Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

There Will be No Economic Recovery as the Era of Cheap Oil Comes to an End
OilPrice.com ^ | 08/03/2010 | Chris Nelder

Posted on 03/09/2010 9:40:33 AM PST by goldenwings

When oil crossed $120 a barrel for the first time in May 2008, oil cornucopians knew they were in trouble. Prices had quadrupled in just five years, yet had failed to bring new production online. Regular crude had flatlined around 74 million barrels per day (mbpd). The case for peak oil was looking stronger with every new uptick in crude futures.

The following month, prominent peak oil critic and cornucopian Daniel Yergin of IHS-CERA changed his stance: The peak oil threat would be neutralized by peak demand. Gasoline consumption had peaked in the U.S. and Europe, he argued, due to the combined effects of increasing efficiency, biofuels, and the recession.

In 2009 the peak demand story seemed confirmed, as prices stabilized around $70 in June, and U.S. consumption remained well off its previous high. Most people thought the nearly 2 mbpd decline in U.S. petroleum demand from 2007 through 2009 owed to efficiency and people driving less.

In reality, only about 15% owed to reduced gasoline demand. The other 85% was lost in the commercial and industrial sector: jet fuel, distillates (including diesel), kerosene, petrochemical feedstocks, lubricants, waxes, petroleum coke, asphalt and road oil, and other miscellaneous products.

Very simply, when oil got to $120 a barrel it cut into real productivity, and forced the world’s most developed economies to shrink. At $147, it wreaked serious damage.

As I explained in “Investment Themes for the Next Decade,” the new normal will be cycles of bumping our heads against the supply ceiling, falling dazed to the floor, rising back to our knees, then finally standing, only to bump our heads against the ceiling once more.

Scooters Will Kill SUVs

Two interesting news stories crossed the wire this week, which portend badly for the world’s #1 net importer, the U.S. Full article at: No economic Recovery


TOPICS: Business/Economy; Miscellaneous
KEYWORDS: alternatives; democrats; drillheredrillnow; economy; energy; gasoline; obama; oil; peakoil

1 posted on 03/09/2010 9:40:33 AM PST by goldenwings
[ Post Reply | Private Reply | View Replies]

To: goldenwings

Oil prices are determined by speculaters.....not demand...not abundance!!!


2 posted on 03/09/2010 9:43:52 AM PST by ontap
[ Post Reply | Private Reply | To 1 | View Replies]

To: goldenwings

Wow, it’s like, 2007, all over again!


3 posted on 03/09/2010 9:43:54 AM PST by RockinRight (Obama Logic: Global Warming causes blizzards, and deficit spending balances budgets.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: goldenwings

Drill Here; Drill Now!


4 posted on 03/09/2010 9:47:49 AM PST by afraidfortherepublic
[ Post Reply | Private Reply | To 1 | View Replies]

To: afraidfortherepublic; goldenwings

PS: We need refineries too.


5 posted on 03/09/2010 9:48:25 AM PST by afraidfortherepublic
[ Post Reply | Private Reply | To 4 | View Replies]

To: afraidfortherepublic; goldenwings

And watch that evil Obamaperson. He’s trying to put all of the land off limits.


6 posted on 03/09/2010 9:49:23 AM PST by afraidfortherepublic
[ Post Reply | Private Reply | To 5 | View Replies]

To: afraidfortherepublic

actually I read there is an overabundance of oil refineries in this country right now and their losing money hand over fist.


7 posted on 03/09/2010 9:51:40 AM PST by utherdoul
[ Post Reply | Private Reply | To 5 | View Replies]

To: utherdoul

Several have even been shut down recently.


8 posted on 03/09/2010 9:55:32 AM PST by tatown (Obama is Kenyan for "turd")
[ Post Reply | Private Reply | To 7 | View Replies]

To: goldenwings
There Will be No Economic Recovery as the Era of Cheap Oil Comes to an End

Bummer. Oh well, I'm just old enough that I don't care. My family will just have to load my coffin on a donkey cart and wheel me to the cemetary -- unless they decide to splurge on renting the donkey too.

9 posted on 03/09/2010 9:55:59 AM PST by kittykat77
[ Post Reply | Private Reply | To 1 | View Replies]

To: goldenwings
This is only true, because for 40 years since the last oil price shock, our government has done nothing to avoid the next one.

We should build proven viable sources of energy at breakneck speed to end our dependence on foreign oil.

Build nuclear as fast as we can, and provide surplus electricity at variable cost to hydrogen producers and vehicle battery recharging stations. Convert the cars off of oil, and our future no longer depends on foreign countries, and we will no longer be funding Muslim terrorist states.

10 posted on 03/09/2010 10:06:49 AM PST by DannyTN
[ Post Reply | Private Reply | To 1 | View Replies]

To: goldenwings

Thing is globalism has worked the other 6 billion folks on this rock like their oil usage too, and they can bid a little higher each year, especially since we have Obama out to destroy America and their economies are growing. We have basically been on a sideways trend for crude oil production since 2005, but the price signal says we should be bursting at the seams with new production, but its not happening, production is flat to declining.


11 posted on 03/09/2010 10:13:07 AM PST by junta (S.C.U.M. = State Controlled Unreliable Media)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ontap

The problem is the left being able to create artificial scarcity through the politicians and bureaucrats they effectively control. There is no energy shortage, peak oil, etc. There is a political problem.


12 posted on 03/09/2010 10:17:10 AM PST by achilles2000 (Shouting "fire" in a burning building is doing everyone a favor...whether they like it or not)
[ Post Reply | Private Reply | To 2 | View Replies]

To: kittykat77

My family will just have to load my coffin on a donkey cart


Sorry but that’s now against the law. Have you not read the recent PETA sponsored bill regarding animal cruelty and forced animal labor?


13 posted on 03/09/2010 10:18:14 AM PST by Joan Kerrey (The bigger the government = The smaller the people)
[ Post Reply | Private Reply | To 9 | View Replies]

To: goldenwings

I remember hearing on the radio day after day after day about how the increase in gasoline prices was all Bush’s fault. In the past nine months the average cost of a gallon of gasoline has gone from $1.689 to $2.759 and not a peep about it being Obama’s fault.


14 posted on 03/09/2010 10:39:53 AM PST by MIchaelTArchangel (Before anyone complains about the term jerkwater, please open a dictionary.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Joan Kerrey

Well, I guess it means my trip to the Sunny Vistas Eternal Rest Farm will be via ethanol-fueled rider mower.


15 posted on 03/09/2010 10:50:21 AM PST by kittykat77
[ Post Reply | Private Reply | To 13 | View Replies]

To: DannyTN

...”We should build proven viable sources of energy....
Build nuclear...surplus electricity at variable cost to hydrogen producers and vehicle battery recharging stations...convert the cars off of oil, and our future no longer depends on foreign countries, and we will no longer be funding Muslim terrorist states.”

Bwahahahahaha. Haven’t you heard that Barry The Muslim is on this?

Bwahahahhhhahahahaha.

Only a minimum of 34 months left. Don’t hold your breath.


16 posted on 03/09/2010 10:50:48 AM PST by gathersnomoss (General George Patton had it right.)
[ Post Reply | Private Reply | To 10 | View Replies]

To: achilles2000

Absolutely correct...the left is intent on making anything that helps this country scarce. Shortages...high prices...all an elaborate scheme to hurt our economy and bring it down.


17 posted on 03/09/2010 10:51:43 AM PST by ontap
[ Post Reply | Private Reply | To 12 | View Replies]

To: gathersnomoss
True, Barry the Muslim is successfully pursuing a no energy plan.

But congress is complicit or Barry the Muslim couldn't get away with it.

18 posted on 03/09/2010 10:53:44 AM PST by DannyTN
[ Post Reply | Private Reply | To 16 | View Replies]

To: goldenwings

OK, how about trying this: you know where the oil is and how to get to it. Just go and get it. No announcements, applications for permission, just start drilling. Hire security sufficient to make enviroweenie snoopers disappear. I doubt if they (the greenie weenies) have sentries stationed at ANWR anyway.

What are the Marxists of the current regime going to do, send in the Army when they find out a couple of years from now?

< /rant >


19 posted on 03/09/2010 11:00:50 AM PST by JimRed ("Hey, hey, Teddy K., hot enough down there today?" TERM LIMITS, NOW AND FOREVER!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: utherdoul

There hasn’t been a new refinery approved and built for more than 30 years. The refineries that we have are aging and closing. Because of the “boutique” gas blends required in many parts of the country, we have a severe shortage of refining capacity. THat is the excuse for not drilling — no place to refine it.

All we need is another couple of hurricanes in the Gulf, and we’ll be looking at $8/gallon gas. Of course the Dems think that $10/gallon is OK.


20 posted on 03/09/2010 2:34:16 PM PST by afraidfortherepublic
[ Post Reply | Private Reply | To 7 | View Replies]

To: goldenwings

BTTT


21 posted on 03/09/2010 7:11:04 PM PST by thackney (life is fragile, handle with prayer)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson