[R. Glenn Vawter, manager of oil shale projects for EGL Resources, in Colorado, where the Bush administration has spurred new development.] Posted on 12/23/2006 9:06:20 AM PST by kiriath_jearim
GRAND JUNCTION, Colo. — Oil shale has never made an American company more than a nickel or two; quite a few, in fact, have lost countless millions over the last century trying to cook oil out of the rock. R. Glenn Vawter, who has worked as an executive for many of the losers, knows all that only too well.
[R. Glenn Vawter, manager of oil shale projects for EGL Resources, in Colorado, where the Bush administration has spurred new development.]
Oil shale’s many starts and stops have driven Mr. Vawter’s career but have also unsettled his family life, forcing 37 moves during one 25-year spell early in his career.
But Mr. Vawter is still a true believer. His rock garden is adorned with huge shale boulders weighing over a hundred pounds, which he has lugged from job to job. His house is filled with shale bookends and shale paperweights engraved with names of companies he has worked for, including one that he had to shut down, laying himself off, during the last shale bust, in the 1980s.
Some may think Mr. Vawter a glutton for punishment. But suddenly at age 68, Mr. Vawter and his holy grail are back. Last month, the Bush administration opened up five large parcels of land in the Piceance Creek Basin in Colorado for oil shale research and development projects, and Mr. Vawter has bounded out of retirement to manage the efforts of EGL Resources, which will begin pilot tests early in 2007.
Government estimates of recoverable shale oil in Colorado, Utah and Wyoming put the reserves at 800 billion barrels — more than triple the proven oil reserves of Saudi Arabia.
(Excerpt) Read more at nytimes.com ...
We could have fuel for $1-1.5 per gallon without pumping one drop of shale oil or any kind of oil. Synthetic oil made from coal the same way Nazi did in WWII.
Tests were done in 1970s and synthetic oil was produced for $0.70 or less per gallon. If produced on mass scale it would cost even less than that.
For some "mysterious" reason entire program just disappeared shortly after that. Not to be a tin foil hat conspiracy nut but I bet oil companies had a lot to do with that.
US has a lot of coal. US is the Saudi Arabia of coal.
???? Right.
Imagine if Bush, back in 2001, would have quietly authorized drilling for domestic oil then on Jan 1 2005 suddenly announcing that the U.S. will no longer import Middle Eastern oil.
The charge for transport via the Alyeska Pipeline was raised $1-2 this week. Per barrel. This is because the volume is low and it costs more per barrel. This should jack North Slope oil right up to the OPEC price level. BP had another oil leak at the North Slope, but it was contained by the containment dike, which is good because we went to a lot of trouble to put those containment dikes in and it is heartwarming to see one actually work when needed.
"There's 200 to 500 billion barrels of oil in ND and Mont with estimates of the recoverable amount running from 3% on the low end up to 50%. This country is awash in oil, it's just going to be more difficult to get it from now on."
There is an equal amount readily available off the coasts of this country right now. But guess who won't allow drilling?
The dims would rather we suffer destruction from certain irreversable economic catastrophe than suffer reversable eco-damage from 'possible' drilling accidents.
Which makes more sense to you?
They won't even allow a survey which would be of national security interest in case of significant disruption. To my knowledge no one knows how much oil is off our coast since we're not even allowed to take a look.
Castro is going to give us a peek though when he strikes it big off the South Floria coast. Maybe if we ask real nice he'll sell us some at $75 a barrel.
Correct, that is how it is done now. Using electricity to produce the hydrogen by electrolysis of water eliminates the question of Carbon release, of which I am doubtful is a factor in global warming. The use of nuclear energy in breaking down of oil shale in a retort is also a winner. Sc--w the environmentalists.
Bilbray and Reid cooked up that lousy "Wilderness" and "National Conservation Area" in order to prevent any future mining activity or Geothermal development.
Then they claim to support energy and resource independence for America!
The Black-Rock is a mineral treasure trove, and the NCA needs to be repealed.
Repeal the Utah Escalante reserve status too, while we are at it.
All these perfect solutions have been mentioned thousands of times on FR. It's not happening.
21 Dec 2012 the last drop of cheap oil will be made into gasoline and pumped into the gas tank of my SUV.Didn't you miss the date by just a FEW years the wrong direction?
It's an obscure reference that is gradually becoming less obscure, and it is precisely known to the minute.
Trading up/down then?
There is no after. The Mayan calendar has no further entries.
You're completely precluding parallel universes unless you also observe strict parallism as to event occurance ...
It's not my calendar. The experts are already speculating how the Mayan calendar doesn't mean the stars will fall from the sky 21 Dec 12, but that a new cycle will begin, a Shangri-la of human understanding that won't need fossil fuel or carbon credits.
It's not my calendar.You seem to be observing it; can you explain the practical difference?
I am more observing those who are observing the Mayan calendar. It's like Y2K except this time it involves much more than those linked into COBOL apps. For example, one pointed out that our common calendar might be off five years and 2012 might be happening in 2007. This is 99.999999999% unlikely, but there will be more as we get closer to 2012. It's like millenialism, but with an extra shot not related to the end of a century.
I look forward to it then; it can't happen quickly enough ...
OPEC and its pricing policies have been subjected to constant international attention as well as criticism since 1973. While consumers find OPEC behavior to be irrational, OPEC tries to justify its policies as rational and in accordance with the realities of the international oil market. A survey of literature on the theoretical framework of world oil models in general, and OPEC models in particular, a linear econometric model for pricing OPEC oil has been formulated which describes a supply-demand equilibrium model comprising of supply, demand, and inflation-rate functions. Estimation of the behavioral equations are carried out by Ordinary and Two-Stage Least Square estimators. Econometric results from the estimation and simulation of the model seem to indicate that OPEC`s pricing behavior is market-responsive and may best be explained by employing the theoretical framework of market-equilibrium condition. A thesis/dissertation (Ph. D.) concerning this can be obtained from University Microfilms, PO Box 1764, Ann Arbor, MI 48106, Order No.88-27,509.
The Organization of Economic Co-Operation and Development is a group of 30 member countries sharing a commitment to democratic government and the market economy. With active relationships with some 70 other countries and economies, NGOs and civil society, the organization has a global reach. It is best known for its publications and its statistics, and work covering economic and social issues from macroeconomics, to trade, education, development and science and innovation. It has recently declassified a study titled OIL PRICE DEVELOPMENTS: DRIVERS, ECONOMIC CONSEQUENCES AND POLICY RESPONSES (ECONOMICS DEPARTMENT WORKING PAPERS, No. 412, by By Anne-Marie Brook, Robert Price, Douglas Sutherland, Niels Westerlund and Christophe André).
The impact on oil prices of different assumptions about economic growth or supply and demand elasticities can be assessed using a "calibrated" spreadsheet model of global oil demand and supply. World oil demand is comprised of three main regions: the OECD area (which is split into the three largest economies -- the United States, the Euro area and Japan -- and other OECD countries); China, which is among the most dynamic and oil intensive developing economies; and the rest of the world (ROW). On the supplyside, two groups of producer countries are distinguished: OPEC and non-OPEC. Non-OPEC producers are assumed to be "price takers" i.e. to produce until marginal costs equal the world price of oil. In contrast, the OPEC cartel may adjust production to influence prices.
Oil demand in each country or region (i= United States, euro area, Japan, rest of the OECD, China, and ROW) is a function of economic growth and oil prices:
LogDi=aoi+a1iLogYi+a2iLogPtwhere Di and Yi are respectively the demand for oil and real GDP; Pt is the price of oil (in real dollar terms); a1i and a2i are output and price elasticities of oil demand, respectively. World oil demand is determined by summing over all regions:
Dw = SigmaiDiNon-OPEC oil supply, StNon-Opec is related to oil prices:
LogSNon-OPEC = B0+B1LogPtwhere B1 is the price elasticity of non-OPEC supply.
There are two possibilities for OPEC oil supply behaviour. One possibility assumes that OPEC targets a constant market share. In this context, the OPEC supply function becomes:
SOPEC=Lamda0DwWhere Lamda0 describes OPEC's "optimal" market share.
The second possibility is that OPEC attempts to stabilize the price. Analysis suggests that stabilizing the price by increasing market share may be optimal long-run behaviour for OPEC.
World oil supply, then, is the sum of the two groups of producer countries, OPEC and non-OPEC, and equilibrium is defined by the intersection of Sw and Dw curves. In the case of a fixed market share strategy, the equilibrium solution -- marked with a bar --- imply that total equilibrium supply, Sw is a multiple of Non-OPEC equilibrium supply:
Sw=Snon-OPEC + Lambda0DwThe foregoing can be reduced to being congruent to: Snon-OPEC / (1-Lambda0)
The only exogenous variable to the foregoing is that of real GDP in each of the main oil consumer countries or regions (the United States, the Euro area, Japan, China and ROW) and assumptions are made for the short-term price elasticity of demand.
The estimation of oil demand elasticities can be very sensitive to both the equation specification and to the time period. Although there is consensus that long-run elasticities are higher than short-run elasticities, the range of estimates is still very wide. Differences emerge between OECD countries and developing countries, with the latter typically having lower price elasticities and often higher income elasticities, particularly if they are fast growing economies. In addition, there is evidence that oil demand may have become less sensitive to measures of income, with income elasticities estimated over the post-1986 period being considerably lower than those estimated over a longer time period.
According to Hunt, Judge and Ninomya (2003), long-run price/income elasticities for petroleum are -0.23 and 0.56 respectively. These figures are based on a model of sectoral demand for total energy in the UKingdom, 1971-1997. Gately and Huntington released figures in 2002 that suggested values of -0.64 and 0.56 (for OECD demand), -0.18 and 0.53 (for non-OECD demand), and -0.12 and 0.95 (fast-growing non-OECD oil demand). Pesaran, Smith and Akiyama (1998) suggest -0.1 to -0.3 and 1.0 to 1.2 (pooled estimates for Asian countries total energy demand,1974-1990).
In line with findings in academic empirical research these are assumed to be very low (-0.02 for the United States and Japan, -0.04 for the Euro area and -0.01 for China and ROW).
Empirical analysis of monthly crude petroleum prices, i.e., estimating the autoregressive parameter in oil price data that spans the period since the 1950s (Cashin et al. (1999)), shows that oil price shocks can be very persistent. The half life of a shock to the price of oil is more than six years using a least squares estimator, and up to infinity when the median-unbiased estimator is used. Even in the case of the lower estimate, these results would seem to suggest that price shocks to crude oil prices are highly persistent. However, evidence suggests that oil price shocks have become less persistent since the mid 1980s. It is estimated that the half life of oil price shocks has dropped significantly, to around one to two years.
According to the declassified OECD study, exploration, development, and extraction costs in the Middle East are reported to be less than $5 per barrel, while short-run marginal costs are generally estimated to be below $2 per barrel. But elsewhere, newly-discovered resources have tended to become smaller and more expensive to develop, being increasingly offshore, and the costs of exploration, development and production are high and rising relative to those in the reserve-rich Middle East. On the assumptions that initial market shares (38 per cent for OPEC) are maintained over the projection horizon, the baseline scenario generates a trend rise in the oil price to $35 a barrel by the end of the projection period (2030) from $27 per barrel in 2003.
The International Energy Agency (IEA) has projected that global oil demand will increase by around 1% annually over the period 2000-2030, leading to a 34% increase in global demand for oil by 2030 over 2000 consumption levels. Ain't nobody driving anybody out of the oil market (nor is oil ever going below $15).
I'm just curious though, WTF is the deal? What is the present price of oil, and why is it as high as it is? Did OPEC cut something off? I understand that they're practically pumping balls out (as is everybody else). Given the foregoing, what's the price driver? Aren't we in a period of global economic malaise and recession?
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.