Peak oil is BS!

Minuteman. I'm not doubting that oil might eventually run out, especially if it is really a finite source. I'm willing to except that we might be at or already passed peak oil when it comes to the current oil wells that are in production. However, thats a hard pill for me to swallow considering how much oil is known to be within our own borders and off-shore that is off-limits. It appears to me that the theory of peak oil could play in the favor of oil companies in a false supply and demand, resulting in higher prices. I'm not sure if I'm conveying what I'm trying to say very well. I was hoping some of the articles would help me get that across.

 

http://www.chron.com/disp/story.mpl/ap/fn/5693785.html


April 11, 2008, 2:33PM
Energy Sector Roundup: Oil Out of Gas


NEW YORK — Following is a summary of top stories in the energy sector Friday afternoon.
Crude Holds Its Ground


Oil ended the day flat, keeping its distance from that $112.21 a barrel record set earlier in the week. Light, sweet crude for May delivery fell 70 cents to $109.41 on the New York Mercantile Exchange. But retail gas and diesel prices jumped to new records.
Light, sweet crude for May delivery rose 3 cents to $110.14 on the New York Mercantile Exchange, as the stock market took a battering _ shaken by disappointing first-quarter earnings from General Electric and sobering news of gloomy consumer sentiment.
Gas prices at the pump added 0.8 cent to $3.365 a gallon, according to AAA and the Oil Price Information Service. Retail diesel prices rose 2.1 cents to $4.066, topping the previous high set a day earlier.
In other Nymex trading, heating oil futures added 0.35 cent a gallon to $3.1975, while gasoline futures gained 1.52 cents at $2.8073 a gallon. Natural gas futures slipped by 19.7 cents to $9.901 per 1,000 cubic feet.
IEA Says Oil Demand Slipping
The International Energy Agency says demand for oil will slip in the coming months as the global economy slows _ but prices may remain high because of uncertainty over supply.
The Paris-based IEA revised downward its overall forecast for oil demand in 2008 by 310,000 barrels a day to 87.2 million barrels, following new projections on slumping worldwide economic growth by the International Monetary Fund.
Falling demand in rich countries in the past delivered some relief from high oil prices, but the IEA also noted a drop in global oil supply in March, by 100,000 barrels a day.
The report forecasts a global oil supply surplus in April and May, but said a similar surplus last year did little to stem rising oil prices.
Oilfield Services May See Slower Growth
Shares of oilfield services companies sank with the broader market in Friday's session. The Philadelphia Oil Service Sector Index (OSX) fell about 1.5 percent in afternoon trading, to 296.79.
As the first-quarter earnings season gets under way, Calyon Securities analyst Mark Urness said investors can expect slower growth from service and drilling companies after average 7 percent revenue growth over the past 2 1/2 years.
"However, we expect oil service and drilling companies to show slightly moderating but attractive earnings growth in the first quarter of 2008 both on a sequential and year-over-year basis," he said. "In our view, some midcap equipment companies, onshore drillers and most deepwater drillers will drive the earnings growth."
Schlumberger Ltd. kicks off the earnings season for the sector a week from today, and Urness expects a "rocky start" with the company missing analysts' estimates of $1.12 per share.
"During the first quarter, rising international demand driven by the Eastern Hemisphere and Latin American markets is expected to be offset by some weakness in North America, resulting in the large-cap equipment companies showing flat sequential earnings."
Fewer Rigs Working in U.S.
The number of rigs actively exploring for oil and natural gas in the U.S. this week dropped by 15 from last week to 1,815.
Baker Hughes Inc., which tracks rigs worldwide, said 1,451 were looking for natural gas and 355 for oil. Nine are considered "miscellaneous."
A year ago, the rig count stood at 1,758.
This week, 62 rigs are working offshore _ almost all are in the Gulf of Mexico.
There are 112 rigs working in Canada, down 14 from a week ago, up 15 from a year ago.
China March Oil Imports Hit Record
China's oil imports surged to a record 17.3 million tons in March, according to government data.
China, which imports almost half the oil it uses, imported an average of just over 4 million barrels a day last month. The U.S. imports about 10 million barrels of oil a day and remains the biggest consumer of petroleum in the world.
Japan imported about 4.4 million barrels of oil a day in February, based on data from the country's Natural Resources and Energy Agency.
China's oil imports in the first quarter of the year rose 15 percent from a year earlier, to 45.5 million tons. The value of those imports jumped 91 percent, year-on-year, to $30 billion, as the price of crude oil surged.
Energy Dept. Offers Loan Guarantees for Nuclear, Renewables
The Energy Department says it will start taking more applications this summer for as much as $38.5 billion in loan guarantees for projects that reduce or eliminate greenhouse gas emissions. That includes nuclear and renewable energy.
Up to $18.5 billion in guarantees could go to nuclear power and $2 billion for facilities linked to "front-end" activities such as uranium enrichment.
DOE said it may also provide $10 billion for efficiency, renewable energy, and transmission projects, and $8 billion for advanced fossil energy projects.
The Energy Department has the budget authority to issue the loan guarantees through fiscal 2009.

 

http://www.iags.org/futureofoil.html

The Future of Oil



Oil was first discovered in the U.S. in 1859. At the beginning of the 20th century it supplied only 4% of the world’s energy; decades later it became the most important energy source.
Today oil supplies about 40% of the world’s energy and 96% of its transportation energy. Since the shift from coal to oil, the world has consumed over 875 billion barrels. Another 1,000 billion barrels of proved and probable reserves remain to be recovered.

From now to 2020, world oil consumption will rise by about 60%. Transportation will be the fastest growing oil-consuming sector. By 2025, the number of cars will increase to well over 1.25 billion from approximately 700 million today. Global consumption of gasoline could double.

The two countries with the highest rate of growth in oil use are China and India, whose combined populations account for a third of humanity. In the next two decades, China's oil consumption is expected to grow at a rate of 7.5% per year and India’s 5.5%. (Compare to a 1% growth for the industrialized countries). It will be strategically imperative for these countries to secure their access to oil.

Where are the reserves?
Proved oil reserves are those quantities of oil that geological information indicates can be with reasonable certainty recovered in the future from known reservoirs. Of the trillion barrels currently estimated, 6% are in North America, 9% in Central and Latin America, 2% in Europe, 4% in Asia Pacific, 7% in Africa, 6% in the Former Soviet Union. Today, 66% of global oil reserves are in the hands of Middle Eastern regimes: Saudi Arabia (25%), Iraq (11%), Iran (8%), UAE (9%), Kuwait (9%), and Libya (2%).

<table class="black7" align="right" border="0" cellpadding="2" cellspacing="0" width="225"> <tbody><tr> <td align="center" width="225"></td> </tr> <tr><td align="center">"It's important for Americans to remember that America imports more than 50 percent of its oil -- more than 10 million barrels a day. And the figure is rising. [..]this dependence on foreign oil is a matter of national security. To put it bluntly, sometimes we rely upon energy sources from countries that don't particularly like us." - George W. Bush, February 25, 2002 </td></tr> </tbody></table> Following 9/11 and in light of the rise of radical Islam many have called for reduction of the dependency on Middle East oil. To offset the growing influence of Middle East producers, non-OPEC countries in Africa and Former Soviet Union have increased their production considerably. Many have even suggested that Russia could take on OPEC and help shift global oil supply away from the Middle East. The Washington Post even claimed that Moscow is "on its way to becoming the next Houston—the global capital of energy." And indeed, Russia’s oil production increased to the point that it became the second largest exporter behind Saudi Arabia. But Russia’s prospects of being a key player in the oil market in the long run are dim. Russia ranks seventh in proven oil reserves, holding only 5%. Its oil production peaked around 1999 and its reserves have been steadily declining since. That means that at current production rates, Russia will be out of the running by 2020.
Washington's search for reliable oil suppliers outside the Middle East has brought about an oil boom in many African countries like Angola, Nigeria, Guinea and Chad. But like Russia, Africa is hardly a bonanza. Its total reserves amount to 7% and its largest producer, Nigeria, will peak by the end of the decade. Africa will be out of the running by 2025.

Because reserves in non-Middle East countries are being depleted more rapidly than those of Middle East producers, their overall reserves-to-production ratio -- an indicator of how long proven reserves would last at current production rates -- is much lower (about 15 years for non-Middle East and 80 years for Middle East producers). If production continues at today's rate, many of the largest producers in 2002, such as Russia, Mexico, U.S., Norway, China and Brazil will cease to be relevant players in the oil market in less than two decades. At that point, the Middle East will be the only major reservoir of abundant crude oil. In fact, Middle Eastern producers will have a much bigger piece of the pie than ever before.

<table align="center" border="0" cellpadding="2" cellspacing="0" width="225"> <tbody><tr> <td align="center" width="225"></td> </tr> <tr><td class="black8">Based on projection of 2002 production levels, BP Statistical Review of World Energy</td></tr> </tbody></table>
Projecting 2001 production levels, by 2020 83% of global oil reserves will be controlled by Middle Eastern regimes.

The energy security and national security concerns that stem from reliance on a single energy resource that is unevenly distributed throughout the world will be intensified as demand for oil grows. The result will probably be:

• A handful of Middle East suppliers will regain the influence they had in the 1970s and once again be able to dictate the terms on world oil markets and manipulate oil prices and world politics.
• Middle Eastern producers will continue to use their oil revenues to increase their military expenditures, fuel an arms race and undermine regional stability.
• Corrupt, oppressive regimes will continue to use oil revenues as a means to maintain their power.
• Wealth generated by oil rich Middle Eastern countries will continue to flow into terrorist organizations and organizations promoting radical Islam.
• The U.S. will need to keep increasing American military presence in the region to ensure our access to the remaining oil. This will mean further U.S. embroilment in Middle East conflicts, more anti-American sentiment, and a deepening rift between the West and the Islamic world.
• Tension between the U.S. and China due to growing Chinese intervention in the Middle East to ensure its own access to oil and Chinese arming of Middle Eastern countries hostile to the U.S. and its allies.
• Further drain on economic resources caused by imports of expensive oil.

Such an international system is not sustainable.

It is in our best interest to preemptively embark on a revolutionary change that will lead us away from oil dependency rather than drag our feet and suffer the ramifications of becoming growingly dependent on a diminishing resource.

 

http://www.marketwatch.com/news/sto...x?guid={BA07A1FB-2A01-484B-852C-948CD491D7F7}

China's oil reserve build-up adds to global demand
It plans a stockpile equivalent to 30 days' worth of imports by 2010


By Moming Zhou, MarketWatch
Last update: 6:40 p.m. EDT March 11, 2008


AN FRANCISCO (MarketWatch) -- China's plans to build its strategic petroleum reserves to at least 100 million barrels by 2010 could add more pressure to crude prices which have already been at record highs. The world's second-largest oil consumer already has built two underground storage reserves in east China and will put into use two more storage bases soon, a senior Chinese official said over the weekend, according to China's official Xinhua news agency.
"Although China is not the only source of rising oil prices, it has consumed the largest share of the global increase in oil demand in the last seven years," said Donald Straszheim, chairman of Straszheim Global Advisors and an expert on Asian economies. "Building reserves will of course add more pressure on global oil prices."


China's goal is to build strategic oil reserves equivalent to 30 days of imported oil by 2010, says China's top economic planning administration. That's about 100 million barrels based on China's current import level and about 120 million in 2010 based on estimated growth rates.
China's move followed similar steps in the United States, the world's top oil consumer. By 2010, China's reserve amount will still be only about one seventh of the U.S. level, but China is likely to increase its reserves at a faster pace, thus adds more impact on world's oil demand, analysts said.
Oil reserves are often built in a period of tens of years with a slow pace to avoid rattling the oil market. The United States, which has the world's biggest reserve, started its crude storage in 1975.
China's reserve-building could add one more pressure to oil prices, which have moved sharply higher on global supply concerns, the weak dollar and increased investment flows. On Tuesday, the benchmark oil futures contract surged to a new high of $109.72 a barrel on the New York Mercantile Exchange. It has rallied more than $20 in one month. See Futures Movers.
Increasing reserves
China is nearing completion of the two new strategic oil reserve bases, said Zhao Guobao, vice minister of the National Development and Reform Commission, the country's top economic planning body.
The bases are located in northeast China's Liaoning province and east China's Shandong province, Zhang said on Saturday, according to Xinhua. The oil-reserve bases located in east China's Zhejiang province are in operation, he added.
By the year 2010, China will have strategic oil reserves equivalent to 30 days of imported oil, Xinhua reported, quoting NDRC. China currently imports about 3.5 million barrels a day of oil, or about half of its total consumption, according to U.S. Energy Information Administration.
How much China's move will push up oil prices depends on the pace it accumulates reserves, said James Williams, an economist at WTRG Economics, an energy research firm.
Assuming China's imports will increase by 5% a year, a percentage that is in line with current estimates, imports will nearly reach 4 million barrels a day by 2010, Williams said. A reserve level of 30 days of imports would total 120 million barrels.
It's unclear how much oil China has stocked in its existing bases. But since the country is just in the first steps of building reserves, China will likely need to buy 100 million barrels in two years to reach the 120 million barrels level in 2010, Williams said. That's about 140,000 barrels a day, or 2% of China's current consumption. The percentage isn't small compared to some estimates that put China's growth in total oil demand at around 6%.
"I don't view it as anything earthshaking, but it does have an impact on the market," said Williams.
Zhang's statements were seen as unusual. China seldom reveals details about its oil reserves, which it started building in 2004. Oil demand from China, whose economy grew more than 11% in 2007, has increasingly raised international concerns.
But over the long run, it's good for the rest of world that China has reserves, analysts said. Without such stockpiles, China is more likely to bid up oil prices if there is a global supply disruption.
Rising demand
While the U.S. economy is lingering on the brink of a recession, China' gross domestic product is estimated to maintain its rapid 10% pace in 2008. Its oil demand is offsetting weaker increases in developed countries.
The Paris-based International Energy Agency Tuesday cut its global oil-product demand forecast, citing reduced demand in the U.S. and Europe. But the agency said demand from China will remain strong.
Weaker growth among Organization of Economic Cooperation and Development countries "stands against still-robust projections for GDP growth in China and the Middle East, the key oil demand growth centers," IEA said in a recent report.
IEA estimated China will increase this year's oil consumption by nearly 6%, while OECD countries' demand will only gain a tiny 0.6%.
Recent snowstorms that devastated half of China's 32 provinces and brought widespread power shortages could also "herald a surge in oil demand for power generation," although "this is likely to be temporary," IEA said in the report.
Coal remains the dominant fuel in China's power generation, but since coal's transportation and production were disrupted during the snowstorms, the country has increasingly resorted to petroleum products to generate electricity.
U.S. takes similar steps
China's move to increase its crude reserves came amid increasing talks in the United States that the Bush administration's strategy to add more oil to the Strategic Petroleum Reserve is pushing oil prices higher.
Crude oil in the reserve rose to 698.7 million barrels in the week ending Feb. 29, or equivalent to more than two months' imports. February's level is about 10 million barrels higher than one year ago and 100 million barrels higher than five years ago.
The U.S. accounts for about a quarter of the world's oil consumption, which stands at around 86 million barrels a day.
Guy Caruso, a senior U.S. energy official, said in Senate testimony last week that the buildup of the strategic reserve is adding four to five cents a gallon to gasoline prices.
But Caruso, an administrator at the Department of Energy's U.S. Energy Information Administration, declined to say whether he thought the current increases in the SPR were a good idea. "I'd have to defer that to my bosses," Caruso said.
U.S. Energy Secretary Samuel Bodman said last week the Bush administration will continue to expand the reserve to its capacity of 727 million barrels.
The pace of U.S. reserve accumulation is much slower than China's. The U.S. increased the SPR in the last week of February by about 20,000 barrels a day, EIA data show.
The increase wouldn't have a "consequential" impact on the price of oil, Bodman said, according to Dow Jones Newswires.
Moming Zhou is a MarketWatch reporter, based in San Francisco.

 

M.....

 

Well thank you for confirming that the only thing thats important is the all mighty dollar and how much they can screw us . .

Lets look at the utility companies and their recent practices of eliminating meter readers through attrition , it's all about boosting profits , sure the initial costs of changing to a electric meter that sends out a signal is going to be high but after a few years and hundreds of guy have retired you now have 1 guy doing the work of dozens . The CEO's want to shove more in their pockets rather than employing thousand of guys walking the neighborhoods reading meters and feeding their families , hell I'm surprised they didn't make a deal with the telephone companies and have the meters read via phone lines all hooked into computers .

How many years have we gone to buy a new appliance and bought a higher priced model because it is more efficient and saves us 10% usage on our electric or gas bill yet the utility companies are constantly raising the price per unit of whatever product they sell without any competition in the market . Hell right now Ameron UE is pushing for a 12% price hike in it's area , so much for that efficient fridge saving me money huh ?

As far as them pricing themselves out of business you're joking right ?

They make a product for which there is almost no alternative at least not yet maybe never completely as a byproduct of their main is the lubricants used to keep machinery going even electric motors bearings need grease after all .

Could we be at "Peak Oil" ?

Sure , an artificial peak that is , the Saudis and OPEC openly say they have reduced their production how can we be certain that domestic suppliers haven't done the same ? It's pretty easy to understand that if you put 8,000 men on a 9,000 man job they can work themselves to death and never make up for the lack of needed workers .

Does the article Colt posted have validity ?

Sure does , no doubt the stupidity of the tree huggers has contributed greatly to the problem . The problem of stripping the oil barons of an excuse that is . Make no mistake even if they opened up ANWAR and found 900 Trillion Barrels of oil we would never see $1.50 a gallon gas again because they know the can F us out of considerably more than that .

Could be that with the fairly recent discovery of Switchgrass'es usefulness 2 years ago there have since been improvements in the refining process of it and the oil companies can see a day where there is a viable alternative that would greatly reduce our dependency of their products .

Do you know that they claim 1 acre of switch grass can supply 1,000 gallons of Ethanol ?

We presently use 88 million barrels of crude oil a day with a 28 gallon per barrel high estimation or 2 billion 4hundred 64 million gallons of gas a day and a low of 20 gallons per barrel or 1 billion 7 hundred 60 million gallons depending on what website you go to and use to figure what they get per barrel .

Between National parks and National Forests our government controls over 248 million acres of land , if we used even 10% of that land for switch grass that is 24 million acres or 24 billion gallons of ethanol or about 10 days worth without touching a single acre used for crops .

A friend of mine told me when he visited Canada they have crops growing as a median for the highways , imagine how many millions more acres we could utilize doing the same with switch grass and our highways ?
What if we utilized state parks and stopped Government incentives that keep people from planting on small plots of ground of a few acres here and there ?

I think the technology is paving the way for an end to our dependence on not just foreign oil but oil period and they know it and are doing every thing they can to boost profits while they can before it's too late after all are the pricks going to admit how badly they F'd the economy when Bush let them have a free hand at it ?

In the end I can't seem to forget just how true an old Gallagher comedy skit was .

The real estate developers all got together and one said "hey guys we need some more Dough and a good Con to get it , Hmm Con Dough , CONDO yea thats the ticket !!!!" .


Condo , Peak Oil all the same BS lying steeling crap .

But Hey it's ok it's all just capitalism the American way right ?

 

Please know that I value your opinion and all that you have contributed to the site on this subject. Heck, where do think I've learn most of what I've come to understand on this subject and other financial matters, here on the Monkey from yourself and other members that have more insight or knowledge than myself. However, some of us peon's think we may something to contribute but are afraid to say or don't know how to put it into text. Guess what, I jumped in with both feet and am trying to tread water.

Maybe I should have just asked these questions in your thread, instead of starting a new one but at the time I thought it might be disrespectful to you and chose not to post in your thread. I do have a way of being very confrontational when it comes to things I feel strongly about and didn't want to disrupt your thread, guess trying to not be disrespectful might have backfired.

 

I can see where the oil companies are already begining to price themselves out of business or at least out of the level of business they have had in the past. Yeah there will be a demand for their product for plastics, lubricants and so on for a VERY long time IMO BUT if we stopped useing oil for our main fuel to power all the vehicles on the road then the demand for their product in relation to the supply would plumit. The price hikes we have already seen have greatly reduced the amount many of us drive to pretty well eliminate pleasure drive, more use of public transportation where available and so on. Many many people have parked the old beasts with big V8s or V10s to get 4 or 6 bangers that burn less gas for the range. Then the big kicker for them comes in the fact that when we had gas prices at $1.00-$1.50 any serious intrest in alternative fuels and hybrids and such was pretty well limited to major enviromentalists, now nearly everyone has at least heard of if not used and is interested in things like hybrids, biodesil, ethanol and so on and the market for alternative fuel sorces is becomeing ripe. Hydrogen fueled cars have been considered for some time but few would bother with R&D on them since gas was so cheap that the market for them would have been to small to show a good return, thats changeing now.

I dont think that the CEOs are by any means trying to keep fuel prices low, if they were they would not be doing their jobs since their duty to shareholders is to maximize profits but I also do recognize that markets, politics and the fact that the oil that one could just scoop up freely in the past is largely gone and new fields are more labor intensive to get out of the ground are all also LARGE factors in the prices being where they are. I dont see the prices going back down in any meaningful way even if supplies became more abundant (like opening up the areas currently off limits) unless and untill alternative fuels become more available simply because they do now know we will pay the current prices. I figure if they are smart (and they tend to be) then they will roll them back somewhat as an appeasment say to $2.00-$2.50 if all the oil was available to them simply to lower intrest in alternatives again and keep demand in place but what business man knowing a person will pay them X for a product would sell it for 25-50%? If any CEO did so in a corperation they would justifiably be fired since they would not be looking after their shareholders best intrests. OTOH they also would not be doing so if they put their prices so high that demand for their product plumited and if oil is no longer used for fuel then demand while still present would indeed plumit.

So while peak oil by simple logic undoubtedly exists, (currently there/near or not) just like for any natural resource where there IS a limit to how fast the earth produces it and if our use of it outpaces that then eventualy there will not be enouph to meet the demand at any price, I think there are many factors beyond us being AT peak oil at this point (which I question somewhat) which are influinceing the cost of oil/gas.

 

Yup and I can not find the article I read pertaining to this. My computer fu must be weak this morning. I'll see if I can find the darn thing, I was amazed at what the oil companies pay to lease for drilling on land or offshore.

 

I was educating a few people on this the other day. It is the market traders that set the price, not the oil companies. Now the oil companies can influence the price but not set it. They are just reaping the rewards for their very "bullish" high competition market.

 

Saudi's find new fields, but will not tap them, they want to leave some for their children.http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?headlineID=5523 Or they could be holing back hoping oil prices skyrocket even more.

 

Wow I thought we are at "Peak Oil" and the demand was at it's highest .

Damn , just makes you wonder who's lying in all this BS the Saudis or the American Oil Companies who are sticking all the extra cash in their pockets ?

They may be a bunch of lowlife scumbag rapists but hey they wouldn't lie to us now would they ?