Posted on 04/25/2008 4:11:18 PM PDT by hamboy
Next year, if all goes well, Saudi Arabia will turn the spigots on the largest oil field to come online anywhere in the world since the late 1970s.
The Khurais complex, sprawling across a swath of red dunes and rocky plains half the size of Connecticut, is expected to add 1.2 million barrels a day to an oil market caught between growing demand and a paucity of significant new discoveries. The twin forces have led to historically high prices for crude oil, which settled at a record $117.48 on Monday.
(Excerpt) Read more at online.wsj.com ...
When you hear about drilling in New York State, you know greed is good.
I used to think the oil perpetualists would begin to come around when oil hit $60 a barrel. Then $80. Then $100. I now realize that oil could be $200 and some folks would still be insisting that all we need to do is punch another couple of holes in the ground.
I'm all for increased drilling. But we also need to be laying the foundations now to transition to a post-oil economy over the next 20-30 years.
As far as Florida, it's far more than the western panhandle. Cuba and China are teaming up to drill off the Florida Keys as we speak. The entire Florida coast is prospective, but we somehow don't have the political will to go get it. This is despite the fact that the Texas and Louisiana coast have been drilled for 50 years and there are no waters filled with oil washing ashore there.
Baltimore Canyon off the east coast still looks like a good spot to find oil. Offshore California is already a known place to look and find, but that's been shut off. And Alaska, of course. It's the biggest state in size BY FAR in the union, and it lives off of oil. If it had to live off the salmon industry it would be a third world place.
But Alaska is largely owned by the Federal government. And Nancy, and even John McCain, don't want to let oil companies take up a few acres out of a few bazillion acres, to bring us new supplies of oil.
It's just nuts.
The abiotic oil nonsense has given a lot of them second wind.
Probably more than a second wind since that nonsense comes up at least twice a year here with several hundred responses in support of it on each thread.
I'd guess it's at least on its 15th wind here, and I'm sure we'll hit 20 by 2010.
If oil were abiotic, we wouldn't drill so many dry holes. We have lots of expert commentators on things they actually know nothing about.
The availability of oil is directly related to the cost of finding it and extracting it.
If oil supplies are low, prices go up, and fields that weren’t financially viable to drill will become viable to drill and extract oil from. Then you start getting into the whole thing of pumping in oil or steam, drilling at weird angles, drilling in places you normally wouldn’t and so on.
Heck, if prices go high enough, we just might start doing the shale oil thing.
Or so Thomas Sowell says...:)
Well put as regards the Saudi’s options. The Saudi’s have little else than oil unless somebody designs a very cheap method of desalination. They are wise to pace their output. They may well already have damaged thier fields pumping to support the Gulf War. I’m not making excuses for them, just explaining their actions makes sense, at least for them.
Tom is nearly always right, and Shell Oil has developed a method to get shale oil for about $30/bbl.
We agree : ) Except that we are saying it differently. The goal of the low cost producer is to keep the price point rising, without triggering other producers to jump in and create more supply than demand. No one is going to spend billions and years preparing to produce oil as long as the Saudi's have the capability of opening the spigots and driving them out of business. Exxon would rather wait until the cheap oil is out of the system, before they ramp up production.
This is all just a big game of chicken. The other thing is that the market seems to be acting like this is a short squeeze. I think it is a fifty/fifty proposition between $200 oil and $50 oil.
We agree : ) Except that we are saying it differently. The goal of the low cost producer is to keep the price point rising, without triggering other producers to jump in and create more supply than demand. No one is going to spend billions and years preparing to produce oil as long as the Saudi's have the capability of opening the spigots and driving them out of business. Exxon would rather wait until the cheap oil is out of the system, before they ramp up production.
This is all just a big game of chicken. The other thing is that the market seems to be acting like this is a short squeeze. I think it is a fifty/fifty proposition between $200 oil and $50 oil.
If Shell Oil can get shale oil for 30 dollars a barrel, then why aren’t they?!!
They could fatten their margin by tripling it, and still be competitive enough to steal the market from the Saudis.
About 1976 or soon after the Dept of Energy was established to begin making the transition. Then the D of E was tasked to manage the nuclear materials and the transition was put on the back burner. 30 years ago was the time to do this and it was begun, and now the transition is about where it was then. Also the Apollo moon program was ended and the Superconducting Supercollider was cancelled. We have the legacy we have and we have to deal with it whether it is too late or not because we're here and nobody else is.
All apparently true, and the corollary is that oil will cost more.
Well, they need to make a decision to expand the technology: Billions. Also, they need to decide that nothing will cause the oil to go down below the cost of production. Offshore may still be the most intelligent alternative. The technology does exist though.
I’m quite sure the oil co’s have made bigger, riskier investments in the past. And also taken bigger losses.
Eh, that may or may not be so. What I’m sure about is it is their money to invest and they’ll invest it where it will yield the most by thier measure.
I see I should have addressed this yesterday. The "production cutbacks" I was referring to is the the refinery cutbacks in this country. Demand is down, inventory is down, and they are cutting back production to raise prices. That is something the farmers have always dreamed about doing.
Maybe you would like big oil to run our food supply, too?
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