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# HP Epstein Santa Monica Bursting columnist’s bubble
- URL: https://www.smdp.com/hp-epstein-santa-monica-bursting-columnists-bubble-editor/
- Published: 2008-06-27T15:00:00.000Z
- Updated: 2026-10-24T19:59:33.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By Don Solosan Santa Monica*

Kenny Mack, I don’t think you can compare oil speculation with investment in the Internet or housing (June 25, page 5, “Bursting the oil bubble”). Because in each of those cases, investments went toward expanding Internet services and the supply of housing. Investment in actual oil production should bring more oil to market, thus driving down the price.

Oil speculation, as I understand it, is no different than investors betting on whether or not the prices of farm commodities will rise or fall. You haven’t seen the price of pork bellies rising enormously because of this activity, have you? No. Because speculating is separate from the pricing of the commodity.

So what is there to blame? Have you tried peak oil? In the mid ‘50s, a Shell geologist estimated that U.S. oil production would peak in the late ‘60s and early ‘70s. He was ridiculed for this, but as it turns out, he was also right.

U.S. oil production peaked in 1970, and even with bringing Alaska’s resources on line, we’ve never managed to produce as much oil again as we did in 1970.

As it happens, the production of sweet, light crude (the easy to get out of the ground, easy to process stuff) peaked in 2005\. Ever since then, the oil companies have had to turn to oil fields that are harder to get at (they’re deep under water), smaller (provide less per dollar invested) or harder to produce (the oil sands in Canada) just to keep the oil supply level. Naturally, this drives up the price of oil.

The consequences of peak oil are significant in a world driven by a “growth” ethic. We’ll never again have enough cheap energy to squander in your gas tank. All the by-products of petroleum from paraffin wax to asphalt are getting more expensive. And since fossil fuels touch everything from generating electricity to running supply ships to growing food — everything is getting more expensive.

*Originally published in the Santa Monica Daily Press print edition on June 27, 2008.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/062708.pdf?ref=smdp.com)