Celebrating Political Peak Oil: The Only Kind of Peak Oil the World is Likely to See

In Kurdistan, North Iraq, oil bubbles to the surface--Kurds are at risk of drowning in oil. But since politicians in Baghdad are dragging their feet on oil legislation, the oil cannot be sold. Political peak oil.

“I am not expecting to find another [giant oil field like] Kirkuk,” says Ashti Hawrami, Kurdistan’s plain-talking minister of natural resources. “But I think we will find a lot of fields that add up to Kirkuk.” If he’s right, Kurdistan’s three provinces could hold more than 25 billion barrels of crude. That’s roughly five billion barrels more than the remaining proven reserves of the U.S.

So what’s the problem? Companies pumping oil in the semi-autonomous region can’t export their oil until Baghdad straightens out national oil legislation. So the new production isn’t landing on world markets or doing anything to take the punch out of rising oil prices. Meanwhile, the companies are spending millions and watching their share prices sink.

Kurdistan and Iraq put a finer point on the “peak-oil” debate wracking the industry: No one disputes oil is getting harder to find. The question is whether the current problems are “below ground” or “above ground.” That is, is the world’s oil keg ringing hollow, or is the tap just off-limits to oil companies thanks to issues like resource nationalism, sketchy politics, and violent insurgencies?

For a long time, many Western companies and energy experts like Daniel Yergin of Cambridge Energy Research Associates have maintained that the problem is above-ground—even where oil is plentiful, they can’t get at it for one reason or another. __WSJblog

Of course, North America is sitting on trillions of barrels of oil-equivalent that Barbara Boxer and Nancy Pelosi refuse to allow US energy producers to access. Why? Global warming catastrophe fears. Oh, and an apparent deep desire to inflict economic hardship on Americans in the runup to the November elections. The opinion of Boxer, Pelosi, and the current Congressional leadership seems to be that if times are hard, the Republican Party will be blamed on election day.

But political peak oil of the Boxer/Pelosi variety can turn around and bite the two Peter Principle trophy hags in the sagging sacroiliac. There is a long time between now and November, ladies.

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