I'm sure you've all heard of the concept of peak oil. I'm sure not all of you understand why it's a total crock of shit. For that, you've got this WSJ article to thank.

Personally, I'm beginning to feel just a tad contrarian on oil. Not that I'd start shorting it or anything, but enough that I find myself stifling condescing chortles when I think of a certain weird possibility for oil prices. Here we are in America, beginning to curb fuel consumption; which I think is a flashing red light that consumers are fed up. It took us a while, but we've decided that hybrids and efficiency technology have finally become comfy enough for our fat, lazy asses to begin buying into. The reason I think it's such a turning point is that Americans rarely change consumption habits, but when we do we tend to take an equal amount of time changing back. Muscle cars all but disappeared after the fuel crunch in the 70's, a fuel crunch that ushered in the era of Honda, Toyota and other such economy car makers into the American markets. Gas guzzling vehicles didn't make it back into the mainstream until the mid and late 90's with the advent of SUV's. A time that also coincided with lower oil prices.

At any rate, I think it's all coming around the mountain. The more the OPEC cartel tries to drive prices upward, the more they open themselves up to their own unravelling. In all markets, when rising prices stifle demand, a low cost provider comes in and snatches up the marketshare (and profits) of it's competitors. This instantly deflates pricing as the other providers scramble to stay afloat. I say, why can't this happen in the oil market?

Think about the OPEC countries - Iran, Venezuela, Iraq, etc. They're all in the shitter; infrastructurally speaking. This is where it gets hypothetical. What if an American company goes to a friendly oil producing nation (Iraq?) and says - We'll bring in billions of dollars of 21st century oil production and refinement technology for a discount on the final product. Iraq, who could definitely use the technology, the jobs, and the income; thinks maybe it's time to start making some capitalist decisions. OPEC's span of control loosens up a bit, and other oil producing nations begin saying 'Hey, we can do the same joint venture and offer a slightly steeper discount.' And the invisble hand is in motion.

It's a rough out, but I don't see what keeps a sovreign nation in a modern free-market society from telling OPEC to stick it where the sun don't shine, especially if it means the nation can produce as much oil as it wants at whatever price it wants.

UPDATE: Check it out, Weintraub agrees. Sort of. And for totally different reasons: Time to Dump Big Oil.