What peak oil? Why an oil glut is ahead … In May, less than a month after the blowout of the Deepwater Horizon oil rig in the Gulf of Mexico, a key milestone was achieved with little notice: Total U.S. supplies of petroleum and products refined from it (including the Strategic Petroleum Reserve) surpassed 1.8 billion barrels, reaching the highest level in the last 20 years. Since then the total has continued to edge upward, hitting 1.87 billion barrels in the week ended August 27, according to the Energy Information Administration. Despite the Iraq War and the resulting production disruptions, despite the moratorium on drilling in the Gulf, despite turmoil in Nigeria and ongoing cross-border transshipment quarrels in Central Asia and the multiple, repeated declarations that "peak oil" has arrived and supplies will inevitably dwindle, the United States has more petroleum on hand today than it has had since at least the beginning of the first Gulf War. – CNN

Dominant Social Theme: Please do not peer to closely at the man behind the curtain.

Free-Market Analysis: Here at The Daily Bell we continue to cheerfully cover the degeneration of the elite's dominant social themes. (See other story in today's Bell.) The 21st century's truth telling via the Internet and the endless ravel of the financial crisis has proven increasingly lethal to the attempts of various fear-based promotions in our view. As we continually monitor the waxing and waning of these promotional schemes (that is all we try to do, in fact), we are astonished by their growing lack of effectiveness.

Many are well aware of the foundering of the global warming meme, but the rationale for the Afghan war is in deep trouble along with the promotional arguments (narratives) that accompany it. Similarly, central banking is not held in high esteem, though it is one of the most important of the elite's promotions; and in our view the Federal Reserve's credibility especially has been badly tarnished. It is increasingly difficult in fact for the elite to argue that the command-and-control "capitalism" of modern regulatory democracy is in any way effective or even necessary.

One would think that questions about 9/11 would have subsided by now but in fact the questions only continue to grow on the Internet and show no signs of subsiding. The Tea Party movement in America has undermined the legitimacy of the two-party duopoly and people are actively seeking out (shudder) libertarian solutions.

The Keynesian meme that was supposed to provide intellectual cover for financial authoritarianism increasingly gives way to Misesian, individual Human Action. The European Union seems to be degenerating and now there is this – intimations of mortality for an especially pernicious promotion: Peak Oil. Here is the conclusion of the article excerpted above:

More than anything, though, the looming oil surplus calls into question the concept of peak oil, at least in the near future, along with the whole science of forecasting future oil supplies. Adam Brandt, a professor at Stanford's Department of Energy Resources Engineering, released a study last month examining the various models that have been used to predict the future of world oil supplies. "Data do not support assertions that any one model type is most useful for forecasting future oil production," Brandt concludes. "In fact, evidence suggests that existing models have fared poorly in predicting global oil production." (- CNN)

In fact, as we have long pointed out the entire premise of Peak Oil was flawed. It was rooted in the Malthusian pre-neo-classical perspective that trends (once observed) were not to be affected by the perceptions of those who composed them. In other words, according to Thomas Malthus, if one observed that population would eventually exceed the food supply, people themselves were assumed, like potted plants, to acquiesce to the trend without taking further action. They were supposed to starve, passively, along with their families.

Eventually, the classical perception of economics was superseded by neo-classical economics with the Austrian school's magnificent perception of marginal utility – the idea that prices were variable especially at the margin and only the market itself could determine these values. Marginal utility along with Adam Smith's concept of the Invisible Hand underpin (excuse the pun) the modern economic revolution started by the Austrians and sublimely expressed in Ludwig von Mises' opus Human Action.

Mises postulated that the progress of nations was actually the progress of individuals. There is nothing accomplished by the ritualistic recitations of group think. There is only the spontaneous Hayakian cooperation of individuals pursuing their own enlightened self-interest. Given these sentiments expressed so eloquently in the past 50 years, there are hardly any words in our admittedly sparse vocabularies to describe the condescension and ignorance of the Peak Oil meme.

The Malthusian idea that people will sit patiently "freezing in the dark" as Big Oil struggles unsuccessfully to cope with falling oil supplies was an obscene variant of past condescending interpretations of economics. It never made sense to us and we have stated it emphatically as opportunities have presented themselves. We have long pointed out that oil may indeed be abiotic, the result of natural processes deep below the earth's crust.

And we have also pointed out how Big Oil has funded Green environmental movements to ensure that much of the Western land-mass is now off-limits for drilling. The result is that drilling is done in third-world countries where the supply chain is extended and available for endless cost-elaborations and delivery-risk. It is also no coincidence in our view that off-shore drilling has become a popular alternative oil-drilling methodology.

It is not expensive to drill on land but to drill at sea and at depth is monumentally costly and dangerous. This sort of barrier-to-entry favors Big Oil considerably. Finally, all who wish to can go onto YouTube and see for themselves the various energy alternatives developed by clever entrepreneurs. Curiously these never seem to be reported on by the mainstream media, which is continually concerned with the false, fear-based promotion of "conservation" and reduced energy consumption.

Thus it is, we are delighted that the Peak Oil meme is now being questioned by such state media excrescences as CNN. We note once more as we have before that there is a growing trend in mainstream media to reset the boundaries of permissible conversation about the elite's various promotions. This is in line with our predictions that the elite itself will have to take "a step back" as the truth-telling of the Internet continually undermines long-running but increasingly unpersuasive themes.

There are many more non-elite than elite. If the many billions cannot be convincingly instructed that the current shape of society is predestined and necessary, then all the legislation in the world will not avail those who seek to dominate society through lies and wars. Once credibility has been mislaid, the law itself may be seen as increasingly illegitimate. And once this happens, the elite is exposed to a good deal of "blowback."

After Thoughts

Promotions are most important to the elite, and the inability of the elite to convincingly implement them in the 21st century, if that is what is happening (and we argue this is so) has numerous ramifications from both an investment and real-world industrial standpoint. Most importantly, the larger generational, familial campaign of the elite to impose some sort of world governance is increasingly at risk. We have long predicted this and see no reason to revise our analysis. The crumbling of the monstrous, mainstream-media lie that is Peak Oil would be most gratifying.