Russian Oil Has Peaked

Russia was once hailed as the most promising region for oil exploration outside the Middle East. Not anymore.

Production in the world's second largest oil-producing nation has peaked, the Financial Times reports.

The article's source is 52-year-old Leonid Fedun, vice-president of Lukoil, Russia's largest independent oil company. From the article:

[Fedun] told the Financial Times he believed last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime.”

Fedun explains further in the BBC:

"When the well's productivity falls, you have to keep drilling more and more," referring to the steady depletion of older fields [in Siberia].

"You have seen it in Alaska and the Gulf of Mexico and now you are seeing it in Siberia."

The news sent oil prices soaring to a fresh new high -- $112 per barrel.

It's safe to assume that Shell's CEO Jeroen van der Veer wasn't at all surprised. In January, he let it slip that in seven years, world demand for oil will outstrip supply. That means global peak oil by 2015 by his calculations.

And now that it's clear that the markets are feeling "peakish," perhaps Big Oil and Wall Street investors will take a page out of the playbook of at least one fabled Texas oil man, T. Boone Pickens.

This month he will make the first down payment on 500 wind turbines at $2 million a pop, the Guardian reports.

His plan is to build the world's largest wind farm. It will be five times bigger than today's record-holding wind farm, and when finished, it will supply 4,000 megawatts of electricity. That's enough to power about one million homes.

And his master scheme is even more grandiose. He's convinced that an army of wind farms plus solar plants are the energy solutions for America.

And peak oil is a big reason why:

"Oil fields have a declining curve - you find one, it peaks and starts downhill, you've got to find another one to replace it. It drives you crazy! With wind, there's no decline."

Too bad that kind of common sense can't be legislated by Congress.

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