There’s really nothing much more important than knowing where we are in the oil story…but if you follow the hypesters from Wall Street or the technology lovers, you're likely to be misled. A particularly wrong piece of analysis was recently released by John Mauldin, who has both bought into the hype and loves technology.
He even singled out our friend James Howard Kunstler for being wrong, yet then goes on to be spectacularly wrong himself, which is ironic:
I used to get the occasional letter from James Howard Kunstler, who would tell me that whatever letter I had just written was completely bass-ackwards, and how his books explained that we were going to run out of energy and then collapse. His books (Wikipedia lists about a dozen) and dozens of others warned us of Peak Oil. (For the record, James, a certain longtime editor on my staff made sure I got all your letters, reports, and more, as he is firmly in your camp! I kept smiling and saying that he was (and is) wrong; but Charley is a phenomenal editor, and you put up with a few quirks for brilliant editing that makes you look better.
I have written for years that Peak Oil is nonsense. Longtime readers know that I’m a believer in ever-accelerating technological transformation, but I have to admit I did not see the exponential transformation of the drilling business as it is currently unfolding. The changes are truly breathtaking and have gone largely unnoticed.
Look at the above chart for a few moments; it’s truly staggering. In just seven years, the amount of oil per well in some shale plays has risen by a factor of 10! That is almost all due to new technologies that are increasingly coming online.
I normally wouldn’t spend much time taking apart a piece of “analysis” that is so spectacularly wrong. But in this case it’s instructive, useful, and of interest.
Reader Eannao also asked about this report:
Hi Chris. I'd be interested to hear your take on John Mauldin's most recent 'Thoughts From The Frontline' letter, where he puts forward the case for lower energy costs going forward. As I greatly respect both of your opinions, I'd love to hear your perspective on his arguments.
by cmartenson 
