Goodbye OPEC, Hello Independence

I do remember.

My Dad owned a hotel in south Florida.

That really put a dent in our business.

Then, inflation for everything skyrocketed.

All our employees were screaming for wage increases, and all our guests were screaming about room rate increases.

Those were the Ford-Carter years, a complete debacle economically.

It took us like six years to get our net profit (adjusted for inflation) back to the same level we had before the OPEC embargo started.

The environmentalist have to realize with their electric car dream is ?
How are they suppose to supply the electricity for those cars ?

Nuclear energy ?
Coal power plants ?
Oil powered power plants ?
Gas turbine power plants ?

All those electric cars won't be supplied with electricity with Solar or Wind power that's for sure.
So what traditional fueled power plant will they want us to use ?
How many carbon based cars, i.e. gasoline, diesel, propane, natural gas would a clean burning coal power plant take off the market ?
Would not clean coal be considered then a carbon neutral source since it takes many carbon burning cars off the road if your going to power all those electric cars with clean burning coal.
And screw Bill Clinton's executive order of closing off that part or what ever it is from being used to get that clean burning coal.

Electric cars are likely 20 years away from taking away real market share from gasoline engines.

TB Pickens though has laid out a program for natural gas to take away market share from oil via trucks and buses. He figures that would take away 40% of demand. He’s laying in natural gas stations all over the country currently. There’s a lot of big truck and bus companies now switching over.

I think the real deal, the electric generating power that makes the 21st century work is some form of nuclear power. there are several candidates. currently that looks best and most likely and cheapest is thorium lftr nuclear power plants. But they are a decade away at current rates of development. the good thing about them is that they’re not fusion reactors that keep retreating into the indefinite future. thorium reactors were done back in the 1960’s and then abandoned because they were not dual use and in richard nixon’s district. Right now there are companies in three or four countries including the USA that—with four companies—are working on developing them.

With fracking, OPEC oil export revenues are skyrocketing.

The rapid increase in production costs is “the dark side of the golden age of shale”.

Bernstein Research estimated that the non-Opec marginal cost of oil production - the cost of production for the most expensive new fields - rose to $104.50 a barrel in 2012, up more than 250% from $30 a barrel in 2002.

The most expensive oil fields essentially set the floor of oil prices, worldwide.

And for every $10 increase per barrel of oil price, OPEC's earnings soar by around $100 billion per year.

Fair enough - Venezuela can get at oil the old fashioned way...but I sure wouldn’t risk bringing modern equipment into there...some government official might just put a sticker of their national flag on it.

Here is a story from today, dealing with Canadian oil:

http://www.freerepublic.com/focus/f-news/3081541/posts

After the big and deadly fire a few months ago, every train fire will be reported. This train was headed to Vancouver, where its cargo could conceivably be sent to China and Japan...but its a long haul getting it there...and every accident like this will get publicity.

The company I work for has put its eggs in both baskets. We work for the railroads who haul the oil, and have even just landed a contract with a Canadian railroad. However, we are also working on the Bakken pipeline, which would eventually be part of the Keystone network....so we do a bit of work on the periphery of the oil patch (I even just designed a residential subdivision up there).

I have witnessed up close the vacillations that result from Keystone uncertainty. We have done a concept and cost estimate for a truck to rail transfer facility in North Dakota...but the client can’t get financing...because Keystone would kill this concept. So everyone sits in limbo.

I think Keystone will be built eventually...and much of it already has, and is being used to transfer oil throughout the Midwest. I may have blinders on, but I think Keystone = North American oil staying in North America (which btw and environmentalist should like, because less oil is being carted all over the planet). Even the oil that his the ‘international’ market at the southern end of Keystone will probably end up on our east coast...and would mean we import less oil directly from the muzzies.

How could gas prices go down when, outside the Middle East, the cost of production for the most expensive new fields is around $100 per barrel?
.............
That number is too high for the USA. the highest cost in the USA are about 80 @ barrel. Production costs scale down to 50@barrel. But the learning curve is steep and over a couple years they get in efficiencies that reduces costs
10-30@barrel.

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