Hi Jurek,

Thank you for taking the time to reply to my post.

The Testimony on Peak Oil was made before the house sub committee of Energy and Air Quality in December of 2005. So, it is slightly dated.

On the first page in the summary it says: "Studies of the correlation between oil consumption and the growth of GDP in individual countries as well as for the world shows that since 1900 there has not been an increase in the GDP without an increase in the use of oil."

On page 2 and 3 it says, "During the last 5 years, the annual GDP growth in China has been 8.2% and the average increase in oil consumption 8.4% per year. We can now see the same correlation between increase in GDP and use of oil in China as in Sweden 50 years ago. If China's economy grows 8% per year over the coming 5 years, we can expect that it will need an increase in the consumption of oil of 3 million barrels per day by 2010."

Leaving the Testimony on Peak Oil, it is reasonable to assume that China desires to continue to increase it's GDP. However, it would be reasonable to assume that China understands that it would be nearly impossible to continue to consume oil at a rate approximating the rate of increase of its GDP. Within years, that oil will just not be there. So China has been taking steps with regard to its development of nuclear and coal to replace the traditional use of oil with sources that will allow it to continue its increase in GDP.

So, I am agreeing with you that China is moving in a different direction at this time from what other countries did with regard to oil. However, the jury is still out as to whether or not China will be able to replace oil.

Now, I know that we have listened to various people make various statements over the last 5 years with regard to who's got the oil and who hasn't and in what quantities, etc. But I think it's only reasonable to take a wait and see approach, particularly since we are going through a ridiculous financial down turn which is going to skew anyone's present view of where we are today and what we may need tomorrow.

So, I will agree that given the assumptions and considerations that you have stated, China's route to the development of an increased GDP may be somewhat different than predicted by the Testimony on Peak Oil.

However, I do think we are going to move through this criminally caused down-turn somewhat quicker than is being predicted by all the experts. So, it won't be long (3 to 5 years) before we'll have a chance to measure the increase in oil that is used relative to the increase in GDP in not only China but other countries as well.

I really don't have any insider information with regard to what is going on in China. However, I do think that they are galloping along at a rate that has been quite commendable for a number of years and even in this down-turn, their GDP is still increasing by a rate much larger than any other country that I am aware of.

For years, I have felt that our free society is also a weakness. I think that business examples would indicate that we still have corruption that we are unaware of. Over this past year, that mis-use of the financial system has caused the world economies to be on the brink of disaster. So these are unusual times.

Again, thank you very much for taking the time to send a message and I want to let you know that I value your estimations much more than I do analyst's. So you are as good as it gets in being able to do due dilligence on oil and gas companies.

Just as a last comment, totally unrelated. I'm going to make a guess at the Province that you live in. And then I'm going to guess what general area that you live in. You don't have to reply if you do not wish to. So, Jurek, you live in British Columbia and if you don't live in the Kelowna area, you live on the Lower Mainland. How did I do?

Talk to you before too long.

Best Wishes,

Lynn