Oil closes at record High..

[North Shore]

http://preview.tinyurl.com/2aafkg

Opec says that they won't increase production..Can't perhaps? Interesting times a-comin'.

[v6g]

Not quite an all-time high but close ....

http://www.bp.com/liveassets/bp_interne ... k_english/
reports_and_publications/statistical_energy_review_2007/STAGING/
local_assets/downloads/spreadsheets/statistical_review_full_report_workbook_2007.xls - "Oil - crude prices since 1861".

Personally, I think the world is now getting very close to entering the second half of the oil age.

Not sure what's OPEC's reasoning is for this inability to increase production but I'm suspecting it's more geological than political.

* edited to break up the link - always annoys me when it spreads right across the page so you have to scroll

[sanjet]

Money talks, will be the only way to force companies/countries to look at alternate energy. Hopefully this can speed up the research. Just hope it wont kill certain industries in the process.

[goates]

Not sure what's OPEC's reasoning is for this inability to increase production but I'm suspecting it's more geological than political.

Unlike most other oil producing countries, no one really knows what Saudi Arabia, and some of the other OPEC countries, have left. They won't let anyone have a detailed look so there is some questions as to whether they could either increase production by a large amount, or sustain an increase for very long.

The best way to encourage alternative sources of energy will probably be high oil, and thus gasoline, prices.

[v6g]

http://dieoff.org/page140.htm - a good article on the whole topic (particularly about the OPEC reserves) - by a retired senior geologist at BP. Written 10 years ago but still holds truer than ever.

I've done quite a bit of reading on this subject and have come to the unfortunate but very definite conclusion that it's true and will hit within the next decade - probably sooner. I'm so convinced, that I've decided to avoid a career as a pilot (despite having recently completed my CPL) and say goodbye to a lifelong dream. (I wonder if I'm the first???)

When deciding whether "I believed" peak oil or not I tried to find as much info from both sides of the argument. There's masses of books / articles / engineering journals arguing that peak oil is coming up soon (using facts and industry standard mathematical models) but hardly anything debunking the idea. The only discussions that do argue against peak oil seem poorly argued and tend to fall into one of three categories:-
i) "Trust us" - Saudi Arabia's preferred choice
ii) "We'll invent something" - George Bush seems to like this one
and iii) "Jesus will save us" (my personal favorite)

Human civilizations collapse when the most in-demand required resource runs out. Predictions of the second-half of the oil age vary from complete armageddon to just expensive gasoline. I'm not too pessimistic about it, it could offer an improvement in lifestyle for those who are prepared to adapt & understand realities but certain areas of human & industrial endeavors (eg: suburbia, aviation and the people at the bottom end of the economic food chain) will be facing a constant and relentless decline.

Look at how the lives of people in developed nations changed during the last century, it transitioned from car ownership and air travel only for the super-rich, to motorbikes for most, to car ownership for each family then car ownership and cheap air travel for everyone. This century will see the exact opposite.

Enjoy it while you can!

[sanjet]

http://dieoff.org/page140.htm - a good article on the whole topic (particularly about the OPEC reserves) - by a retired senior geologist at BP. Written 10 years ago but still holds truer than ever.

I've done quite a bit of reading on this subject and have come to the unfortunate but very definite conclusion that it's true and will hit within the next decade - probably sooner. I'm so convinced, that I've decided to avoid a career as a pilot (despite having recently completed my CPL) and say goodbye to a lifelong dream. (I wonder if I'm the first???)

When deciding whether "I believed" peak oil or not I tried to find as much info from both sides of the argument. There's masses of books / articles / engineering journals arguing that peak oil is coming up soon (using facts and industry standard mathematical models) but hardly anything debunking the idea. The only discussions that do argue against peak oil seem poorly argued and tend to fall into one of three categories:-
i) "Trust us" - Saudi Arabia's preferred choice
ii) "We'll invent something" - George Bush seems to like this one
and iii) "Jesus will save us" (my personal favorite)

Human civilizations collapse when the most in-demand required resource runs out. Predictions of the second-half of the oil age vary from complete armageddon to just expensive gasoline. I'm not too pessimistic about it, it could offer an improvement in lifestyle for those who are prepared to adapt & understand realities but certain areas of human & industrial endeavors (eg: suburbia, aviation and the people at the bottom end of the economic food chain) will be facing a constant and relentless decline.

Look at how the lives of people in developed nations changed during the last century, it transitioned from car ownership and air travel only for the super-rich, to motorbikes for most, to car ownership for each family then car ownership and cheap air travel for everyone. This century will see the exact opposite.

Enjoy it while you can!

Sounds interesting, but how about this, what if all of a sudden a new technology comes out in years which eliminates the need for an internal combustion engines in ground transports? It is quite possible with the way technology is progressing. That would eliminate at least 66% of the current daily oil demand all of a sudden...

[v6g]

Sounds interesting, but how about this, what if all of a sudden a new technology comes out in years which eliminates the need for an internal combustion engines in ground transports? It is quite possible with the way technology is progressing. That would eliminate at least 66% of the current daily oil demand all of a sudden...

- true. Our two safest bets for future energy supply look like nuclear fission & fusion.

Fission - currently the only sensible alternative to fossil fuels. With the recent growth in demand, the proven & probable reserves of uranium oxide are growing rapidly. Canada & Australia have the largest reserves although a project in Japan has been able to extract uranium oxide from sea water in very low concentrations (but there's a heck of a lot of it about eh!).

Fusion - actually might not be too far away - probably the closest we'll ever come to "We'll invent something".

All the waffle about wind farms, solar cells, hydrogen & ethanol ... the numbers just don't add up on an efficient industrial scale sufficient to feed the world economy.

Currently, there doesn't seem to be anything even near to being 'close' as far as an alternative fuel for aviation is concerned. At least nothing efficient & cheap.

[sanjet]

Aviation only accounts to around 1-2% of fuel comsumption. Would be great if we can eliminate that 66% consumption from cars.

[v6g]

Absolutely! If you eliminated all car journeys of under 3 miles, you'd probably save enough oil to keep aviation going for centuries. Unfortunately, free market forces don't act that way.

[sanjet]

That's why it's probably good to have high fuel prices in the short term, IMHO. Only short term I hope though

[Alex YCV]

Just a reminder when thinking about the price of oil. The price is expressed in US dollars. The Canadian adjusted price is a little different than all that while the Americans have seen a threefold increase in crude oil prices since 2003 - 2004, canadians have only seen a doubling. Now, double still sucks, but the strong Canadian dollar versus the weak US dollar has kept things better for us mostly.

If you take today's $1.00 pump price for regular unleaded (montreal), we could be looking at something more than $1.40 or higher without the improved exchange rate.

Downside? When the currencies start to go the other direction, Canada will see significant increases in the cost of fuel even if the oil market doesn't move.

[v6g]

That's why it's probably good to have high fuel prices in the short term, IMHO. Only short term I hope though Confused

That's why I'm an advocate of increasing taxes on gasoline. It's the only way to reduce demand and encourage more efficient use of resources whilst channeling extra money into research instead of dividends to shareholders of oil companies.

(sound of can of worms just opening)

A more fair price for a barrel of oil is about $300-$500.

Why? Well.... Economists have always believed that economic growth was tied to increases in the efficiency of labour. For example, the farmer buys a tractor to plough his field instead of using 10 men with oxes. The output of the farm increases by using 1 man (driving the tractor) instead of 10 and the economy grows. This model works for most of history - I saw a graph of this once (Increases in efficiency of labour vs. Economic growth) and the trend followed generally (there were a few discrepancies around the world wars and the 1970's but it was a pretty good fit).

However, back in the 1980's some guys (the sort with lots of letters after their names) looked again at this model and thought about the bits that DIDN'T match up - the random bumps now and then. They considered the effect that energy supply had on the world economy. The found that when they plotted global economic growth from the 1850's (when records began) until the present day against global oil production it gave a perfect match. Even the seemingly random bumps matched. Or in other words, global economic growth for the last 160 years is tied directly to global oil production.

So the next question they asked was, "So how much economic growth do you get out of 1 barrel of oil?". The answer was $300-$500.

[sanjet]

I think increasing the tax on oil will only hurt the respective country as other country with less tax can and will use more oil if their oil is cheaper with less tax. The best way is to have global high oil prices on the market.

[Dust Devil]

there is nothing wrong with oil

[mellow_pilot]

http://preview.tinyurl.com/2aafkg

Opec says that they won't increase production..Can't perhaps? Interesting times a-comin'.

Supply low, demand high... Price high...

Why would they increase production?!?!? They're making money hand over fist and that fist contains the world's collective balls!

I don't see the mystery here.

[Alex YCV]

http://preview.tinyurl.com/2aafkg

Opec says that they won't increase production..Can't perhaps? Interesting times a-comin'.

Supply low, demand high... Price high...

Why would they increase production?!?!? They're making money hand over fist and that fist contains the world's collective balls!

I don't see the mystery here.

Most of the oil producing nations leaders are smart enough to know if the price gets too high, then the affordability of alternates to oil kicks in. When the price goes up like it has, it also encourages companies to tap into oil fields that might have been too expensive to develop in the past.

The last thing they want is to drop the "balls". So at some point, they will relent and produce more oil. I wouldn't be shocked to see the US go all hell bent to try to up production out of Iraq.

[mellow_pilot]

I disagree, if demand for oil were elastic, then I would concede the point. As it is, demand does not really change with a change in price, planes still fly, cars still drive, and China still expands like mad. Oil is not going to be replaced any time soon. Regardless of alternative energy, oil will still be needed for production of many materials. It will always be needed. I really don't see what OPEC has to lose. The alternatives are coming anyway.

[Dick]

Here is a thought, what does OPEC have to gain by keeping production down and prices high. Remember, they have had the abiltily to do this at any time throughout oil producing history.
By keeping prices high, they open the door to new energy technology, and other forms of competition, such as the oil sands. How do you get rid of the competition? Produce more cheap oil...unless you cannot. That is where the peak oil theory comes in. If they could increase production, they would.
There should be interesting times ahead. Remember, peak oil means production capability, not price. I believe $90 oil is just the beginning...

[Alex YCV]

I disagree, if demand for oil were elastic, then I would concede the point. As it is, demand does not really change with a change in price, planes still fly, cars still drive, and China still expands like mad. Oil is not going to be replaced any time soon. Regardless of alternative energy, oil will still be needed for production of many materials. It will always be needed. I really don't see what OPEC has to lose. The alternatives are coming anyway.

The idea of alternatives is that, say, you can produce a hydrogen based engine (like a number of companies already have done) but the costs to operate it is $0.20 per mile. When gas costs $1 and everyone gets 20 MPG, the costs for a car are $0.05 per mile, so nobody even considered the hydrogen car. When gas gets to $4 per gallon, the costs are suddenly the same, and it looks like gas could end up much higher. So then the push is made towards the lower cost alternatives.

fuel oil rules the world because it has almost always been the cheapest and easiest way to do things. When it stops being the low cost product, alternates will come into the game.

It is getting very close to the tipping point on this one.

[North Shore]

$91.15 this morning...anyone want to start a pool on $100 or $150?

[v6g]

Some bedtime listening - http://www.davidstrahan.com/audio/rober ... .10.07.mp3

[THEICEMAN]

This is very interesting subject which i'm studying at University.

You must all keep in mind that there are two different markets.
+The crude oil market
+Refined product market
That is why, if you have noticed, prices at the pump are rarely consistent with the price of crude oil in the short run. Last summer, at least in Quebec, crude oil was priced at around 75$/barrel & the price at the pump was 1,20$ a liter. Today it's 90$/barrel & 1$ a liter
Although there can be a shortage in crude oil, which can inflate its price, there can also be a surplus in refined product!

To explain what's going on right now!

Winter season is coming up and most energy companies are buying a lot of crude oil, thus inflating the price of oil. This will create a surplus in refined product. Last year, in the U.S, the price of crude oil was dropping inconsistently with the price at the pump due to a shortage in refined products.
You will see in the next 6 months, the price crude oil will slip to 60=70$ per barrel.

Insecurity/uncertainty also plays a big role within the energy markets......something as simple as, oil workers being killed by Nigerian rebels can also inflate the price of oil in the short run. it tends to stabilize in the long run.

Hope this helps 11

[sanjet]

Might be sooner then we think:

http://money.cnn.com/galleries/2007/aut ... index.html

[Legacy]

Personally, I think the world is now getting very close to entering the second half of the oil age.

In fact we have been past peak production for quite some time.

[Legacy]

Unlike most other oil producing countries, no one really knows what Saudi Arabia, and some of the other OPEC countries, have left. They won't let anyone have a detailed look so there is some questions as to whether they could either increase production by a large amount, or sustain an increase for very long.

There have been ex pats that have found out the truth in the past. They are no longer with us anymore.