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ILN Today Post

ILN-ergy | Part Two: PEAK OIL – Are We There Yet?

ILNergyOil and Natural Gas Boom and Bust Cycles and Their Impact On The Practice of Law

Part One of this article examined the peak oil theory, and specifically discussed the significant increase in world-wide production of oil and natural gas caused in part by the prolific use of hydraulic fracturing and horizontal drilling in oil shale formations. Thanks to these and other technological innovations and heavy capital investments coupled with aggressive entrepreneurial risk taking, world-wide production has reached new records. These production records are occurring at a time when relative consumption is beginning to level off and even decline in certain regions(1). Producers were encouraged to see the price of oil stabilize at around $60 per barrel during April, May and June(2), encouraging some resurgence of drilling activity. Static demand combined with economic chaos in Greece, continued discussions between the West and Iran over Iran’s nuclear program(3)  and the resurgence in United States production(4)  has caused the price of oil to again slide to the low $40s per barrel.

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