Topic: Energy
Oil Barons Raise Price.... Again. Commentary on Tuesday's historic oil price of $100 a barrel and a look at the validity of peak-oil.by jposty
(libertarian)
Wednesday, February 20, 2008
For the first time in the history of the oil business crude oil settled at over $100 a barrel Tuesday at closing. Price per barrel raised $4.51 for the coming month of March. There are several factors for this: Exxon and Hugo Chavez's dispute over assets, the falling dollar, an oil refinery fire in Texas and OPEC's expected production cuts. Do those factors really warrant an almost $5 increase per barrel? Most of the price jump is speculation on the future of the oil business. The OPEC nations must come to terms that America and other Western European nations have made great strides in gaining energy independence and the usage of 'greener' energy sources.
The most significant cause for the ever increasing oil price is the 'peak oil' theory. The 'peak oil' theory states that at some undefinable point (some analysts say it has come and gone during Q4 of 2007) that the world's oil production output, like any nonrenewable resource, will eventually reach an all-time high and afterward gradually decline. This however, is not a new theory, in the 70's it was predicted that the U.S. would reach its peak. Most analysts will agree that this was true but disagree on the cause. The U.S. hasn't allowed any new refineries since the 70's nor have they allowed any drilling in our largest oil fields located in Alaska.
With new oil fields being discovered at an exponential rate it is hard to see a peak in the near future. Russian scientists have discovered enormous fields in the arctic which it plans to start drilling in the near future.
Why then is the price stil going up and the peak-oil theory still in circulation? International coproate greed doesn't help, the great robber-barons of our age have positioned their lobbyists in every major government the world over. The U.S. Department of Energy, has asked the The National Petroleum Council, an oil and gas research group to hire the oil industry's own Lee Raymond, the former chairman and chief executive officer of Exxon and the famous recipient of a $400 million plus retirement package, to investigate claims of peak oil and production cuts.
The other two prominent reasons for oil's out-of-control increases is the U.S.' declining dollar. The base price of the dollar has fallen drastically compared to the Euro. OPEC has even discussed abandoning the dollar in favor of more 'viable currencies'. The dollars' decline should squarely be placed on our elected officials: from both sides of the Isle. Rampant government spending, a trillion dollar war in the middles east, government waste and corruption, the inability to balance a budget, the use and practice of earmarks and the ease and access congress has to printing money backed by nothing but an assumed debt against our GDP. Until congress gets its books in order the dollar will continue on its downward trend. The other reason for the oil scare is the environmental concerns. Oil companies are gorwing increasingly nervous that one day in the near future a new technology or process could drastically reduce the world's reliance on fossil fuels. The U.S. specifically, needs to deregulate its domestic oil policies, depend on more nuclear and natural sources for energy (dams, windmills, solar power, et al) and get its dollar in order. Once those steps are taken with at least a half-hearted movement it will greatly decrease the effect of high oil prices on the American populace.
The views expressed in this
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Whatever about the date of peak production of oil (regular conventional oil peaked in production mid 2005) get this into your head: it is not a theory. It can never be a theory.
Do some maths, dude.
10 G-barrels = 10,000,000,000
84 M-barrels per day = 84,000,000
Thus the 10Gb equates to 119 days. Yes that's really going to buck the trend, NOT!
Also, your statement "new oil fields being discovered at an exponential rate" is either incorrect or misleading. Global discovery peaked in the 1960s; anything found recently is nothing compared to what was found before 1980 (check out the ASPO discovery/production graphs).
In addition, the amount of reserves is of secondary importance. The primary importance is how quickly the stuff can be extracted from the ground. Even if a trillion barrels were found in the Arctic (an extremely unlikely scenario) there would be technical difficulties that would restrict the daily production rate. Similar considerations apply to shale and tar sands.
In other words, it's not reserves that matter. It's FLOW. And FLOW directly affects the supply and demand balance. Which affects the price.
It's not "Peak Oil Theory" that's "upsetting the market". It's "Peak Oil Actuality" that's taken away the spare capacity that kept the price stable for so long.
I respectfully have to disagree with you both. Oil is no different in terms of accesibility than diamonds. The reason this semi-precious gem is worth so much is because the diamond barons lie about actual numbers and when they aren't busy lying about purity, accesibility and quantity they are stifling the flow to the market to artificially create a supply run.
Peak-oil theory... peak-oil actuality... in the end it makes no difference. For America to have sound foreign and domestic policy we need to become energy independent. Whether that is finally allowing oil to be drilled in Alaska or off the coast of Florida, or whether it is finally lifting the social moritorium on nuclear power plants, or whether we create a new source of energy or even whether we revert back to mother nature anduse knewly discovered methods for harnessing natural energy... it doesn't matter, some if not all of those issues must be addressed.
Your opinions are Republican nonsense, based on nothing but wishful thinking. It may take a few years, but the peaking of oil is coming, if it hasn't already come. And there is no magical
You don't have a clue of what you are talking about, dude...
Oil discoveries are not growing exponentially anymore. They have not been doing so since long. And this is a FACT, sorry: I don't like it either... but facing facts is better than denial, I think. I just comment on your superduper 10Bn barrels field, which happens to be named Noxal. Here is what Wiki says about it:
-- Noxal is a deep underwater oil field in the Mexican waters of the Gulf of Mexico that was once believed to contain up to 10 billion barrels of crude oil. However, further drilling has revealed only 245 bcf of natural gas and no real oil reserves. The field lies 4,000 m below the sea bottom, which is itself 930 m below sea surface, about 100 km off the coast of Veracruz state. --
So, this looks pretty much like a DRY HOLE! Now... it took me 60 second to check this wrong info you are giving us. Shall we include also Wiki and links in the conspiracy? Com'on!! Anyway, I suggest you checking stuff before writing...
Where on earth do you get your information from? "With new oil fields being discovered at an exponential rate..."- could you cite your source for this please? Even the latest BP Statistical Review of World Energy states that: "It's no secret anymore that for every nine barrels of oil we consume, we are only discovering one." Your propagation of misinformation is not doing anything to help people make rational decisions about preparing for some pretty considerable challenges we'll be facing in coming years.
Posted By: Matthew Coyle
Date: 2008-02-21 16:28:05
It's fools like you that will make the post-oil transition difficult and confusing for the average American. We have grown the world population 600% in 100 years, all due to exploiting more and more oil for transportation and agriculture. Are you telling me in the next 100 years this "exponential discovery in oil production" we'll be extracitng more then 3,000 barrels of oil a second and feeding 15 billion people with it. Not to mention there are a multitude of declining oil fields of which we must not only replace these shortfalls but add additional production for demand growth. Dont even let me get into China & India's new hunger for oil.
Some of the Gulf of Mexico lower tertiary trend oil reservoirs were about 30,000 feet below sea level. This is deeper than any other major oil field. There were numerous problems in working that deep that will inhibit development. That oil will take years and perhaps decades to develop, in the mean time the Chinese economy grew about 10 percent or more per year and they required more oil every year. The world used little more than 31 billion barrels per year at recent extraction rates. The supergiant fields in the Arctic may or may not exist. They have not been proven by drilling. It is not the oil barons keeping people out of the ANWR oilfield in Alaska, it was the environmentalists. Oil companies would like to develop the area for it might bring them great profits. OPEC was a group of barons limiting production. There is some evidence they might not be able continue current supply levels for very long. The UAE and Kuwait might be heading for declining production within a decade if some reports published are to be taken seriously. Saudi Arabia indicated they will reach peak production capacity in 2009. The U.S. used half a percent more gasoline this year than last, yet domestic oil production fell. The U.S. once exported oil. Currently it imported more than half of its oil needs. Oil is expensive due to more interest in using oil by the many nations of the world. The value of the dollar was falling due to increased government spending coupled with decreased taxation (budget deficits); this also contributed to the rising costs of food, energy, education, healthcare, etc. This was the government baron's work.
Posted By: Andre Angelantoni
Date: 2008-02-22 01:29:28
Such astonishing lack of research before writing...as was pointed out many times, you are likely the only person on the planet who would characterize the latest oil finds as "increasing" at an exponential rate. Most people see a declining curve and would use the more generally accepted term "decreasing."
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With new oil fields being discovered at an exponential rate it is hard to see a peak in the near future. Russian scientists have discovered enormous fields in the arctic which it plans to start drilling in the near future.