Wanted: 4 Saudi Arabias

In the same article yesterday that cited oil dipping to $54 a barrel, the lead economist at the International Energy Agency (IEA) noted production is declining worldwide. Looks like economic activity is falling faster than production so the price is still dropping. But here's the cruel and ironic part: 

Recent oil project delays announced by several companies could spark a supply crunch by 2010, Birol warned.

So the same economic conditions that are keeping price down today are also scuttling exploration and development projects that could increase supply in the future. And even accounting for the current global economic slowdown, expected increases in demand mean a shortfall is looming:

The IEA ... forecast that extra oil production of 45 million barrels per day was needed by 2030 to offset declining oilfield output. That [is] more than four times the current capacity of Saudi Arabia, which is the world’s biggest oil producer.

Personally, I feel that one Saudi Arabia is more than enough, and that there's very little chance of us finding the equivalent of one more, let alone four. So we better get used to doing more with less, or figure out a way to make new fuel fast. Enjoy the low prices today ... the days of inexpensive oil are certainly numbered.