Posted on 01/30/2005 8:24:37 AM PST by Woodworker
The price of oil remains high only because the cost of oil remains so low. We remain dependent on oil from the Mideast not because the planet is running out of buried hydrocarbons, but because extracting oil from the deserts of the Persian Gulf is so easy and cheap that it's risky to invest capital to extract somewhat more stubborn oil from far larger deposits in Alberta.
The market price of oil is indeed hovering up around $50 a barrel on the spot market. But getting oil to the surface currently costs under $5 a barrel in Saudi Arabia, with the global average cost certainly under $15. And with technology already well in hand, the cost of sucking oil out of the planet we occupy simply will not rise above roughly $30 a barrel for the next 100 years at least.
The cost of oil comes down to the cost of finding, and then lifting or extracting. First, you have to decide where to dig. Exploration costs currently run under $3 per barrel in much of the Mideast, and below $7 for oil hidden deep under the ocean. But these costs have been falling, not rising, because imaging technology that lets geologists peer through miles of water and rock improves faster than supplies recede. Many lower-grade deposits require no new looking at all.
(Excerpt) Read more at opinionjournal.com ...
But only because we allow them to. The $5 to $8 billion investment to develop the Alberta reserves is chump change. With but the minimum incentives on the part of the already wildly manipluated tax code it'd be no big deal to make Suadi Arabia once again as irrelevant as it shurely deserves to be.
This, however, presupposes the neutralization of the enviromental Nazis.
.... and there is the problem. Dealing with Canada on when, where and how you can drill and produce is a huge problem. It is made worse when an American company tries it.
If Quebec ever goes Alberta will follow within a year.
I have lived and worked in Alberta and understand how they feel. The problem however is with their national government and I don't see Alberta pulling out anytime soon.
This article does a good job pointing out that the key to understanding the market price of oil is political.
Ah well, money is the mother's milk of politics...
There's also a lot of potential to increase energy efficiency in the transportation sector. Energy was cheap all through the 90's so there wasn't much effort made to make cars, trucks and buses more efficient. But that's all changing very rapidly. I was reading about this Dutch company that has revolutionized electric motor drive and produces these very quiet and efficient electric buses. Look for those buses to go into use for short hauls at ski resorts and college campuses and then move into the mainstream. Hybrid engines are coming on fast in the auto industry too with 40% gains in mileage.
If there were an adequate supply, they could not drive the price upwards. It would plummet. Speculation and price-fixing aloane cannot levitate this market. It is simply too big. They would never be able to hold this price if there were more oil pouring out of the ground - and especially American ground.
I blame our environmentalist wackos and politicians, not the speculators. We have oil here for the taking and we have simply locked it up, preferring to go nationally bankrupt rather than risk a few (a very few) arctic terns and our environmental fantasies.
Can we have Alberta? Can we, can we, pleeeze?
And of course, you'd be precisely correct in doing so!!!
Much of the economic cost of exploration and production is complying with some excessive environmental regulations.
I heard a couple days ago that Phillips 66 was getting fined a huge sum of millions of dollars because of clean air violations. I know this has little to do with the cost of pumping oil, but it is part of the trickle down economics environmental regulations pose.
Probably in the Mid East, a lot less attention is placed on environmental stuff, hence, the lower cost of production and exploration.
I hope you really don't believe what you typed because it's not true.
BTTT!!!!!!
They can only manipulate the price so high until it becomes cost effective to extract it from shale. THEN the gig is up (and the mid-East becomes utterly irrelevent).
Neither do I, unless however, Quebec starts the race for the door. My prediction is that Canada as Canada would not last 5 years if Quebec left.
Might not be that great an idea. THe most conservative Canadian thinks like a Kennedy Lib. DO you really think that they'd be prepared to give up their "free" health care even if it meant that they'd finally actually get access to medical care.
btttttttt
Well, the Hunt Brothers.
The collapse of the silver market meant countless losses for speculators. The Hunt brothers declared bankruptcy.
By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. In August of 1988 the Hunts were convicted of conspiring to manipulate the market.
Well, so much for cornering the market.
The Coming Oil Crisis
You say the price of oil will rise much higher than it already has. Why?
"The problem we have is that there are 2.3 billion people in Chindia," Leeb says, using shorthand for a combined China and India.
"Today, China and India use the energy-equivalent of 5.5 barrels of oil per person per year, while rich nations use 39. No matter how rosy your thinking is as to the global supply of oil, there is no way there is going to be enough to satisfy the demands of an extra 2.3 billion people coming online."
The National Debt.
Please take a look at the charts and see how printing money and Nixon's gold standard move makes gold and oil rise in price.
The Hunt bothers were hedging because Nixon took the US off the gold standard in 1971.
The National Debt doubled between 1971 and 1979 and is on the RISE today because of Bush's policies.
Because of a higher global demand for oil (remember oil prices are based on Dollars) and the US printing money to finance the war just like Vietnam era everything is priced higher.
Check housing prices lately?
One more thing about oil prices and Asia. 1998 was the last time I bought gas in Northern Virgina at .86 a gallon. I just came back from working in Europe and I couldn't believe my eyes when I pulled into the gas station.
How could fuel sell at that low, low price.
The 1997-98 East Asian financial crisis cause all of those oil tanks to turn around and headed to US ports with load of oil and gasoline that couldn't sell in Asia.
As the prices fell the cop layed off stop people from speeding on the highways in 1998. Well it looked that way in those days. Higher speeds burns up more gas.
WOW! look at those 1999 enforcement moving citations increase in Ohio.
Thanks to the IMF South Korean Union Sues the IMF in the wake of the 1997-98 East Asian financial crisis.
So Asia is back on line. Oil is in big demand all over the world and I'm out of here!!!
Yep, there's is enough for everyone forever
by Secret Insider
Half a century ago every car could have double mpg with higher pressure fuel injection.
At some point those who manage the in~dust~trial fleet mpg dial setting* will allow same.
HP FI allows each hydrocarbon molecule change into energy without waste.
You could breathe the exhaust & drink the distilled water that comes out.
It's no secret, look into it.
* A crude capacity & refining ratio formula.
Hint= after no jets flying in the days following 9-11 you should have seen all the JP-5 & JP-8 going up the flares because all the storage & pipelines were full.
Then you could breathe the exhaust & drink the distilled water that comes out.
Hint= after no jets flying in the days following 9-11 you should have seen all the JP-5 & JP-8 going up the flares because all the storage & pipelines were full.
What do you mean "going up in flares"?
If you meant "FLAMES" why should they go up
because all the storage & pipelines were full?
Nixon didn't have much of a choice but to take us off the Bretton Woods "gold standard." And the oil embargo just made the problem worse. The two combined were pretty much an act of war by France and OPEC, IMO.
Environazi's motto;
OUR WAY OR EVERYONE DIES.
They prefer giving money to terrorists who care nothing about the environment than being more self sufficient.
So true.
Another point that is usually missed, is that oil is a global market. US does not have to be "energy independent" to seriously affect the global price. If we pumped 2 million barrels a day more (a fraction of our imports *and* a practical, obtainable goal) for our own use, that would, for all practical purposes, add the same amount to the open market. Bingo, oil prices take a serious dip.
40% of our domestic output comes from the North Slope. Drilling there passed the Senate by 1 vote. Where would we be right now without that one vote? Pretty scary to contemplate. Will we look back 20 years from now and wish we had tried harder to get those few votes needed to drill in ANWAR? Yep.
Didn't refit the Cit's because I was selling them as restored originals.
To make a real difference it has to be industry wide standard.
Fleet MPG has not really increased much beyond a minuscule factor of the formula stated above.
Radial tires made as much a difference as anything.
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