Hypocracy [Archive]

Gawain of Orkeny

08-26-2005, 02:00

Both sides are guilty of it in fact we all are. Give me a good example of what you consider hypocracy by either or both sides.

Ill start with the price of gas. The left is screaming that the price of gas is going up and its the rights fault. Who is it who blocks the building of new refineries? Who is it that blocks drilling off shore? Who is it who blocks drilling in Alaska? Who is whos against building new nuclear power plants? And who has said that higher prices are to be sought even if it takes increased taxes to make it so? Well the answer to all of these is the left of course and as t the last Al Gore in particular. He wanted higher oil prices so that we would invest more in alternative fuels.
He sang a different tune in the election campain.

Gore: "I hope the prices come down quickly, and I'm going to make sure they do."

Bush: "I would work with our friends in OPEC to convince them to open up the spigot and increase the supply."

Gore on his Bush: "My opponent comes out of the oil industry. His experience is as an oil company executive. He called for higher oil prices to boost the oil companies' profits."

Bush on his Gore: "It seems Mr. Gore is running from his own position. On the one hand, he calls for higher gas prices, but now suddenly when the heat is on and prices go up, he folds."

What does the left want higher prices so that we convert to another fuel or lower prices. As long as prices are low there will not be any rush for alternative fuels. So whats your answer? Arent the high prices a good thing in reality? Isnt that what you really want?

Steppe Merc

08-26-2005, 02:06

Well they would be good except for a few things.
A. I doubt any poltician is willing to seriously invest in alternative energy. We are quite far behind Europe in that regard. It is not hard to cover city buildings with solar panels, or create wind turbines. But it isn't being done.
B. Why the hell does it have to go up when I start to drive, damn it? ~;)
C. Whether or not it will lead to alternative energies, the oil companies are probably reaping the benifits.

Crazed Rabbit

08-26-2005, 02:16

A) Wind turbines kill birds. Lots of birds. They slice through birds like a,...well, like a giant metal blade spinning quickly through the air. And it's expensive. Solar is very dependent on the sun, and more expensive than naural gas/oil.

B) So you see the wisdom of opening Alaska to oil drilling.

C) Yes, oil companies are making huge, huge profits. ~D

Crazed Rabbit

Steppe Merc

08-26-2005, 02:24

A. Yeah, and we've got a lot of sun, don't we? Big deal if it's expensive. It's easier than trying to rush and convert after we've run out of oil. My uncle had a house that was run primarily by solar power. Of course there was back up for the cloudy days.
About the turbines, I was not aware that birds are so attracted to them. Something needs to be done about that...
B. No, opening Alaska to drilling is wrong, and well... not nice. I'd rather shell out more money than condone the destruction of Alaskan wildlife.
C. Hah! I knew it. ~;)

Oh, and also, we can also run on organics. My cousin rigged his deisel pick up to run on McDonalds and Chinese food grease. Not sure how the government can promote that though. ~;)

For anyone intersted in alternative oil, I'd suggest a National Geographics a few issues back that had a very good articale listing the pros and cons of many different types.

Crazed Rabbit

08-26-2005, 02:29

Papewaio

08-26-2005, 02:30

Stop eating HFCS and use it to make ethanol.

bmolsson

08-26-2005, 02:53

I think we have to get used to higher oil prices. It's wrong to blame high oil prices on any US president or president candidate. The Iraqi war might have speed up the price hike a bit, but today the consumption increase faster than the supply, so we just have to start working on alternatives...

Red Harvest

08-26-2005, 04:26

A) Wind turbines kill birds. Lots of birds. They slice through birds like a,...well, like a giant metal blade spinning quickly through the air. And it's expensive. Solar is very dependent on the sun, and more expensive than naural gas/oil.

Not that many actually, 1 to 2 per year per turbine is the U.S. estimate (and often less than that.)

Windows kill birds yet we haven't decided to take out all the windows or stop building structures with windows. Estimates for all building including houses range from 100 million to 1 billion birds/year.

The rate for a large turbine is about 2 birds per year. I hit about 1 per year driving (antennae clip them in the early evening typically.) Vehicles take out 60 to 80 million/yr.

Electrical transmissions lines take out ~130 to 174 million birds per year.

Wind Power Bird Kills in Perspective (http://www.awea.org/faq/sagrillo/swbirds.html)

Lots of other things like communication towers, pets, agriculture, etc.

B) So you see the wisdom of opening Alaska to oil drilling.

Nope, it's a snake oil solution to fool those who haven't looked through the numbers. It is very much like Bush's pledge in 2000/2001 to drill our way out of needing to do energy conservation. Some policy that was. Here we are threatening $70/bbl...falling behind even faster than before. The amount of ANWR production at its peak won't be able to keep up with our *increase* in consumption. It will be hard put to even keep up with the decline in production from existing fields. That is if you look at the current govt. estimates of what the field can produce.

I propose that the wise thing to do is to get everyone else to pump out all their oil first...makes ours much more valuable. I would rather make 10x as much 10 years later, rather than make 1x today. :greedy: Strategic thinking doesn't get me very far in today's society though. :thinking:

Red Harvest

08-26-2005, 04:37

A) Converting to large scale solar power would necessarily raise energy prices- hurting the poor, who can't afford it, most. And it would be better to wait until there is actually demand for new power- companies will invest more R&D in it and make better technologies.

Wrong. It's actually affordable at today's prices. There are affordable housing units using solar power to *reduce* costs. The economic hurdle is in the initial investment, which is why govt incentives are needed to drive change. It is capital intensive (and risky if you think energry prices will fall.) Operational costs are quite low...you don't have to buy any fuel...just replace dying gear. If anything, the poor could benefit most.

You can get shingles now that are solar panels. The initial installation cost is high. The truth is, we could do a lot to reduce our CO2 emissions by making these sort of things affordable. When you cut electrical load, you back out natural gas and steam (but not oil for the most part.) Coal is hell on CO2 emissions.

C) My dad's in the oil business.

The oil companies were projecting about $27 to 28/bbl this time a few years ago--I know because I was looking at their numbers, shaking my head. I didn't believe them then, and I'm sure as heck not stupid enough to believe them now.

Red Harvest

08-26-2005, 05:02

Bith sides are guilty of it in fact we all are. Give me a good examole of what you consider hypocracy by either or both sides.

Ill start with the price of gas. The left is screaming that the price of gas is going up and its the rights fault. Who is it who blocks the building of new refineries? Who is it that blocks drilling off shore? Who is it who blocks drilling in Alaska? Who is whos against building new nuclear power plants? And who has said that higher prices are to be sought even if it takes increased taxes to make it so? Well the answer to all of these is the left of course and as t the last Al Gore in particular. He wanted higher oil prices so that we would invest more in alternative fuels.
He sang a different tune in the election campain.

What does the left want higher prices so that we convert to another fuel or lower prices. As long as prices are low there will not be any rush for alternative fuels. So whats your answer? Arent the high prices a good thing in reality? Isnt that what you really want?

The nation as a whole has nobody to blame but themselves. I've been bothered about the U.S. obsession with cheap energy for years. We've been sitting here living off the reserves, without planning properly for when those reserves start to deplete. It was nice and comfortable, but like all parties, we knew it couldn't last forever. There are greenies who resist wind and solar, LOL. Nuke isn't really an option until we are willing to accept the disposal responsibilities--not to mention how freakin' expensive it is.

Blaming it on the left won't work. They've been far closer to being accurate on this than the right. They don't think "conservation" is a dirty word for starters. Howver, both sides do pander to the gasoline price watchers, consumers without the first clue as to what is going on.

The best thing for us right now is a good old fashioned scare, we've been complacent and 90% of the public doesn't have the first clue as to where our electricity, nat. gas, oil, and gasoline come from. Shock people into realizing wishful thinking isn't going to get us to where we need to be. ANWR is literally a drop in the bucket. The problem is scaring voters only works if they believe you, and our voters have been deluded for too long.

It isn't a big problem yet. We've had our warning, the first true demand based global oil run up (rather than supply restriction.) Now are we going to roll up our sleaves and get ready for where we need to be in 10 or 20 years? Or are we going to continue to deny the problem until it really has us by the short and curlies? I think we'll deny it, unless some charismatic leader comes along and grabs public attention. Perot did it with budget deficits...and it worked until Dubya took office.

What do we need? MAJOR incentives to invest in alternate energy and conservation. Major research programs to provide the tech and LONGTERM solutions. We should lead, not follow. How do you fund it? Non-renewable energy taxes. That funds the work and investment from the very source of the problem. You also drive conservation that way. Is it going to be disruptive in the short term for some? You bet.

Xiahou

08-26-2005, 05:32

What do we need? MAJOR incentives to invest in alternate energy and conservation. Major research programs to provide the tech and LONGTERM solutions. We should lead, not follow. How do you fund it? Non-renewable energy taxes. That funds the work and investment from the very source of the problem. You also drive conservation that way. Is it going to be disruptive in the short term for some? You bet.
That's your typical tax and spend liberalism for you. Got a problem? The government can solve it by raising your taxes!

Anyhow, you're proposing to solve high energy prices by adding taxes to the prices? Interesting. Too bad gasoline is already heavily taxed- what, about 30 cents a gallon? (varies by state, ect) It's not like we're going to wake up one morning and suddenly be out of oil. As supply shrinks and demand grows the prices will continue to rise until people become less and less willing to pay them. Instead, they start looking to buy alternatives. It's not that there aren't viable alternatives out there, it's just that they still aren't cost effective and prices for gasoline, ect aren't high enough to make people switch. When that happens, it'll be in the industry's best interests to cater to the consumer- there's no reason to fund it with even more corporate welfare.

Were it up to me, I'd cut the federal tax on gasoline by 50% or more. It was setup to fund the Interstate highway system, which is complete. Currently the gas tax is just a slush fund for politicians to use to bring home pork to buy votes with.

Red Harvest

08-26-2005, 06:00

That's your typical tax and spend liberalism for you. Got a problem? The government can solve it by raising your taxes!

Anyhow, you're proposing to solve high energy prices by adding taxes to the prices? Interesting. Too bad gasoline is already heavily taxed- what, about 30 cents a gallon? (varies by state, ect) It's not like we're going to wake up one morning and suddenly be out of oil. As supply shrinks and demand grows the prices will continue to rise until people become less and less willing to pay them. Instead, they start looking to buy alternatives. It's not that there aren't viable alternatives out there, it's just that they still aren't cost effective and prices for gasoline, ect aren't high enough to make people switch. When that happens, it'll be in the industry's best interests to cater to the consumer- there's no reason to fund it with even more corporate welfare.

Aaahhhh, predictable, but I'm not a tax and spend liberal. I do believe in Manhattan projects and Apollo projects though. Those are the sort of things that have put us where we are...as opposed to stick your head in the sand isolationists.

We've been using your policy for a long time. You can choose to follow the world if you like. I would prefer to lead. What you propose is to wait for prices to really hammer the economy and become unbearable, then react. It is one approach, but it means you will be getting your tech from somebody else, not from the U.S. It makes your own economy weaker than your competitors, because your *investments* over the past decades will have been misplaced. I would rather pay $1 today to save $2 tomorrow, but that's just me.

30 cents a gallon...whoooooopppeeeeeee. Now if fuel efficiency were improved by 10% not only would that 30 cents per gallon be covered...but the PRICE itself would be lower (look up the elasticity of energy and gasoline demand.)

Were it up to me, I'd cut the federal tax on gasoline by 50% or more. It was setup to fund the Interstate highway system, which is complete. Currently the gas tax is just a slush fund for politicians to use to bring home pork to buy votes with.

LOL, ever been to Houston? Complete??? Take a drive down I-10 some time...any time. You have to maintain the system, and it is continuously expanded as population continues to grow. Much of the highway system in the U.S. is seriously underfunded with regards to maintenance and improvements.

Saving 15 cents per gallon...ooooooooohhhhh...that would help...not at all? It would actually drive higher prices long term.

ichi

08-26-2005, 06:05

I think that the biggest hypocrasy occurring in this country today is this idea that we need to give the government incredible powers in order to keep our freedoms.

Second is the idea that we must support the current administration in order to patriotic.

ichi :bow:

ps regarding fuel: in order to protect American independence shouldn't we keep our oil and use up the oil of all the other countries? Save ours for last?

Red Harvest

08-26-2005, 06:32

ps regarding fuel: in order to protect American independence shouldn't we keep our oil and use up the oil of all the other countries? Save ours for last?

Yep, that's what I've been saying. I believe we can drill in the ANWR safely enough...but I would rather other countries pumped their oil first so that we still have reserves when others have depleted reservoirs. I don't object to ANWR drilling on environmental grounds, but on economic reasoning. And more importantly because it is used to mask the real problem.

Stupid me, I've always been a saver/investor rather than a spender. Must be the Scot in me. I'm not doing my part to support the short term, "live-beyond-your-means," consumption driven economic model. :shame:

Al Khalifah

08-26-2005, 09:59

We should lead, not follow. How do you fund it? Non-renewable energy taxes. That funds the work and investment from the very source of the problem.
Sorry Red, we already have massive taxes on petrol in the UK and they aren't helping to solve the problem at all. The Government just squanders the money on inefficient schemes for public transport.

Raising the price of petrol does not stop people using their cars, it just decreases their disposable income to spend on other things and rather unfairly hits the poor and rural populations - rather than the urban population.

Ironside

08-26-2005, 12:38

Devastatin Dave

08-26-2005, 13:38

I've got a friend that will happily gut a deer, but won't shange a stinky diaper. ~D

Aenlic

08-26-2005, 15:04

A)B) So you see the wisdom of opening Alaska to oil drilling.

There is just about enough oil under the Anwar to supply this country's gluttonous oil comsumption needs for... wait for it... 6 months. That's it. That's the whole shebang.

The problem isn't oil production. It's oil consumption. The U.S. is one of the world's leading producers of petrochemicals - already! We're the third largest oil producer behind Saudi Arabia and Russia. But, because we have all of the self-control of a 4 year old in a toy store, we are also the world's largest consumer of petrochemical products. We consume more than 3 times more oil than the next largest countries, China and Japan. We consume more than twice what we produce; but if we cut our consumption down to just what the next largest consumer country uses each year, then our production capacity would allow us export about as much oil as Venezuela and make us somewhere around the 6th or 7th leading exporter of oil, fixing our trade deficit and a lot of other things. So our production can't meet our needs and we have to import massive amounts of oil from other countries. But we won't fix that problem. Because we just have to have our toys, like that 4 year old who wants it all. ~D

So keep on driving that gas-guzzling SUV, it's doing wonders for our economy and our international relations. Think about the fact that more half of the gas you use comes from overseas suppliers. And consider that a significant portion of that amount from overseas comes from Saudi Arabia. And that a significant amount of the profit from the purchase from Saudi Arabia goes into the hands of members of the royal family who then send a portion of that to the families of Palestinian suicide bombers. What could possibly be more stupid?

If we fix our consumption, we'd turn our economy from a debtor nation in trade to an exporter nation with a trade surplus. Duh uh. But I'll bet we don't do it. We'd rather get that gleam in our eyes and say "gimme! gimme! I want!"

Gawain of Orkeny

08-26-2005, 15:45

Blaming it on the left won't work. They've been far closer to being accurate on this than the right.

Baloney. Are you telling me groups like Greenpeace and the Seirra club are rightwing organizations? Is it the right who opposes more drilling. Is it they who oppose building new refineries and nuclear plants.Lets have a little intellectual honesty here shall we.

They don't think "conservation" is a dirty word for starters.

No thats all they can think of instead of increasing supply.

We've been using your policy for a long time.

Man speaking of hypocracy. Hows that? You mean weve been using your policy for a longtime. It has led to the higher prices and thats the point. Come gentlemen at least admit its hypocrital of the left to complain that Bush has caused oil prices to rise when one, they want higher prices and two they are the cause of it and three they continue to limit supply through legislation.

At least Ichi got the point of this thread. I didnt want t to be a debate about oil but about hypocracy. The right is no better off on this matter. The republicans claim to be for smaller government and fisical responsiblity yet Bush has been spending money like a drunken sailor and the government just keeps getting bigger and more intrusive. This is what Im talking about. I want your examples of hypocracy not a long dragged out debate over oil. Weve done that countless times before. :bow:

Steppe Merc

08-26-2005, 17:10

Thank you Red Harvest for your assistance. :bow:

Oh, natraul grease was free for my cousin. The food places just gave it too him. Of course, if more people use it, they might start charging for it. But somehow, I doubt too many people will jump on the band wagon.

Gawain, you are probably right, it is a bit unfair to blame soley Bush. But can I blame the people who refuse to go to logical alternative energies for not converting? ~;)

Ok, let me think of a hypocracy... Oh, ok. I don't want to start a whole big argument, but I don't understand how a place can claim to have a culture of life for just preventing abortions while executing criminals and being in wars.

Gawain of Orkeny

08-26-2005, 17:13

Ok, let me think of a hypocracy... Oh, ok. I don't want to start a whole big argument, but I don't understand how a place can claim to have a culture of life for just preventing abortions while executing criminals and being in wars.

Well we now have a culture of death. I oppose both as should anyone whos not a hypocrite ~D IM also against war. But thats beyond my control.

Crazed Rabbit

08-26-2005, 17:15

I have this farcical notion that killing a baby in cold blood is not similar to executing a criminal after a trial.

Crazed Rbbit

Steppe Merc

08-26-2005, 17:24

But it's still life. You are either a culture of life, protetecting all life, or you aren't.
And I do think there is a difference. I really don't see an abortion while done during the first trimester as a human. I don't think life begins at conception. I'm not saying that abortions are good, and I do think more should be done to prevent as many abortions as possible as well as changing the current laws, but the option has to be open.

Red Harvest

08-26-2005, 17:44

Sorry Red, we already have massive taxes on petrol in the UK and they aren't helping to solve the problem at all. The Government just squanders the money on inefficient schemes for public transport.

Raising the price of petrol does not stop people using their cars, it just decreases their disposable income to spend on other things and rather unfairly hits the poor and rural populations - rather than the urban population.

It doesn't work if you just shift money around in general funds. I don't propose that at all. Any tax like this should be used to directly fund the sort of development incentives that we want. Right now, we don't have a substantial coordinated effort going on. If we want one, we have to fund it. This is about priming the capitalistic pump, not creating a socialist system. Capitalism works, but it needs some incentive/direction at times. You give it a carrot, it will chase it.

As for raising the price of gas...it actually does have clear long term effects. The short term cannot be changed very much--and the short term here is at least 3 to 5 years. Look at the effect of higher gas prices by taking a look at the typical U.S. auto (a huge, heavy SUV) and the average foreign auto. Low fuel costs in the U.S. have led to declining fuel efficiency. The actual fleet (per car on the road) averages are at 1973 levels last I checked. Why? The weight of the average U.S. vehicle is more now than it was in 1973. The shift has been to SUV's/light trucks that are actually heavier than the 1973 beasts. It takes time to move the average fleet statistics, and we've been moving the wrong way.

Red Harvest

08-26-2005, 18:09

Baloney. Are you telling me groups like Greenpeace and the Seirra club are rightwing organizations? Is it the right who opposes more drilling. Is it they who oppose building new refineries and nuclear plants.Lets have a little intellectual honesty here shall we.

Ok, I'll give you some brutal honesty. :whip: This seems to have gone so far over your head that it is comical. You still don't get it. Refineries aren't the issue (We can and do add capacity as we need it. The lack of a big gap between refined products and oil refutes the refinery bottleneck theory.) Opposing drilling isn't it either, drilling our way out doesn't stand up to scrutiny. You are busy chasing wild geese rather than looking at the problem with intellectual honesty. The easy to extract (and refine) oil is being depleted faster than it can be replaced, meanwhile global demand has accelerated.

Man speaking of hypocracy. Hows that? You mean weve been using your policy for a longtime. It has led to the higher prices and thats the point. Come gentlemen at least admit its hypocrital of the left to complain that Bush has caused oil prices to rise when one, they want higher prices and two they are the cause of it and three they continue to limit supply through legislation.

Considering the Republicans have had control for several years and have set the "energy policy" without input from the other side who they clearly snubbed, we'll just label this theory: MYTH BUSTED. Myopia, that's the problem. Consumers of all political affiliations think they gave some Constitutional guarrantee of cheap gas, somewhere in the Bill or Rights perhaps. Short sighted thinking has been the norm and political leadership plays to that. Those presently in charge are doing a great deal to illustrate the evils of short term thinking. Look at oil, look at Iraq, look at the national debt, look at the trade deficit, look at health care costs.

By the way, it is spelled "hypocrisy."

Xiahou

08-27-2005, 00:41

Ok, I'll give you some brutal honesty. :whip: This seems to have gone so far over your head that it is comical. You still don't get it. Refineries aren't the issue (We can and do add capacity as we need it. The lack of a big gap between refined products and oil refutes the refinery bottleneck theory.) Opposing drilling isn't it either, drilling our way out doesn't stand up to scrutiny. You are busy chasing wild geese rather than looking at the problem with intellectual honesty. The easy to extract (and refine) oil is being depleted faster than it can be replaced, meanwhile global demand has accelerated.Hey professor (or should I say Chicken Little?), maybe you need the lesson, not Gawain - I'll provide some for you.

from MSNBC (http://www.msnbc.msn.com/id/5612507/)
Traders are concerned about any potential disruption, however small it may be, because of slim unused refinery capacity. Last year’s Hurricane Ivan damaged Gulf facilities and forced a severe dip in output for several months.

Analysts say this fear is likely to linger and lend support to prices, which are at least 50 percent higher than a year ago. On an inflation-adjusted basis, oil prices would need to hit about $90 a barrel to match the highs of 25 years ago.Oil prices are effected by refinery capacity and your evidence about oil inventory vs gasoline is total nonsense because when there is a refining bottleneck, business will not keep blindly buying and stockpiling oil that they can't use- particularly when it's at near record prices. But then, I guess Im not a wizened economist like yourself....

Here (http://economics.about.com/cs/macroeconomics/a/run_out_of_oil_2.htm) is an article by economist Mike Moffat that addresses your tired 'sky is falling' approach to oil markets.

Red Harvest

08-27-2005, 05:16

Hey professor (or should I say Chicken Little?), maybe you need the lesson, not Gawain - I'll provide some for you.

There was nothing in either link of note, they were both facile. The MSNBC link was a short term price retreat. SOOOO??? Are you saying this is some sort of indication that oil is overpriced by t $30/bbl or what? It has zero relevance. Instead, it provides a perfect example of your myopic horizon for oil. It retreated from an all time high, and that is some sort of proof? LOL.

The quote you made...care to explain how oil price doubled and refined products too, if refining is the real culprit? You can't, it defies basic economic principles. If refining was the real limit in the U.S. then U.S. gas would skyrocket, but global oil prices would not. Econ 101. You are looking at a small segment of the market, and making an erroneous projection. The seasonal run up is normal, I've been watching it for years, but not off a base line that is more than DOUBLE what it was 1 or 2 years ago.

If you want to learn something, go look at global crude supply projections. They show current "excess capacity" as about 1% of the total usage (and prices indication that this projection is optimistic.) Refining is at ~95% of capacity typically. Do the math... Refining excess is about 5 times that of production.

Your link to Moffat is particularly amusing as he fails to discuss the inelasticity of energy demand. He should get his money back on that Econ 101 course as he can't seem to apply it in the real world. In the real world to cut back energy demand by a few percent prices shoot through the roof on the short term scale.

Xiahou

08-27-2005, 05:35

The quote you made...care to explain how oil price doubled and refined products too, if refining is the real culprit? You can't, it defies basic economic principles. If refining was the real limit in the U.S. then U.S. gas would skyrocket, but global oil prices would not. Econ 101. You are looking at a small segment of the market, and making an erroneous projection. The seasonal run up is normal, I've been watching it for years, but not off a base line that is more than DOUBLE what it was 1 or 2 years ago.Again, I think you're the one 'in over your head' and these statements prove it. Save your condescension. ~:handball:

Gawain of Orkeny

08-27-2005, 05:49

Soaring oil prices have revived the old bogeyman that the world is running out of oil. Economics is a great field for nostalgia buffs because the same old fallacies keep coming back, like golden oldies in music.

Back in 1960, a best-selling book titled "The Waste Makers" by Vance Packard showed that the known reserves of petroleum in the United States were only enough to last another 13 years at the current rate of usage. Yet, 13 years later, the United States had larger known reserves of petroleum than in 1960.

This has been a worldwide phenomenon. At the end of the 20th century, the known reserves of petroleum in the world were more than ten times what they were in the middle of the 20th century -- despite an ever-growing use of oil.

.

No matter how many centuries' supply of oil there is on the planet, the high cost of oil exploration ensures that only the most minute fraction of that oil will be known at any given time. Thus there have long been recurring false predictions that we were running out of petroleum, as well as other natural resources.

The high cost of extracting and processing oil ensures that not even half of the oil in a known pool of oil will be brought to the surface and sent off to the refineries.

A generation ago, only about a quarter of the oil in a pool was likely to be brought to the surface. That is because the cost of extracting and processing oil from a given pool tends to increase as you drain from deeper into that pool.

Even at $60 a barrel, most of the oil that is known to exist is too costly to extract. How much will be extracted depends on how much higher the price of oil goes -- and how much new technology can recover more oil at lower costs.

What if the government did nothing about oil prices? Rising prices would lead people to reduce their use of oil and lead producers to drain some of the more costly oil out of the ground.
An oil 'crisis'?: part II (http://www.townhall.com/columnists/thomassowell/ts20050824.shtml)

Once more there is no shortage of oil. There is only a shortage of profitable oil and even thats debatable. The enviormentalist are whats behind the high cost of oil. The left should be celebrating higher oil prices not bashing Bush for it.

Red Harvest

08-27-2005, 06:12

Once more there is no shortage of oil. There is only a shortage of profitable oil and even thats debatable. The enviormentalist are whats behind the high cost of oil. The left should be celebrating higher oil prices not bashing Bush for it.

Why should anyone celebrate a policy based on remaining behind the curve? It is reactive government. Typical of Dubya's admin though. Blecchhhhhhhhhh!!!!!! I've seen the same in industry and by folks with the same political viewpoint: folks who can't tell the difference between being ahead or behind of the trends. When you are behind with a resource with inelastic demand curves you get spikes, and you experience tremendous lag. Even if oil can be produced to fill the growing demand (and it can) it means that less financially viable sources (higher production and exploration cost) need copious justification before they commit. That produces serious LAG my friend. LAG is a DRAG on the global economy. It means higher prices and slower economic growth. Do you want that? I don't.

"Shortage of profitable oil?" That means the price is too low to support current demand because we are using too much and the SUPPLY is not there to support it. In otherwords the price is going to keep going up because we can't meet demand at today's prices.

The article is referring to price controls, and rebutting the popular political concept of price controls as they are nonsensical. He is right about that.

The one thing that stands out when you compare this oil run up to others, is that it is demand driven, not supply driven. That is what has changed.

The environmentalists did not drive up demand. Nor did the left. Most of the supply is outside the U.S. so if you believe environmentalists have been the problem there, you must be on shrooms.

Gawain of Orkeny

08-27-2005, 06:55

Why should anyone celebrate a policy based on remaining behind the curve?

Because the are against the use of fossil fuels. They care more about the enviorment. They could care less what the price of oil is other than the higher the better.. Thats why I called this thread hypocracy.

Steppe Merc

08-27-2005, 16:12

Well yes, the environment is more important than oil prices.

Red Harvest

08-27-2005, 20:07

Because the are against the use of fossil fuels. They care more about the enviorment. They could care less what the price of oil is other than the higher the better.. Thats why I called this thread hypocracy.

I assumed you spelled it "hypocracy" as a play on words...as if it were a style of govt...theocracy, autocracy, democracy...and the current administration would be the "hyprocracy."

Your cutesy attempt to point the other way aside, the folks you gripe about wanting alternative energy development and conservation are being progressive, while the approach you embrace is regressive. Progress is trying to develop for the future need, rather than ignoring developing events. You want to invest more in early 20th century tech, while many of us see more potential in investing in later 20th century tech.

After all, it is amusing that you will say we need to be drilling like mad in one sentence, and then in another say this is a refining issue and there is no shortage of oil. Those are contradictory statements.

What is so awful about developing solar, wind, and other technology (including long range fusion work.) Seems a lot more intelligent to be investing in these than in a declining resource. What is so awful about improving energy efficiency? We trumpet productivity improvements as driving our economy, why can't other efficiencies also improve it?

Gawain of Orkeny

08-27-2005, 22:24

Your cutesy attempt to point the other way aside, the folks you gripe about wanting alternative energy development and conservation are being progressive

Well Im one of them.

while the approach you embrace is regressive

Oh so increasing supply is now considered regressive? ~:confused:

You want to invest more in early 20th century tech, while many of us see more potential in investing in later 20th century tech.

I want to use what works now and plan for the future.

After all, it is amusing that you will say we need to be drilling like mad in one sentence, and then in another say this is a refining issue and there is no shortage of oil. Those are contradictory statements.

Somday yhou will wake up and realise this is a balancing act. The reason they dont drill more is because they couldnt refine it anyway. We need to both drill and build new refineries,

What is so awful about developing solar, wind, and other technology (including long range fusion work.)

Nothing again Im all for it.

Seems a lot more intelligent to be investing in these than in a declining resource.

First off we have to live now. Secondly once more there is plenty of oil left. We havent even gotten half of it yet at best.

We trumpet productivity improvements as driving our economy, why can't other efficiencies also improve it?

They can but let the market drive it.

Do you think we suddenly started running out of oil around a year ago? Oil is a commodity and its pricwe is whatever they think they can get away wiith. Their predicting shortages in supply and thats why the prices are going up just like they did in the 70s when we were "running out of oil"

Aenlic

08-28-2005, 00:58

The current best estimate for total oil reserves world-wide, both discovered and as yet undiscovered, is about 1 trillion barrels.

Current consumption world-wide is about 25 billion barrels per year.

You do the math. That's 40 years of oil left at current consumption levels. But consumption is not steady. It's increasing. So, we have less than 40 years of oil left. But the shortages will start occurring much sooner than that as sources become harder to reach. That 1 trillion barrel estimate includes a rosy view of undiscovered sources. The last major oil reserve find was in the Caspian Sea off the coast of Kazakstan - 30 years ago. The idea that oil production will reach a peak in spite of still-existing reserves, because of a combination of increasing consumption and decreasing finds, is called the Hubbert Peak Oil Thesis.

What are we doing about it? What are we doing to prepare for something we've known about, in essence if not detail, for at least the last 20 years?

Not a damn thing. Not really.

Sources:

Petroleum Equities (http://www.petroleumequities.com/OilSupplyReport.htm)

Speech by Alan Greenspan to the FRB on this topic in 2004 (http://federalreserve.gov/boarddocs/speeches/2004/200410152/)

Gawain of Orkeny

08-28-2005, 01:13

The current best estimate for total oil reserves world-wide, both discovered and as yet undiscovered, is about 1 trillion barrels.

You do the math. That's 40 years of oil left at current consumption levels. But consumption is not steady. It's increasing. So, we have less than 40 years of oil left.

Hey look the sky is falling ~D

They have been saying that for how long now?

You dont even take into consideration shale oil. This is a their best quess it says. Well twenty years ago they were saying the samething. 20 years from now the same claims will still be being made. No matter what happens the market and free enterprise will handle it. There is no need for panic and extreme methods.

Aenlic

08-28-2005, 03:34

Xiahou

08-28-2005, 05:57

So, Alan Greenspan, the Wall Street Journal, British Petroleum, Shell, Exxon-Mobile, Chevron-Texaco, the UN, The American Petroleum Institute, the Energy Institute, The Colorado School of Mines (Hubbert Center for Petroleum Supply Studies), The Society of Petroleum Engineers and many, many more - all of whom accept the basics of the Hubbert Peak hypothesis - are all wrong and you, the revered and perfect and oh so highly acquianted with the subject Gawain are right. Got it. No thanks, I'll take my chances with the experts instead of someone who thinks a "the sky is falling" sneer is an appropriate response to a real problem. ~:)Did you actually read the article on the federal reserve site? Greenspan said nothing at all about the world running out of oil anytime soon. He actually makes a very level-headed assessment and supports what I've been saying. There are lots of reasons for high oil prices, none of which are that we're going to run out.

While there are concerns of seeming inadequate levels of investment to meet expected rising world demand for oil over coming decades, technology, given a more supportive environment, is likely to ensure the needed supplies, at least for a very long while.I especially like the "given a more supportive environment" bit. He's so understated. ~D

Aenlic

08-28-2005, 06:27

Did you actually read the article on the federal reserve site? Greenspan said nothing at all about the world running out of oil anytime soon. He actually makes a very level-headed assessment and supports what I've been saying. There are lots of reasons for high oil prices, none of which are that we're going to run out.

I especially like the "given a more supportive environment" bit. He's so understated. ~D

Apparently, you didn't read it.

During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced. Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil.

He notes, quite specifically, the exact figure used by the peak theorists. That we now have access to roughly 1/2 of the total amount of oil in the earth's crust. The total amount is estimated to be 2 trillion barrels, the accessible reserves at 1 trillion barrels. The other trillion which is considered inaccessible includes oil shale (a pipe dream, pardon the pun), heavy oil and the rest, such as the possibility of as yet untapped Siberian and East Siberian Sea reserves.

And, as Greenspan says, in a decade the proven net reserves increased by a whopping 100 billion barrels! Wow. Awestruck, I am. That's all of 4 years supply at current demand levels. Woohoo! Demand might as much as double in the next decade, if China's economy really gets cooking. You do the math.

Yep, given a more supportive environment, technology "may" be able to access the other trillion barrels that is currently inaccessible. What he fails to mention is that all that does is double the supply, increasing the run out date from 40 years to 80 years from now. ~D And that's only if some unmentioned and as yet undiscovered technology suddenly appears.

At the absolute rosiest of rose-tinted glasses optimistic, 80 years is it. And that's only if technology in the next 40 years somehow comes up with an as yet undreamd of way of getting to much of the rest of the oil. For it to be any longer demand has to go down. And that isn't going to happen as long as people keep putting their wishful thinking in pipes and smoking it.

I really recommend doing a little research into the issue of the peak oil hypothesis. Maybe it'll loosen up a few calcified brain cells.

Gawain of Orkeny

08-28-2005, 06:39

He notes, quite specifically, the exact figure used by the peak theorists. That we now have access to roughly 1/2 of the total amount of oil in the earth's crust

This cant be.

You see this is the little fact you keep ignoring. From your own qoute.

Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today

You see we cant even get at half of it now. If you had looked at it that way 20 years ago when we could only get a third we would be out of oil now. Its just a matter of it being profitable to go get. This is what were trying to tell you. Again we havent even tapped into the shale oil deposits yet. There is NO shortage of oil. By the time there truly is we will not need it. Have some faith in science other than those enviormentalist wacko ones. ~D

Aenlic

08-28-2005, 06:57

And what I keep trying to tell you is that even if we tap into the oil shale and the other as yet inaccessible sources then all you've done is doubled the available reserves. So instead of 40 years, we're talking 80 years and that's if we can suck up every possible drop and the current consumption rate remains unchanged!

Now if you wish to argue that there is some source that the Society of Petroleum Engineers and a host of other respectable industry organizations haven't counted, then feel free to do so. And please understand when I scoff loudly at your estimates as opposed to the expert's estimates. ~:)

If you wish to claim that demand isn't going to increase, then you may do that as well. It's rather absurd; but the White Queen managed to believe six impossible things before breakfast so I suppose you can too.

So, I'm willing to listen to your proofs that the sky isn't falling. Enlighten me. Show me the opinions of the experts that there is no coming shortage of oil and that the peak hypothesis is untrue; and I promise I'll give them all due consideration. ~D

Red Harvest

08-28-2005, 07:45

Hey look the sky is falling ~D

They have been saying that for how long now?

You dont even take into consideration shale oil. This is a their best quess it says. Well twenty years ago they were saying the samething. 20 years from now the same claims will still be being made. No matter what happens the market and free enterprise will handle it. There is no need for panic and extreme methods.

And you and I are going to die. Is that the sky falling? No, it's reality. We just hope it won't be any time soon. You might not agree with Hubbert, many thought he was a fool in 1956 when he predicted US lower 48 production would peak in 1970, but he turned out to be right. The interesting notes of late have been the overestimates in the reserves (not underestimates that you are counting on), and the fact that production is falling (as expected) except for in what were artificially constrained regions...Persian Gulf swing producers, who are now out of swing.

There is reason to panic, although panicking is not what we really need. Why have a sense of panic? It's like watching a movie where you can see something bad developing, but the victim cannot. There is nothing you can do in the audience but watch in horror. It is your lackadaisical attitude towards the increasing energy problem that gives me concern. It is also the general public's complete ignorance of what is going on, and stupid obsession with gasoline prices, which illustrates that people like to remain blissfully ignorant.

Free enterprise will handle it? How, like it handled the S&L crisis, or the Great Depression, or the '73 oil crisis, or the Iran-Iraq war oil crisis, or U.S. airline security before 9/11, or the stock market bubble? Did free enterprise put enough lifeboats on the Titanic...or properly train her crews into how to organize abandoning ship? Free enterprise is largely reactive in matters of public crisis. There is not a market for free enterprise to respond to until AFTER the event has hit.

This isn't something free enterprise is going to effectively prepare us for without govt encouragement to prepare. It sure as hell won't be on time, it will LAG badly, because U.S. enterprise is in crisis reactive mode anymore. The president claiming "conservation is not the answer" sure doesn't help and hasn't helped. It's like facing a bear with a double barrel shotgun, only to pluck one round out and throw it on the ground saying, "one barrel is all I'll need!"

More importantly, free enterprise might react properly somewhere...but the odds are that it will not be in the United States. Why? Because we are letting others take the lead while we sit in denial. Almost all other developed nations have been more progressive on energy issues. If two folks have to outrun a bear (since they failed to drop it with that single barrel) who do would you put your money on? The couch potato who routinely put off exercise and never left a buffet line until stuffed? Or the lean one who runs a few miles each day to stay fit?

Oil running out completely in short order isn't the problem. Peak oil is, where production can not keep up with demand...and especially growing demand. The assinine view is that we should put most of our efforts into pumping more, while continuing to use more. The result of this assinine policy is rapidly rising oil prices. The solution proposed: accelerate the assinine policy by trying to pump out faster still. Brilliant, brought to us by the same folks that made the $2 trillion dollar shortfall in budgeting...the very problem that many of us indeed predicted...those same ones you want to discredit.

And this of course completely ignores the massive technical hurdles and environmental aspects of the other fossil fuels you mention. Like it or not, carbon dioxide presents problems, and shale will make those problems accelerate in a way that will likely be beyond our control.

Red Harvest

08-28-2005, 08:14

Current consumption world-wide is about 25 billion barrels per year.

This number is likely a bit low, because there are various things being put on an oil equivalent basis (including the reserves.) There are so many factors I won't claim to understand a number of them, but I can see the forest for the trees. It depends also on what you couple it with.

Current production and use is at ~84 million bbl/day for a total of 30.7 billion bbl/yr. Growth over the past 20 years has been about 2% (this is used in various estimates...although it is often more like 1.6% actual.) Demand picks up when the world economy is strong, and flattens out when the economy is weak.

That is how I predicted the extended rise in prices by the way...it was elementary economic principles. We were emerging from a downturn so the industry numbers based on recent downturn influenced past were obviously bogus. Any one with the ability to read cyclic charts should have been able to see it. It was hilarious, I wish I still had all those reports now. They were all wishful thinking crap or worse yet, telling the gullible customers exactly what they wanted to hear. Doesn't mean I could get managers to listen...they think more like your average conservative in this forum, no I'm not kidding.

The true independent experts who study this have pointed out that the appropriate limitation estimates are *geological* and that tech reaches its limits.

Red Harvest

08-28-2005, 09:07

I want to use what works now and plan for the future.

No, you want to look at the past and continue to do what worked then. You are a mirror of corporate America at the present. Planning for the future is exactly what you try to discount. You dismiss it as a bunch of lefties and environmentalists. (Tempting to start an ozone/CFC discussion here.) That's why we haven't had a working energy policy. The energy bill that finally made it through was a mere drop in the bucket.

Somday yhou will wake up and realise this is a balancing act. The reason they dont drill more is because they couldnt refine it anyway. We need to both drill and build new refineries,

I'm wide awake. We haven't been doing a balancing act. The alternative energy investment fell to a trickle after the supply based crises of the 70's ended. Energy conservation has been nearly absent in industry since then--didn't seem to matter how good the rate of return was on my energy savings based projects, the managers were not interested. We have tech now that can start shifting our consumption, but it takes time, and we aren't making use of it. Our President openly ignores at least 2/3rds of the tools at his disposal.

Refineries? We've been over that popular piece of nonsense ad nauseum. It fails to explain today's market. In fact, there are efforts in the industry to shut down older refineries still--and I can think of one closure that is being opposed by the very "greenie" populations you complain about. ~;) Refinery capacity is added as needed...I should know, I've worked on several recent projects.

Your circular logic does not match the data.

First off we have to live now. Secondly once more there is plenty of oil left. We havent even gotten half of it yet at best.

Stick your head in the sand, poke your fingers in your ears. You want to go on PRETENDING that there is no problem. You have no solution other than to keep doing what we've been doing, despite real changes to the nature of the market and supply. We can live just fine now, but we can also invest in the future, rather than working on the wrong end of the beast.

Do you think we suddenly started running out of oil around a year ago? Oil is a commodity and its pricwe is whatever they think they can get away wiith. Their predicting shortages in supply and thats why the prices are going up just like they did in the 70s when we were "running out of oil"

You still can't get it...how many times do I have to explain the difference? That was an artificial supply reduction, this one is about demand outstripping supply, and not in an artificial way. It would not have mattered so much...but the U.S. no longer had excess supply, it hit its limit in 1970...as Hubbert predicted. But hey, you don't believe that approach. If you did, then you might understand what is wrong with your theories.

We've been running out of the lighter varieties of oil for decades (despite efforts to bolster production and "drill our way out") and now we're starting to fill the crunch. However, yes, we did start running out of production capacity about two years ago. If you go back and look at the "excess" supply capacity numbers I posted in the other thread the change is obvious (unless you are Helen Keller.) With excess supply capacity at less than 1% of total usage, there is no swing buffer, and growing production is critical just to prevent a major shortage. The Saudi's admit they are trying to keep up by putting in new production capacity. Everyone else is already tapped out.

Xiahou

08-28-2005, 10:12

Apparently, you didn't read it.Apparently you didn't even read the part you quoted.
During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced. Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil.Do you know the difference between net and gross?

Demand vs current production is fairly tight and no doubt it's playing a role in our oil prices- things such as the war in Iraq and the mess that is Venezuela have cut into supply. But, speculation is also responsible for a large part of the current price. The question is, how much? Here's (http://biz.yahoo.com/cbsm/050824/201ff6a392354a6bac5be8342b2ec5bc.html) a recent article from Yahoo Financial that talks some about it.

Also, for our reader's perusal is an informative article (http://en.wikipedia.org/wiki/Oil_price_increases_of_2004_and_2005) from wikipedia on the current oil situation. Here are a few excerpts, but I recommend reading it in its entirity.

Compared to two years ago demand is not significantly higher nor is supply significantly lower.
While total consumption has increased [6], the western economies are less reliant on oil than they were twenty-five years ago, due to substantial growths in productivity. In the United States, for instance, each $1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation this number had fallen to 1.15 by 2001
Economists say that the substitution effect will spur demand for alternate energy sources, such as coal or liquified natural gas. The increased price of oil also make previously impractical sources of oil attractive to businesses. The most prominent example of this are the massive reserves of the Canadian tar sands. They are a far less cost efficient source of oil than crude, but at 60 dollars a barrel have recently become very attractive to businesses. Recent months have seen billions of dollars invested in the oil sands.

The increased price of oil might also encourage greater fuel efficiency. Recent years have seen a move towards more fuel hungry sport utility vehicles in the United States and Canada, and this may be stopped by the high price of gas. There is an increasing market for hybrid vehicles since they are more fuel efficient; since the 1973 energy crisis, the front-wheel drive passenger car has replaced rear-wheel drive as the preferred layout for energy efficient cars. There is an increasing demand of crossover sport utilities which are more fuel efficient - especially for those based on passenger car platforms.

Aenlic

08-28-2005, 15:23

This number is likely a bit low, because there are various things being put on an oil equivalent basis (including the reserves.) There are so many factors I won't claim to understand a number of them, but I can see the forest for the trees. It depends also on what you couple it with.

Yes, I know it's low. I've been trying to be extra conservative on the number, using the most optimistic of the groups in my initial post, Greenspan and a corporation whose sole interest is in advising petroleum traders. And yet, the ostriches continue to plant their noggins in sandy holes and play silly word games so they don't have to consider the truth.

I have deliberately avoiding using site like this, http://www.hubbertpeak.com/, even though the experts listed on that site are some of the top experts in the field, including the guy who heads the Hubbert Center at the Colorado School of Mines.

So, who are we going to believe on the matter? Those who toe the corporate conservative party line and get their news from dubious sources at best so they won't have to hear anything which makes them uncomfortable, or those whose job it is to know these very subjects? I'm not willing to put my trust for the future of the oil supply solely in the hands of corporations who make their entire profit from the negative side of the supply/demand equation, and would lose money from sensible planning and greatly decreased consumption to delay the inevitable.

Gawain of Orkeny

08-28-2005, 16:22

And what I keep trying to tell you is that even if we tap into the oil shale and the other as yet inaccessible sources then all you've done is doubled the available reserves. So instead of 40 years, we're talking 80 years and that's if we can suck up every possible drop and the current consumption rate remains unchanged!

And Im telling you your wrong. Again they said this years ago and we keep finding more. Again its just a matter of making it profitable to extract and find. Besides that in 80 years Im sure we will be consuming far less. If we were really running out of oil we would be doing a lot more about it. You want to believe the oil companies who are making this extra profit that their telling you their running out of product LOL. Heck thats one of my favorite sales pitches. Hey I only have two left you better grap one.

Stick your head in the sand, poke your fingers in your ears. You want to go on PRETENDING that there is no problem

I never said that. I know theres only so much oil and I said we need to develope alternative enrgy. My point is leave it to the market and science and not to the government. Have a little faith in humanity.

Ser Clegane

08-28-2005, 16:41

You want to believe the oil companies who are making this extra profit that their telling you their running out of product LOL.

Actually IIRC oil companies even tend to overstate their reserves.

Royal Dutch/Shell had to correct the value of their reserves downwards and received the appropriate reactions on the stock market.

So to say that oil companies play dramatize the situation it oversimplifying the situation a little bit.

Red Harvest

08-28-2005, 17:21

I never said that. I know theres only so much oil and I said we need to develope alternative enrgy. My point is leave it to the market and science and not to the government. Have a little faith in humanity.

Rather than actively do something to address the problem, you want me to pray? Wish for the best? Hope folks realize what is happening before it actually occurs...like the most recent run up? I can't find any basis for having such faith in humanity at the moment.

This is the sort of problem where the role of government can be very positive in priming the market and development. Government is there to deal with the bigger issues that we can't prepare for with out it (defense, infrastructure, etc.) Govt has been the key component behind the build out of infrastructure. What we are talking about is not a welfare system for energy, but instead a strategic shift in investment and research. It depends on market and business, but the govt needs to help along the process so that we have things as they are needed, rather than later. With energy, the economic cost of responding late is huge because of the relative inelasticity. Especially when you already run a massive trade deficit...

The result of what you suggest is that we suffer the consequences of being behind, and that would work as your market driver. As I've pointed out, business will *respond*...later, not by being there waiting for us to catch up to them. They want the market clearly established and there before they invest. Government doesn't have to act that way. Even if we start to behave pro-actively, it won't help shift fleet fuel efficiency all that much for about 5 years. Ditto for major industry fuel efficiency--efficiency improvement in the short term usually comes from folks actually shutting down, becasue they can't afford to operate anymore. My approach differs in that I would prefer that we try to keep up or get in front of the problem, rather than chasing it.

The inelasticity of energy demand is largely absent from the "oil supply is not a problem" articles. Instead the articles say: demand will decline if prices rise, therefore producing self correction. They simply ignore the well known inelasticty of energy demand. I can't take such articles seriously.

What really happens when oil prices rise dramatically? From what I've seen looking at global growth and contraction is that *growth* in demand halts, but not so much the base usage. The base usage doesn't tend to shrink, at least not on the short scale of a year or two...despite doubling or tripling or more of prices.

Gawain of Orkeny

08-28-2005, 17:29

So to say that oil companies play dramatize the situation it oversimplifying the situation a little bit.

Well Im trying to get through to these guys ~D

Yes, there is an inflation risk. Yes, both Britain and the US are in rate-raising mode. And yes, there are anxieties over terrorist attacks on oil installations. But the world is not running out of oil.
There may be many fears spooking the world's oil markets. But there is no oil "shortage", just as there was no oil "shortage" in the early 1970s or the early 1990s. There are our own apprehensions. And then there are the facts of the matter.

According to a paper in the latest edition of Science magazine, proven world oil reserves exceed 1 tn barrels. Overall, the paper reckons that the world retains more than three trillion barrels of recoverable oil resources. Far from oil "running out" as some might have it, the big story of the oil industry over the past 50 years has been the way in which technological change has continuously worked, not only to yield up new discoveries but also to upgrade the size and extent of existing fields.
The paper, Never Cry Wolf -- Why the Petroleum Age is Far from Over, cites the example of the Kern River field in California, first discovered in 1899. Calculations in 1942 suggested that 54 mm barrels remained. In fact, over the next 44 years the field produced 736 mm barrels and in 1986 was reckoned to have another 970 mm barrels remaining.

From 1981 to 1996, the estimated volume of oil in 186 well-known giant fields across the world discovered before 1981 rose from 617 to 777 bn barrels -- and this without new discoveries. This trend, the paper argues, is likely to continue. For example, the Kashagan field in Kazakhstan was deemedin the second half of the 1990s to hold between two and 4 bn barrels.
In 2002, after completion of only two exploration and two appraisal wells, estimates were officially raised to between seven and 9 bn barrels. In February this year, after four more exploration wells in the area, they were raised again to 13 bn barrels. Recovery rates from fields worldwide have also increased, from about 22 % in 1980 to 35 % today.

Doomsters are wrong -- there's plenty of oil (http://www.gasandoil.com/goc/features/fex42298.htm)

And again this isnt touching on shale oil. As I said its the enviormentalists who are behend this. They want alternative enrgy sources developed not because their cheaper but because their cleaner. Theres absolutley nothing wrong with that. In fact as a also stated Im all for it. But dont try telling us were running out of oil. They cant wait for that day. Again this is the hypocricy Im speaking about. Just come out and tell the truth.

More

From that snapshot the oil situation doesn't look good. But there's little reason to assume that the next five years will simply see a continuation of current trends. Thanks to a combination of higher prices, increased exploration and production spending, and improved technology (page 32), oil supplies are poised to grow much faster than they have in recent years. Cambridge Energy Research Associates (CERA), a respected energy consultant, sees 20 or more major new fields coming on line each year through 2010. Altogether those fields could boost worldwide production capacity 15%, from 87.9 million barrels per day to 101.5 million by the end of the decade, CERA estimates. As a result, supply should exceed demand by 7 million bbl. per day, a huge leap from the current cushion of 1 million bbl. That should take pressure off prices. "OPEC countries have the potential, and [most] are increasing production," says Peter Jackson, a CERA researcher. "Non-OPEC production has increased at quite a lick compared to the 1990s."

Where is the new supply coming from? Pretty much across the globe. After hiking its exploration-and-production expenditures by 50% since 2000, to $12 billion a year, Exxon Mobil Corp. (XOM ) expects to add more than 1.2 million bbl. per day of new supply by 2007 from 27 projects, including ones off the coast of Angola and Russia's Sakhalin Island. Chevron Corp. expects its Big Five fields in West Africa, Australia, the Gulf of Mexico, and Kazakhstan to generate 800,000 more bbl. per day by 2009 -- a third of its current production. "We've got that pretty well mapped out," says Chevron Vice-Chairman Peter J. Robertson. "Projects are more complex now. They take a little longer. There's still plenty of oil in the world."
Is There Plenty Of Oil? (http://www.businessweek.com/magazine/content/05_28/b3942038_mz011.htm)

Red Harvest

08-28-2005, 18:02

Actually IIRC oil companies even tend to overstate their reserves.

Royal Dutch/Shell had to correct the value of their reserves downwards and received the appropriate reactions on the stock market.

So to say that oil companies play dramatize the situation it oversimplifying the situation a little bit.

Yep, it was about a 20% adjustment initially (3.9 billion bbls), but it has been restated several times since then and it looks like it is 23% now. There have been a number of questionable reserve increases over the years by various components of the industry. There is considerable potential for this to burst upon us like the accounting scandals in the U.S. stock market. It is the same sort of thing, being "aggressive" with the numbers and pushing the envelop--the motivators are identical. There is plenty of wiggle room and the rules (weak as they are) vary greatly from country to country. The Saudi Aramco reserves are questioned as well...but there is no good way to confirm them.

The following has some very good comments in it.
Discussion of the World Oil Market (http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=2486)

From the article:

The notion that finding and development (F&D) costs would steadily fall also now seems illusionary. While F&D costs stayed in a $5 to $7 per bbl range throughout the past decade, the total exploration and production capital expenditures rose from a steady $55 billion to $60 billion in the first half of the 1990s to over $124 billion in 2000. The sole reason that F&D costs per bbl stayed low was the rise in reported proven reserves.

New big discoveries are not happening we are now in the phase of doing a better job of extracting what we have.

Also from the article:

In 2004, oil markets finally began to shatter conventional beliefs. The widely held belief that $30 oil would cause a recession failed to pan out. The idea that high prices would soon induce a surge in new oil supplies never materialized. The theory that sustained growth in global oil demand was unlikely suddenly shifted to a more ominous question: Is oil demand growth now becoming a runaway train?

The bolded part is something I picked up on earlier...many articles talk of recoverable reserves at X dollars per barrel. By their logic, production should rise rapidly as price rises. Yet price hit levels far beyond what they predicted, and production is nowhere near keeping up (driving prices back down to predicted levels.) As some of the independent researches have noted, there are geological limits that are far more important than the current assumptions about recovery and tech improvement with regards to prooduction.

The article points to a system that is bottlenecked throughout. Distribution, production, exploration, and refining (on TYPE because 90% of discoveries are heavy crude.) It clearly shows this is a demand based problem, rather than some easily broken bottleneck. (Not mentioned with regards to refining is that its excess capacity in the U.S. exceeds the excess production capacity by several fold--note that is the excesses, not the totals.)

Red Harvest

08-28-2005, 18:46

Gawain,

The funny part about the links is all the boundless enthusiasm based on speculation, rather than science. The second article is counting on production from fields that have not been established. (It also appears to be about 3 million bbl/day in excess of current actual production levels...but never mind that.) The article also fails to mention the decline of many fields, such as the mature ones mentioned in the prior article. The mature ones continue to produce less each year. Contrary to what the article says, oil production has been declining outside of the Persian Gulf and Former Soviet Union.

At the rate things are going, we should have a pretty good indication in about a year (barring global recession whacking demand.) Afterall, we've used nearly a trillion barrels already, and are on course to use another trillion over the next 25 years. So even 3 trillion additional would run out in 60 years or so. Not to mention the CO2 impact on our lives.

Of course, it's not all about running out...it is more about how fast can you reasonably produce it and what happens to a resource when the end of it can be seen.

Xiahou

08-28-2005, 20:10

I see now that the 'sky is falling' crowd is now ignoring Greenspan once it was shown that he wasn't supporting your position- how convenient. He was an expert who we were fools not to believe when you thought he supported your view- now, well... look over here these experts still say what I believe. For every 'expert' you find, I can find another who takes a more level-headed view. ~:handball:

Look, obviously, there is a finite amount of oil out there- but the idea that we're going to wake up one morning and there will be no more gasoline is ridiculous. Every rational economist I know of expects oil prices to slide in the coming months due to the amount of the price that's due to speculation. Of course, prices aren't going to recede down to previous levels, but the fact is, even at today's prices, oil isn't expensive enough to justify transitioning many of the alternative forms of fuel that are currently available. The notion that we should further artificially inflate prices through additional taxation is counterproductive.

Aenlic

08-28-2005, 21:27

His facts haven't changed, his facts are the same facts used by all of the others, except the pie-in-the-sky everything's rosy crowd. His interpretation of the facts only speaks to the immediate future of oil prices, that's where he wanders off into speculation about possible technological advances that haven't happened yet. Economists don't have a very good record when it comes to technology and its effects on the economy. He doesn't address what will happen when the supply reaches the peak. I included his comments because they used the same figures of an increase from 1/3 of the oil to 1/2 of the oil - to 1 trillion available barrels in reserves. It seemed reasonable to expect that using any of the primary sources would just bring out the old "that's not a reputable source" excuse. My mistake in not foreseeing that you would instead focus on Greenspan's reliance on some as yet uninvented technology to save his economist bacon. ~D But the numbers still stand as he used them to set up the speech.

Please feel free to argue instead with the Petroleum Equities site, or the Society for Petroleum Engineers or the Colorado School of Mines, all of whom have a very real interest in trying to be as accurate as possible - it's their job. I noticed you've been ignoring the other sources. You've focused solely on the predictions of Greenspan rather than the facts as I used them. That's fine. Here's something you might find enlightening, from WorldOil.com, the online version of the industry/trade magazine:

TABLE 1. Projections of the peaking of world oil production.
Projected Date Source of Projection Background & Reference

--------------------------------------------------------------------------------

2006-2007 Bakhitari, A.M.S. Iranian oil executive a
2007-2009 Simmons, M.R. Investment banker b
After 2007 Skrebowski, C. Petroleum journal editor c
Before 2009 Deffeyes, K.S. Oil company geologist (ret.) d
Before 2010 Goodstein, D. Vice provost, Cal. Tech e
Around 2010 Campbell, C.J. Oil company geologist (ret.) f

--------------------------------------------------------------------------------

After 2010 World Energy Council World non-government org. g
2010-2020 Laherrere, J. Oil company geologist (ret.) h
2016 EIA nominal case DOE analysis/ information i

--------------------------------------------------------------------------------

After 2020 CERA Energy consultants j
2025 or later Shell Major oil company k
No visible peak Lynch, M.C. Energy economist l

a Bakhtiari, A.M.S. "World Oil Production Capacity Model Suggests Output Peak by 2006-07," Oil and Gas Journal, April 26, 2004.
b Simmons, M. R., ASPO Workshop. May 26, 2003.
c Skrebowski, C., "Oil Field Mega Projects - 2004," Petroleum Review, January 2004.
d Deffeyes, K. S., "Hubbert's Peak-The Impending World Oil Shortage," Princeton University Press. 2003.
e Goodstein, D., "Out of gas - the end of the age of oil," W.W. Norton, 2004.
f Campbell, C. J. , "Industry urged to watch for regular oil production peaks, depletion signals," Oil and Gas Journal, July 14, 2003;
g "Drivers of the energy scene," World Energy Council. 2003.
h Laherrere, J. Seminar Center of Energy Conversion. Zurich. May 7, 2003
i DOE EIA. "Long- term world oil supply." April 18, 2000. See Appendix I for discussion.
j Jackson, P. et al. "Triple witching hour for oil arrives early in 2004 - but, as yet, no real witches." CERA Alert. April 7, 2004.
k Davis, G. "Meeting future energy needs," The Bridge. National Academies Press, Summer 2003.
l Lynch, M. C., "Petroleum resources pessimism debunked in Hubbert model and Hubbert modelers' assessment." Oil and Gas Journal, July 14, 2003.

(from http://www.worldoil.com/magazine/magazine_link.asp?ART_LINK=05-05_mitigating-Hirsh.htm)

Note that in the general survey, only one source cited no date for a peak, an economist. Gee, go figure. All of those experts are "sky is falling crowd" and the one economist is the only true expert who knows what he's talking about, eh? Riiiight.

And, Gawain, you might want to read that article as well. It specifically states that the western oil shale resource in the U.S. amounts to a grand total of a possible 130 billion barrels. That's just 5 years worth of oil, without any increase in consumption. The article also says that current estimates for increased demand have it at 50% more than now by 2025, making your oil shale good for only 3.5 years. ~D

Strike For The South

08-28-2005, 21:35

The oil cant be gone it needs to hold out for a couple of months just till I get my lisnce and my truck :help: :embarassed: :help:

Red Harvest

08-28-2005, 21:38

I've been ignoring Greenspan since he ignored the fiscal realities of budget projections to support a hairbrained scheme and supply side econ back in 2000/2001.

Since when was Greenspan an expert on oil? The "experts" you speak of are not independent ones. And those "experts" have been largely wrong for the past two years.

This looks like a rather common example of herd mentality, something the experts are just as prone to. Most "experts" try to follow the herd even when there are disconcerting signs ahead. It is predicting the path largely from looking in the rear view mirror, rather than developing a deeper understanding based on contradictory indications. This price run up has not been like the others. And we've burned about 500+ billion bbl's of oil since the last major spike in '79.

You might not like the other theories, but they certainly have done well in explaining U.S. production and the peak that occurred in 1970/1971. Despite vehement denials that this would be the case, efforts to "drill our way out" have failed and U.S. production keeps falling.

BDC

08-28-2005, 21:48

I doubt oil is about to run out, certainly hope not anyway.

I expect prices to rise though as India and China desperately try to get hold of as much as possible. And even more supply issues.

Hopefully someone will create a viable alternative pretty swiftly before things get really hot. Especially as the dollar is linked to the barrel of oil so strongly. America in recession doesnt sound too fun either.

Red Harvest

08-28-2005, 21:53

The notion that we should further artificially inflate prices through additional taxation is counterproductive.

Counterproductive to what? It will end up decreasing future demand, which makes us less dependent on oil imports, it also means lower U.S. prices longterm (see the inelasticity part again.) It should move us closer to where we need to be long term--with investment in long term solutions rather than short term. It will bolster U.S. research, education, and leadership...it is investment in ourselves. If you see that as counterproductive then you live in a mighty strange place.

The idea of additional taxation is to reduce the economic burden later through investment today. It isn't general funds or social programs and such a tax should not be used for those. Sheesh... Of course, too many Americans like you have the compulsive consumption disorder, max out the credit cards, max out the national debt, all for "ME, ME, ME TODAY, TODAY, TODAY" with zero sense of the future.

The trends and theory indicate the oil prices on average will inflate faster than the rest of inflation and we are putting ourselves in a position where our economy and security are at risk. Seems worthy of investment.

Xiahou

08-28-2005, 22:01

Despite vehement denials that this would be the case, efforts to "drill our way out" have failed and U.S. production keeps falling.Do you think that could have anything to do with bans on drilling? There are reserves off the west coast that are totally untouched due to drilling bans. Would they make the US energy independant? Of course not- but the fact that we can't even consider them is silly. And as Greenspan said- our global reserves are still growing faster than we are depleting them.

The "experts" you speak of are not independent ones. And those "experts" have been largely wrong for the past two years. And your experts are totally independant and unbiased right? And for how many years have the "experts" in your crowd been wrong? How many times have they claimed with "incontravertable" evidence that we should have run completely out of oil by now?

It specifically states that the western oil shale resource in the U.S. amounts to a grand total of a possible 130 billion barrels.Really? According to the DOE (http://www.fe.doe.gov/programs/reserves/npr/NPR_Oil_Shale_Program.html) shale oil reserves are in excess to 2 trillions barrels. Quite a disparity don't you think?

Red Harvest

08-28-2005, 22:29

And your experts are totally independant and unbiased right? And for how many years have the "experts" in your crowd been wrong? How many times have they claimed with "incontravertable" evidence that we should have run completely out of oil by now?

I'm not aware of them actually predicting we would be out by now, nor are they saying we will run out in the near future. The case is really an economic one. However this clearly shows the fallacy in your thinking. Unlike you and some other "experts," they have an understanding of the impact oil demand's inelasticity to pricing. You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

One of these days perhaps you will start to put the economic concepts together. ~:handball:

Right now, you are still stuck thinking about the artificial spikes of the 70's...trying to use that to discredit those predicting production peaks. I'm split as to whether you are being dishonest by trying that tactic, or if you are being dense. There is a lesson to be learned from those spikes, however. The lesson was that the 1970 peak in U.S. oil production (which was predicted--and scoffed at by people thinking much like you) made the spikes painful and possible. It illustrated how increasing U.S. demand had made it very vulnerable when its own supply could not meet internal demand.

Gawain of Orkeny

08-29-2005, 02:02

You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

No were saying worry about it but dont panic were not close to running out while you take the opposite tac. You say were in serious trouble we say were not.

The case is really an economic one.

No its really an enviormental one and agan thats where the hypocricy comes in. Its all about stopping pollution and the fact that fossil fuels are seen as the biggest producers of this. The best thing that can happen for your side is for the price of gas to go up. It will spur alternative energy research, people will start buying more fuel efficient cars and it will make Bush look bad. What more could you ask for? Again stop trying to say were running out of oil although I now notice your backing away a bit from that position. Cant you admit the left is being hypocritical here?

AntiochusIII

08-29-2005, 02:19

I don't really see where the "left versus right" comes in when this is an economic issue about oil prices...

The environmental damage that the increasing consumption of fossil fuels cause is another matter, though, in my opinion, is a serious issue. Why would stopping pollution bad?

And why would anyone celebrate if the oil prices skyrocket and Bush looks "bad?" We will all be harmed, aren't we?

By the way, it's "hypocrisy" and not "hypocricy." :bow:

However, I am uninformed about the real picture of the issue therefore I'll reserve my opinion to myself. Though, looking at the facts presented in this thread, and the attitudes of the debaters and experts, I am inclined to agree with Red Harvest.

Red Harvest

08-29-2005, 04:10

No were saying worry about it but dont panic were not close to running out while you take the opposite tac. You say were in serious trouble we say were not.

:wall: We are past (or very near) the production peak, while the demand curve is continuing to rise. It's called a shortage...as in we don't have enough for all the customers...so prices will rise. With the inelasticity of oil it can be a very powerful jolt. This looks like a warm up.

Again you fail to recognize even the possibility of a production peak...one that was demonstrated in the U.S. 35 years ago, so the theory itself is sound. The primary uncertainties about the precise peak now are because of highly suspect inflation of reserves. There was a paper inflation of OPEC reserves some years back where a number of OPEC nation's added large amounts to their stated reserves so that they could receive a bigger share of the export quota. Iran, Iraq and Venezuela doubled their stated reserves in 1988 for example. Abu Dhabi and Dhubai tripled theirs the same year. From 1982 to 1995 there are nearly 400 billion barrels of "anomalous" reserve increases by OPEC.

No its really an enviormental one and agan thats where the hypocricy comes in.

No, it is not, and that is where *your* hypocrisy comes in. My livelihood depends on good economic decisions with respect to energy, and I'm not seeing them happen. With conservation and alternative sources we can exert some control, versus allowing the market to have even greater control over us. I see failing to act now as most likely resulting in a large economic hit later.

Good decisions can be environmentally friendly. This could easily be a Win-Win situation. Instead we have a president pursuing a Lose-Lose course. I would rather he made good choices. My being able to say, "I told you so" isn't real helpful if I have to go down with the ship. I don't want a $2 trillion dollar addition to the debt, or a rapid permanent inflation of energy prices, or for us to fail in Iraq or Afghanistan. I would rather have back the $2 trillion, have a progressive energy policy in place, not to have invaded Iraq on false pretenses, and not to have failed securing the nation at a critical time. Wouldn't matter to me if Bush, Gore, Kerry, McCain, or Cheney was in office if the individual was making sound desicions.

While we aren't going to run out of oil tomorrow we are going to run out of affordable oil in the relatively near future. And we are most likely going to have to replace the majority of traditional oil within my lifetime.

The alternative oils sources are not so nearly well developed as you think. Oil shale does not produce oil as we are accustomed to refining. It has a different character and it is going to have environmental costs associated with it that make oil look benign.

Xiahou

08-29-2005, 04:15

I'm not aware of them actually predicting we would be out by now, nor are they saying we will run out in the near future. The case is really an economic one. However this clearly shows the fallacy in your thinking. Unlike you and some other "experts," they have an understanding of the impact oil demand's inelasticity to pricing. You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

One of these days perhaps you will start to put the economic concepts together. ~:handball: Oh Red, you do make me laugh sometimes. ~;)
Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

I'm split as to whether you are being dishonest by trying that tactic, or if you are being dense.Maybe I'm stupid and lying? That's certainly a mature way to handle an argument regardless. :rolleyes:

There is a lesson to be learned from those spikes, however.Yep, and that is that when cost spikes- consumption eventually drops as it did.

Red Harvest

08-29-2005, 05:12

Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

You are still fooling yourself. Nothing will be ready if we aren't more active in working on it. That's the rub. The gap between what corporate research and what many believe it to be is enormous. U.S. research in general has been in a state of decline.

No, the 40-80 year supply estimates are not realistic. Why? They imply that oil will be pumping at near full rates to meet demand the whole time then just shuts off. They ignore the truth that production will be declining which is what peak oil is about. They ignore the price inelasticity--which is why it is not mentioned in their articles. The adjustment that is achieved comes at the expense of the economy through recession to support the vastly increased price. I remember the economic malaise of the 70's and early 80's. I would prefer not to repeat the experience.

Unfortunately, we are all in this together. I wish there was a way to let you have your extra 18.4 cents per gallon in Federal gasoline taxes in gas taxes, and for you to lose access to the interstate highway system, and other things Federal gas taxes support. Unfortunately, it isn't practical so you'll have to live with the massive burden of an extra $100/year or so in operating expense. ~:rolleyes: Be thankful you aren't using local toll roads, that can run you into thousands per year and is very inefficient--with a bunch of extra employees and effort to maintain a few miles of road.

Yep, and that is that when cost spikes- consumption eventually drops as it did.

We had a major recession and hyperinflation. Whole industries failed. The decline in consumption was slight for the magnitude of the spikes. It took a decade to start to respond meaningfully. That is the reason for getting in front of this. You want to save a few cents per gallon and perhaps $100/yr so that you can spend several dollars per gallon more indefinitely. No, thanks.

Xiahou

08-29-2005, 07:30

Unfortunately, we are all in this together. I wish there was a way to let you have your extra 18.4 cents per gallon in Federal gasoline taxes in gas taxes, and for you to lose access to the interstate highway system, and other things Federal gas taxes support. Unfortunately, it isn't practical so you'll have to live with the massive burden of an extra $100/year or so in operating expense. ~:rolleyes: Be thankful you aren't using local toll roads, that can run you into thousands per year and is very inefficient--with a bunch of extra employees and effort to maintain a few miles of road.You're a real cut-up, did you read any of the highway bill and see what our tax dollars are going towards? As I've said, the Interstate system as it was intended is complete. If Dallas needs a bigger capacity beltway, that's really not my problem- let Texas deal with it. The highway bill is chock full of pork and shameless vote buying by our legislators- that's what our fuel tax is funding, a big government slush fund. It was originally promised as only a temporary tax but, suprise, suprise- Congress keeps re-authorizing it. I wonder, has there ever been a case in the history of our government of a temporary tax that ever was actually temporary?

Now, back to peak oil... I invite everyone to read this (http://www.gasresources.net/Lynch(Hubbert-Deffeyes).htm) rebuttal of the Hubbert curve model as it's being currently applied. As is the case with many climate models, it seems that it takes too many assumptions as given and historically, has shown itself to be error prone. Sure, oil is finite and production is bound to fall off sometime for one reason or another- but the Hubbert curve has too many unknowns and has been wrong too often to expect it to predict when oil will begin to deplete with any accuracy.

Demon of Light

08-29-2005, 08:53

Funny that you guys should happen to be discussing this. I recently asked a British Economics professor a few questions on the same subject. Here is the reply I got. You should be able to recognize the questions I asked in the text.

Hi Alberto,

Thanks for your e-mail. Oil is not something I’ve studied, so I can only speak from first principles. It’s hard to talk about demand exceeding supply in a market where prices are flexible, as with oil.

>>Are we truly in a situation where demand far exceeds supply where oil is concerned or am I being decieved by various politicians and media outlets?

If the domestic price of oil were controlled, as in Zimbabwe, then demand could exceed supply and there could be a shortage of oil in the sense of people wanting to buy it at the prevailing (official) price but being unable to get it. But most countries take the world price for oil, slap on varying taxes and let the market clear through imports or exports. The world price adjusts so that demand equals supply. So I think you might need to reformulate your question - maybe to “are world oil prices rising because demand growth exceeds supply”? In which case, I think the answer would be yes. World demand for oil has been rising fairly rapidly - driven in part by the US and China - and supply has not kept pace. Hence rising world oil prices. I found a nice graph on world oil prices with a chronology:

http://www.eia.doe.gov/emeu/cabs/chron.html

>>If there is a supply shortage, is it based more on how much oil is made available or more on our ability to process and refine the oil we have?

Again, I’d put it in terms of price, rather than physical constraints like availability or ability to process. As the price rises, its worthwhile extracting oil that is more costly to mine. Oil reserves that are cheap to exploit are the first to be mined, so as these are exhausted, supply factors will push up the price of oil. Some people say we will never run out of oil, as when it gets very scarce, it will become extremely expensive and so not be demanded.

You could think of the above analysis in terms of supply and demand. The world demand for oil shifts out due to economic growth. The world supply is upward sloping, as it gets more costly to mine more oil. Hence world prices of oil rise as demand increases.

>>Is there reason to believe that there is some degree of collusion between energy companies to artificially inflate prices and create artificial energy shortages?

As I understand it, the key factor is how much supply is released onto the world market. OPEC effectively controls this and so artificially inflates prices. Going back to your first question, it’s not necessarily a shortage but it does push up the price. If you’ve done some economics, you’ve probably come across the free rider problem with cartels - it can pay individual OPEC members to cheat and sell more than the cartel agreed. One interpretation I’ve heard of Saddam’s invasion of Kuwait in 1991 was that he was trying to punish such cheating by Kuwait. I would not blame energy companies - these are often little more than middle men - it’s the governments of oil-exporting countries that are crucial - notably Saudi Arabia, which tends to play the key role in adjusting its production so that world supply matches that planned by OPEC.

I don’t know if these answers are of any use.

best wishes

(name deleted)

Papewaio

08-29-2005, 09:28

So your name is Alberto and the Economics professor likes you?

Well XXXXX at the bottom of an email or letter is normally kiss kiss kiss... or is that hug hug hug hug?

yesdachi

08-29-2005, 17:14

Not sure why this has been such a topic of discussion. As oil continues to become more expensive due in part to availability for whatever reason, people will just find alternatives. Just look at the number of emerging alternatives to appear on the scene in the last year. When there is a need for something, anything, someone develops it. Should an oil alternative been developed years ago, sure, but the demand was not as urgent. I think I will just sit back and watch capitalism work. Besides I’m busy worrying that the sun only has a few trillion years left before it burns out.

Gawain of Orkeny

08-29-2005, 17:30

Well said and directly to the point.

Demon of Light

08-29-2005, 21:44

So your name is Alberto and the Economics professor likes you?

Well XXXXX at the bottom of an email or letter is normally kiss kiss kiss... or is that hug hug hug hug?

My name is Alberto and XXX signifies a deleted name. But you knew that (insert a smilie that sticks out its tongue here)

Red Harvest

08-29-2005, 22:01

The highway bill is chock full of pork and shameless vote buying by our legislators- that's what our fuel tax is funding, a big government slush fund.

Yep, the GOP has proven itself to be all pork--the ultimate hypocrisy. However, the fuel tax is not a big government slush fund, nor is it restricting your way of life unnecessarily. I would like to set up a model community of likeminded folks for you to live in. There you would all get to chose what you want to pay for in govt, then you get the level of service you are willing to pay for. We could call it "Backwater, USA." There is really no debating with someone who thinks the govt shouldn't spend money on anything.

Now, back to peak oil... I invite everyone to read this (http://www.gasresources.net/Lynch(Hubbert-Deffeyes).htm) rebuttal of the Hubbert curve model as it's being currently applied. As is the case with many climate models, it seems that it takes too many assumptions as given and historically, has shown itself to be error prone. Sure, oil is finite and production is bound to fall off sometime for one reason or another- but the Hubbert curve has too many unknowns and has been wrong too often to expect it to predict when oil will begin to deplete with any accuracy.

Classic. This is the PERFECT specimen to illustrate typical rebuttals of trends that are real but folks don't want to accept. I've faced the same before many times at work. Lynch exemplifies those types of rebuttals: point to admitted flaws (hidden/proprietary data problems that are behind this debate in the first place), ignore well established things (like the decline in lighter crude discoveries, despite very great desire to find them...this is a lead indicator for the heavy crude by the way), end the "rebuttal" without really offering any better idea of what is going on.

Also funny...it stops in 2002...hmmm, and the peak predictions are largely after that. I can find you piles of reports like this that have all been proven incorrect in their projections, but strangely they aren't coming from the Hubbert side.

The most telling part of all is that without artificial restriction, supply is groaning to keep up with demand. In fact, it is falling behind and thereby driving up prices rapidly. Where is all that oil that was supposed to be waiting on tap when we hit $50/bbl (a doubling of recent prices?) It hasn't appeared and oil price is continuing to rise. Production has been boosted but it hasn't been able to keep pace.

Xiahou

08-30-2005, 00:15

Yep, the GOP has proven itself to be all pork--the ultimate hypocrisy. However, the fuel tax is not a big government slush fund, nor is it restricting your way of life unnecessarily.You just contradicted yourself. More sweeping, unsubstantiated generalizations- as Im sure people have come to expect from you. :rolleyes:

Also funny...it stops in 2002...hmmm, and the peak predictions are largely after that. I can find you piles of reports like this that have all been proven incorrect in their projections, but strangely they aren't coming from the Hubbert side.If you can't find wrong projections on the Hubbert side, you just plain aren't looking.

The recent authors, notably Campbell and Laherrere have apparently rediscovered the Hubbert curve, but without understanding it, at least initially. Campbell and Laherrere initially argued that production should follow a bell curve, at least in an unconstrained province. But this is demonstratively not the case in practice: most nations’ production does not follow a Hubbert curve. In fact, Campbell (2003) shows production curves (historical and forecast) for 51 non-OPEC countries, and only 8 of them could be said to resemble a Hubbert curve even approximately.

The authors initially responded to this weakness by arguing that the Hubbert curve could have multiple peaks, which of course means it would not follow a bell curve at all, and destroys the explanatory value of the bell curve. Multiple peaks- that's hilarious. The very idea that there could be multiple peaks destroys the idea of a bell curve, which then ruins any accuracy in the peak oil theory in predicting the 'final' peak- since you have no idea if a peak is the last one or just one of a sucession.

Not sure why this has been such a topic of discussion. As oil continues to become more expensive due in part to availability for whatever reason, people will just find alternatives. Just look at the number of emerging alternatives to appear on the scene in the last year. When there is a need for something, anything, someone develops it. Should an oil alternative been developed years ago, sure, but the demand was not as urgent. I think I will just sit back and watch capitalism work. Besides I’m busy worrying that the sun only has a few trillion years left before it burns out.That's exactly what me and Gawain are saying. This is all so similar to the Kyoto protocol nonsense- we are trying to be convinced to spend truckloads of money on solutions for a crisis that doesn't exist.

Goofball

08-30-2005, 00:46

Okay, to the original question.

Hypocrisies that bug me from "the right:"

1) Christians and Pro-Lifers who also support the death penalty. C'mon folks, give your heads a shake...

2) Folks who will cheer and hurrah about how the war in Iraq is about preserving American freedoms, but fully support things like the Patriot Act and "no-fly" lists. Puh-leaze...

3) People who complain that liberals are trying to force "the gay lifestyle" on them while on the other hand supporting every attempt by Christians to force their own dogma on everybody else. Infuriating.

4) Chickenhawks. Self-explanatory.

Hypocrisies that bug me from "the left:"

1) Folks who claim to be abhor racism, but will sit quietly or even laugh "politely" at a racist joke because they are too weak-spined to tell the teller of the joke that their "humor" is bigoted and not funny in the slightest. These people think they're part of the solution, but they're really part of the problem.

2) Unions. They claim to be fighting for the rights of the workers against "big business," but the unions themselves are just as "big business" as the companies whose morale and productivity they do their best to sabotage. Unions are leeches that suck blood from both the workers and the businesses.

There. There should be something to piss everybody off in there...

Gawain of Orkeny

08-30-2005, 01:34

There. There should be something to piss everybody of in there...

Not really I pretty much agree. Im glad someoone gets the idea off this thread at last. Although it has been one of the best debates Ive seen on oil here.

Red Harvest

08-30-2005, 02:18

You just contradicted yourself. More sweeping, unsubstantiated generalizations- as Im sure people have come to expect from you. :rolleyes:

No, it is not a contradiction, because I believe in reasonable spending projects, not PORK. You on other hand LIKE having the wool pulled over your eyes. If they say what you want to believe, you believe it. I'm used to it, worked with plenty of the same.

Your "unsubstantiated generalizations" comment is WEAK in the extremis. Have you actually looked at Federal spending under the Bush administration? They guy operates under the, "give borrowed money to everyone" premise. Look, FREE MONEY!!! Ain't I great!!! His party understands that and that's why we have a 2 trillion dollar addition to the national debt. I have $2 trillion reasons to support my statement. The GOP is buying votes by going into debt.

The last highway bill had 6,000 earmarks, including two $230 million dollar bridge projects. Total political pork = $30 billion.

Bush Pork Highway Bill (http://www.cnn.com/2005/POLITICS/08/10/bush.highwaybill.ap/)

or

Another Bush Pork Hotlink Sandwich (http://www.foxnews.com/story/0,2933,166682,00.html)

Unlike pseudo-"fiscal conservatives" I've been watching the wreckless spending by the GOP from the start. They have less than zero credibility when it comes to financial issues compared with the Democrats. Never thought I would be saying that...but it has been a case of live and learn.

Xiahou

08-30-2005, 05:35

You know the highway bill is almost exclusively funded by the federal gas tax don't you? You say the gas tax isn't pork- but everything Bush does is pork and you use the highway bill as proof. Comical really. ~;)

I'm not going to defend the highway bill- it's a waste of money and I've said that from the beginning. You're arguing in circles here. :dizzy2:
I've also never said the Bush admin has been fiscally responsible in domestic spending- in fact, I've said the opposite on many occasions. But feel free to keep putting words in my mouth if it makes it easier to win your debates.

Gawain of Orkeny

08-30-2005, 15:20

But feel free to keep putting words in my mouth if it makes it easier to win your debates.

Its his number 1 tactic. ~;)

drone

08-30-2005, 15:57

1) Christians and Pro-Lifers who also support the death penalty. C'mon folks, give your heads a shake...
Actually, I've always thought the liberal pro-choicers who opposed the death penalty were worse. The convicted criminal being executed has more right to live than an innocent fetus (who may or may not be "alive", depending on your viewpoint)?

On the left: Liberal Hollywood actors saying "Save the Planet" while driving their Hummers and Escalades around.

On the right: Declaring a war on terror while doing nothing to cut off the opposing sides funding (back to oil again, now how did that happen ~;) ).

Steppe Merc

08-30-2005, 16:09

Actually, I've always thought the liberal pro-choicers who opposed the death penalty were worse. The convicted criminal being executed has more right to live than an innocent fetus (who may or may not be "alive", depending on your viewpoint)?
Well, if it is a fetus, it should not be aborted. But abortion itself is not wrong, only after a certaint time, when it is more alive than not.

Gawain of Orkeny

08-30-2005, 16:23

But abortion itself is not wrong, only after a certaint time, when it is more alive than not.

More alive than not? ~D Once more from the moment of conception it is both alive and human.

Ser Clegane

08-30-2005, 16:27

Once more from the moment of conception it is both alive and human.

Actually at an early stage it's a number of human cells that have the potential to evolve into a human being.

BTW, perhaps we should move further discussions on this issue to the Abortion thread (https://forums.totalwar.org/vb/showthread.php?t=53232) ?

Gawain of Orkeny

08-30-2005, 16:36

BTW, perhaps we should move further discussions on this issue to the Abortion thread ?

I was thinking the same when I made that post. So back to hypocrisy.

How about everyone who complains about the national debt yet is in more debt percentage wise than the government. How many of you could live without debt?

drone

08-30-2005, 16:37

Well, if it is a fetus, it should not be aborted. But abortion itself is not wrong, only after a certaint time, when it is more alive than not.
In my statement, I'm not saying abortion is right or wrong, or making any declarations about when a fertilized egg becomes a living human. Nobody truly knows that now. I'm just saying that it's a bit odd for someone to oppose the death of a person convicted of a heinous crime, and yet support a woman's choice to potentially end the life of an innocent. I was just reversing Goofball's hypocrisy instance.

Personally, I am pro-choice and support the death penalty. I guess this makes me pro-death. ~D

Gawain of Orkeny

08-30-2005, 16:40

Personally, I am pro-choice and support the death penalty. I guess this makes me pro-death.

Nothing funny about that. ~;)

Steppe Merc

08-30-2005, 16:43

More alive than not? ~D Once more from the moment of conception it is both alive and human.
What proof is there? How is a fertlized egg different from an unfertilized egg? Is it evil for a woman to have periods, or a man to waste his sperm?
I understand and agree with outlawing the abortion fetuses in most cases, since it is far more along.
But is a fertilized egg, or even an embryo really human?

Gawain of Orkeny

08-30-2005, 16:46

I wont respond to you in this thread. Use the abortion thread to continue this debate please.

Red Harvest

08-30-2005, 19:48

But feel free to keep putting words in my mouth if it makes it easier to win your debates.

They were your comments, not mine. "Unsubstantiated" blah, blah, blah. You and Gawain love to make the "unsubstantiated" and "where's your proof" comments. When you get your proof you either go silent or accuse me of putting words in your mouth.

Demon of Light

08-31-2005, 23:21

They were your comments, not mine. "Unsubstantiated" blah, blah, blah. You and Gawain love to make the "unsubstantiated" and "where's your proof" comments. When you get your proof you either go silent or accuse me of putting words in your mouth.

This is enough. I realize that there is a tendency here to argue points forcefully and agressively. That, to a point, is fine. When it becomes personal though, it needs to stop.

Xiahou: Saying that everyone expects sweeping, unsubstantiated generalizations from a person is akin to saying "You're wrong because everyone knows you're stupid." This may not be what you meant but you should probably expect the target not to notice the difference and react accordingly. Maintaining a civil tone in debate requires that we play the ball, not the person.

Red Harvest: When you imply that a person is either dense or intellectually dishonest (to say nothing of implying selfishness even before that), you can probably expect a proportional response. In many cases, it isn't so much a case of an initial comment sparking a flame war but rather a gradual escalation into one that begins with a seemingly innocent remark. Also, if it weren't redundant to do so, I'd tell you roughly the same thing I told Xiahou.

P.S: For those of you who missed it and are wondering what the hell right I have to say any of this, I'll repeat what I said in a different post. A call recently went out such that all staff should be more involved in maintaining civility at the .Org. This means that I can't just walk away from situations like this anymore regardless of whether it occurs in my (dead) forum or not. While not as responsible as the actual forum moderators, I do have a mandate to respond to situations like this.