This is that the US government is basing its energy strategy on a gigantic fraud. This is why the hard science never quite matches the soft policy conclusions, and why the figures for reserves, production and consumption do not match up, to the extent now where it's not just their stats that are lousy: the USGS seems no longer capable even of simple arithmetic, as Laherrere points out.
According to Ft.com, oil spot prices today reached another post-Gulf war high. The 'price spike' is turning out to be something more, and the systematic mendacity of government is no longer sufficient to hide the reasons why. The plain fact is that even if it wants to, Opec is probably no longer capable of supplying the world's hunger for oil, at a time when Asia is on the rebound and while Nopec production in the North Sea, Mexico, Canada and of course the US itself, is declining as reserves diminish and the Hubbert peak arrives.
The fraud perpetrated by US government has two main and several subsidiary targets: complacency about reserves and about the capacity of the global energy system to meet demand (it's not just oil, it's electricity, too) is encouraged (a) to stop American consumers and motorists from panicking and (b) to discourage Opec from asserting its market clout (forlorn hope, obviously).
The Hubbert Peak in world oil may come this year or several years down the line; it really doesn't matter, because the consequences are already being felt. As the CEO of Arco said recently, ‘We've embarked on the beginning of the Last Days of the Age of Oil’. Emerging geopolitical crises in the Persian Gulf and Caspian basin will be one clear manifestation; others will be queues at filling stations, price-shocks and a radical reordering of the world's monetary and financial flows. The longer term consequences will be still more profound.
Laherrere's paper is archived at the Crashlist site:
http://www.egroups.com/group/CrashList
Mark Jones