — Mobil even started buying up department stores! — and President Jimmy Carter pushed for the development of synthetic fuels like shale oil, arguing that markets were too myopic to realize the imminent need for substitutes." -- Lynch
The big oil companies today are also positioning themselves to be the beneficiaries of alternative energy development, infrastructure, and sales. But it's specious to conflate that with a guaranteed successful transition simply because interest and investment will shift, as they must. (Oh, and shale oil, in Colorado or Venezuela, in 1979 0r 2009, is a non-starter. Just because one can name an option doesn't automatically make it feasible.) As for the last sentence, I'm shaking my head. Does Lynch take the readers of this dreck for blank-look dufusses (dufi?), agreeing that Carter had more long-term knowledge of harsh oil supply realities than field geologists for the billion dollar companies? Leaving aside this laughable assumption, Lynch missed the irony that Carter, of course, was wrong. Oil was still churning, and it was goopy love all over again throughout the 80s. Today's reality can in no way be compared to 1979. All Lynch has to do is look at production-to-consumption ratios between those years.
The oil companies, today, are far from "myopic". They, more than anybody else, know that their core product is spouting its swan song. But whether or not they maintain close-to-top profits from using their available liquidity to buy up "department stores" (not a good idea in a U.S. economy where 72 % of the GDP is based on consumerism, and where the value of the dollar is tanking) or speculative ground-floor alternative energy finger-crossers such as, for example, a high-tech conversion machine for the infectious medical waste of thermal depolymerization, none of the positioning, money, research, and persistence, in itself, will guarantee an alternative breakthrough which will, in any large-scale practical sense, replace the boon of cheap oil.
"All sorts of policy wonks, energy consultants and Nobel-prize-winning economists jumped on the bandwagon to explain that prices would only go up — even though they had never done so historically. Prices instead proceeded to slide for two decades, rather as the tide ignored King Canute." -- Lynch
Hmmm, I remember when oil was $15 a barrel. Doesn't matter, though. There are many complex reasons for the swings and stops of oil pricing throughout the years. Oil price and the U.S. dollar have a corresponding see-saw structure whereby when oil goes up, the world-pegged U.S. dollar goes down (this can be easily seen when the price skyrocketted less than a year ago to $147 a barrel). Think there may be reasons, easily transparent, as to why the U.S. gov't manipulates the economy in order to keep the dollar up and oil down? Americans use 25 % of the world's oil, yet they get it cheaper than any other country in the world, developed or not. A gallon of gas still costs, even in the "tanking" U.S. economy, about $3. In Canada, it's about $4, in Australia about $6, in Continental Europe about $7, in the U.K. about $8, and in some parts of the third world, it costs a month's wages to fill up the tank, even for those who can afford a car. Bush Jr., wisely political if cynically opportunistic, knew that gas prices had to remain depressed in order to keep the economy purring, if not roaring. But the tiger in the tank now has a sad tale, and is drowning in exponentially increasing caustic debt. The price of oil has been climbing steadily again (currently about $70 a barrel), and as demand from Chindia keeps rising, the U.S. dollar keeps falling, and getting de-pegged by major players and coalitions (European Union, China, Russia, OPEC), exporters hoard, and production stagnates and recedes, U.S. gas prices will rise noticeably. Of course, they'll also rise in the rest of the world, too, but since this article is written from a typical American perspective -- meritless optimism -- it's proportional to point out the chasm beyond the mountaintop.
Final entry next.