Oil at $300

[GRG55]

Re: Oil at $300

agree 100% on the extremism but big oil doesn't leave oil in the ground for no reason. or are you a fan of peak oil as conspiracy theory?

"curiosly" (sic) is answered by "The only thing missing is the political will to give up global imperialism and remove the umbilical cord from the military-industrial complex. "

so us oil output peaked in the early 1970s because the military-industrial complex had a plan to invade iraq 30 years later in order to keep up the war materials biz?

man, those guys sure are clever.

the facts, if you're interested, are right here.

We are drilling the hell out of the Bakken on the Canadian side of the border. Have been for several years. Here is just one of dozens and dozens of recent articles about it in the Canadian press.

Bakken Formation: Will it fuel Canada's oil industry?
Last Updated: Friday, June 27, 2008 | 4:47 PM ET
By Jerry Langton CBC News

...Price estimated in 1999 that the Bakken contained between 271 and 503 billion barrels of petroleum, with 413 billion barrels the most likely amount.

That compares with 125 billion barrels at the massive Ghawar field in Saudi Arabia, 7.8 billion at Alberta's Pembina Cardium and 21.4 billion for the entire U.S. reserves, not including the Bakken...

...The problem is that the oil available in the Bakken, however much there may be, is encased in sheets of non-porous shale. Traditional drilling methods yield little usable oil compared to the expense required to retrieve it...

...He agrees with Schneider that the USGS keeps upping its estimates as oil prices affect how much of the oil can be recovered economically.

"I'm sure we'll see bigger numbers as we go along," he said. "If oil stays at $120 a barrel, you'll see one number; if it goes back to $60, you'll see another and if it goes to $300, you'll see yet another."

As for the total amount of oil down there, he won't hazard a guess, but he did note that when Price estimated between 271 billion and 503 billion barrels, he didn't include Canada, because he didn't expect to find any oil that far north. The fact that Saskatchewan is already producing five million barrels a year indicates that Price may have underestimated the amount by a significant amount.

"About 25 per cent of the Bakken is in Saskatchewan," said Schneider. "So it stands to reason that 25 per cent of the oil is too."...

..."You hear numbers like 413 billion barrels and instantly think that it's more than there is in Saudi Arabia," Bardin said. "But at this point, you're comparing apples to oranges, because all the oil in Saudi Arabia is easy to get out of the ground."

He does concede that as technology develops, more and more of the Bakken will become recoverable; and that as oil prices rise, technology tends to develop more quickly.

And many Canadians, who have seen the meteoric rise of production from the oil sands as petroleum prices have risen, know that if the oil is in there, then someone will find a way to get it.

By the way, one of the largest players in the Pembina Cardium [another Canadian light oil field mentioned in the article] is Mega's favourite oil company...Penn West.

[jimmygu3]

Re: Oil at $300

EJ writes in:

The dollar since 1971 has acted as a global oil price subsidy for the US and its allies.

Had the international gold standard not been unilaterally dissolved by the US in the early 1970s, how many units of labor would a unit of oil cost today?

That is the reversion to the mean we are seeing.

According to the data, oil is currently greatly outpacing incomes. If a mean reversion is due it is for oil to fall or incomes to rise. Or perhaps we're experiencing a paradigm shift to a new era.

Jimmy

[EJ]

Re: Oil at $300

Thank you. Exactly my point. There is no mean oil price nor mean income level. A new higher equilibrium level for incomes and oil prices will be reached. How?

If you travel, consider how citizens of other nations cope with high oil prices relative to income:

1. They own fewer cars
2. They own smaller cars
3. They drive less
4. They live in smaller homes and apartments
5. They do not hear or cool them intensively

Not the end of the world.

[Jim Nickerson]

Re: Oil at $300

We are drilling the hell out of the Bakken on the Canadian side of the border. Have been for several years. Here is just one of dozens and dozens of recent articles about it in the Canadian press.

Bakken Formation: Will it fuel Canada's oil industry?
Last Updated: Friday, June 27, 2008 | 4:47 PM ET
By Jerry Langton CBC News

...Price estimated in 1999 that the Bakken contained between 271 and 503 billion barrels of petroleum, with 413 billion barrels the most likely amount.

That compares with 125 billion barrels at the massive Ghawar field in Saudi Arabia, 7.8 billion at Alberta's Pembina Cardium and 21.4 billion for the entire U.S. reserves, not including the Bakken...

...The problem is that the oil available in the Bakken, however much there may be, is encased in sheets of non-porous shale. Traditional drilling methods yield little usable oil compared to the expense required to retrieve it...

...He agrees with Schneider that the USGS keeps upping its estimates as oil prices affect how much of the oil can be recovered economically.

"I'm sure we'll see bigger numbers as we go along," he said. "If oil stays at $120 a barrel, you'll see one number; if it goes back to $60, you'll see another and if it goes to $300, you'll see yet another."

As for the total amount of oil down there, he won't hazard a guess, but he did note that when Price estimated between 271 billion and 503 billion barrels, he didn't include Canada, because he didn't expect to find any oil that far north. The fact that Saskatchewan is already producing five million barrels a year indicates that Price may have underestimated the amount by a significant amount.

"About 25 per cent of the Bakken is in Saskatchewan," said Schneider. "So it stands to reason that 25 per cent of the oil is too."...

..."You hear numbers like 413 billion barrels and instantly think that it's more than there is in Saudi Arabia," Bardin said. "But at this point, you're comparing apples to oranges, because all the oil in Saudi Arabia is easy to get out of the ground."

He does concede that as technology develops, more and more of the Bakken will become recoverable; and that as oil prices rise, technology tends to develop more quickly.

And many Canadians, who have seen the meteoric rise of production from the oil sands as petroleum prices have risen, know that if the oil is in there, then someone will find a way to get it.

By the way, one of the largest players in the Pembina Cardium [another Canadian light oil field mentioned in the article] is Mega's favourite oil company...Penn West.

If the Canadians can get oil out of this field, Bakken, why can't the USA?

[c1ue]

Re: Oil at $300

1. They own fewer cars
2. They own smaller cars
3. They drive less
4. They live in smaller homes and apartments
5. They do not hear or cool them intensively

Full agreement - it is just that it takes decades to convert from a McMansion/gas guzzling SUV/soccer mom/Wal-Mart model to a say, Amsterdam/Tokyo model.

I again repeat that conversion of the present American suburban lifestyle into a European/Japanese oil consumption lifestyle will take far too long and cause immense pain in the process. How in the meantime will people make a living?

While I'm not a believer whatsoever in government - unfortunately it may well be that a coercive government is the only way this conversion can occur without a mass impoverishment of 85% of the population.

WW II did see a significant harnessing of American productivity into a concentrated aim; I am completely unconvinced that something similar can occur anytime soon.

America in WWII was coming out of more than a decade of economic suffering - America today has so far only experienced 1 or 2 years, and started out much wealthier.

[Master Shake]

Re: Oil at $300

[/list]While I'm not a believer whatsoever in government - unfortunately it may well be that a coercive government is the only way this conversion can occur without a mass impoverishment of 85% of the population.

WW II did see a significant harnessing of American productivity into a concentrated aim; I am completely unconvinced that something similar can occur anytime soon.

America in WWII was coming out of more than a decade of economic suffering - America today has so far only experienced 1 or 2 years, and started out much wealthier.

Oil and gas exploration, pipeline building, and nuke plant and refinery construction will provide lots of good paying jobs to America's working class.

[Chris Coles]

Re: Oil at $300

I feel like I am sitting in on a conversation between horse owners when the horseless carriage came into existence. Breed more horses seems to be the way out of the problem. Buy hay futures, farm more land as hay fields...... That is not the solution.

The price of oil is the last thing to worry about, it is in the past. The answer is not oil, or any form of alternative liquid such as Methanol. Neither is the answer to be found in Hydrogen.

In the short term, the only answer is hardship, then change; as EJ shows, everyone has to knuckle down and change their lifestyle. The second stage will be electric cars powered by nuclear generated electricity.

Nuclear is the only viable medium term solution. You can buy an electric car today. Something you could not do sensibly, even a decade ago.

But the final solution is going to be something completely new, not thought of as significant. Magnetism.

http://www.rexresearch.com/minato/minato.htm

For now, the oil price is determined by speculation, driven by a desperation to reduce the losses made in the recent past creating and using Vapour Ware to drive a wave of money to underpin M&A. The price will continue to rise until the speculators lose their nerve; and they cannot afford to lose their nerve. This is a classic sheep thing. They all run to one side of the field as everyone else is running in the same direction. No one dares to be the first to stop running.

When they do stop, as they will have to sometime, they will undoubtedly all fall into a heap blaming everyone but themselves for the mess they are in.

There is nothing to do about the price of oil but wait. Personally, I will not be surprised if it gets to $500 before it tops out. Why?

Watch this space.... Sea levels are going to rise much faster than anyone even thought possible. The ice melt is accelerating much much faster than anyone imagined, even two years ago.

The first is a very long article from February's Scientific American which I suggest you go to print out and sit down and read

http://www.sciam.com/article.cfm?id=the-unquiet-ice


The rest are even more recent articles. The primary concern is that, if sea levels suddenly rise, say, an inch; from that moment, if you are within 200 feet of mean sea level you will not be able to sell your house to anyone as the cat will be well and truly out of the bag. I have recently seen a map of England as seven islands. The moment the sea rises above the normal, all hell will let loose and your house, business, city; all of it will be worthless. THAT is what concerns me. Not the price of oil, but the consequences of using so much of it!

This is last month, yes, mid winter in Antarctica an ice shelf believed to be holding back one of the largest land based ice sheets lost 600 hundred square miles..

http://www.sciam.com/article.cfm?id=even-the-antarctic-winter

This is a report of a water lake on Greenland suddenly disappearing. In so doing lubricating the ice sheet base and it moved. Yes, a whole ice sheet weighing trillions of tons, moved. Now use your loaf of bread, (head to those not familiar with rhyming slang), if a trillion tons of ice sitting on a slope start to move, how do you bring it to a stop?

http://www.sciam.com/article.cfm?id=greenland-ice-sheet-speeding-to-sea

More on the break up of the Antarctic ice shelf.

http://www.sciam.com/article.cfm?id=polar-ice-shelf-break

This from last week in the Independent.

http://www.independent.co.uk/environment/climate-change/exclusive-no-ice-at-the-north-pole-855406.html

In my opinion, NOTHING is more important. You could have this all happening within the next couple of years. Forget about the price of oil, if you are near sea level, cut your losses and move.

If sea levels suddenly come up by 100 feet, you will not be able to buy oil at any price as it will not be there to buy.

[c1ue]

Re: Oil at $300

Oil and gas exploration, pipeline building, and nuke plant and refinery construction will provide lots of good paying jobs to America's working class.

GRG - what's the likelihood of this happening?

Nuclear power plant construction requires specialized training and licensing. I don't see that changing anytime soon - nor would I want the common shovel stander types building nuclear power plants.

Oil and gas exploration is a very specialized business; I'm not sure millions of jobs are obtainable through this.

Refinery construction? Again, pretty sure most of the work is fairly skilled.

Pipeline building is one which could use lots of manpower - there is skill needed but also lots of warm bodies. But I don't think we need pipelines here in the continental US so much.

WPA II type jobs would be building bridges, roads, and whatnot using shovels instead of machinery. Pay? food. Unfortunately food for pay doesn't pay off the mortgages nor return borrowed money to the banks.

As a contrast, the railroad era saw the importation of foreign workers (Chinese).

From a pure cost perspective, today it would probably be cheaper to let all of the illegal Central and South American immigrants do this work, but of course politically American employment is needed.

[GRG55]

Re: Oil at $300

GRG - what's the likelihood of this happening?

Nuclear power plant construction requires specialized training and licensing. I don't see that changing anytime soon - nor would I want the common shovel stander types building nuclear power plants.

Oil and gas exploration is a very specialized business; I'm not sure millions of jobs are obtainable through this.

Refinery construction? Again, pretty sure most of the work is fairly skilled.

Pipeline building is one which could use lots of manpower - there is skill needed but also lots of warm bodies. But I don't think we need pipelines here in the continental US so much.

WPA II type jobs would be building bridges, roads, and whatnot using shovels instead of machinery. Pay? food. Unfortunately food for pay doesn't pay off the mortgages nor return borrowed money to the banks.

As a contrast, the railroad era saw the importation of foreign workers (Chinese).

From a pure cost perspective, today it would probably be cheaper to let all of the illegal Central and South American immigrants do this work, but of course politically American employment is needed.

• Much of a nuclear plant is typical industrial skills like pressure vessel welding, etc. The reactor just generates the heat to make the steam; the rest of the plant is pretty much like a coal fired plant...steam turbines driving generators, and all the auxiliary equipment around that.
• Oil and gas exploration expansion? Well the Chinese have their Forbidden City, and the USA has the "forbidden areas"...forbidden to oil and gas exploration, and likely to remain politically off limits listening to the Prez candidates.
• Pipelines? Well don't need too much new pipeline capacity if there's limited domestic exploration and there's no oilproductiongoin'up. Most pipeline work in the Lower 48 is age related replacement, or looping projects to deal with various local bottlenecks. There will be some interesting offshore underwater pipelines in the Gulf of Mexico as the deepwater development accelerates though.
• Refineries? Enough said...
• I think you are correct; it will be more civil infrastructure like bridges, rapid transit, road upgrades,

[nitroglycol]

Re: Oil at $300

Conservation is the ONLY thing we can use to affect change IMMEDIATELY. Increased drilling takes literal decades to effect market prices in any meaningful way.

Well, solar and wind can be deployed very quickly as well, but conservation will have to be an important part of any energy strategy for the forseeable future.

I'm actually a lot more favourably disposed towards nuclear than I used to be. Sure, some kinds of nuclear waste take tens of thousands of years to decay to a safe level, but CO2 in the atmosphere takes tens of millions of years to sequester. However, there is another huge drawback:

The time frame needed for formalities, planning and building of a new nuclear power generation plant is in the range of 20 to 30 years in the western democracies. In other words: It is an illusion to build new nuclear power plants in a short time.

Or so these people say. Obviously, they have an axe to grind, and I seem to recall other people saying it would be 10 or 15 years, but given that conservation can be implemented immediately, and solar and wind can be deployed quite quickly, new nuclear plants might not be the best way to invest your resources.

The issue of grid stability with solar and wind power is a legitimate one, though some people think it won't be an issue once you have enough generation capacity hooked into the grid:

It's a bit like having a bunch of hamsters generating your power, each in a separate cage with a treadmill. At any given time, some hamsters will be sleeping or eating and some will be running on their treadmill. If you have only one hamster, the treadmill is either turning or it isn't, so the power's either on or off. With two hamsters, the odds are better that one will be on a treadmill at any given point in time and your chances of running, say, your blender, go up. Get enough hamsters together and the odds are pretty good that at least a few will always be on the treadmill, cranking out the kilowatts.

The combined output of all the hamsters will vary, depending on how many are on treadmills at any one time, but there will be a certain level of power that is always being generated, even as different hamsters hop on or off their individual treadmills. That's the reliable baseload power.

The connected wind farms would operate the same way.

'The idea is that, while wind speed could be calm at a given location, it could be gusty at others. By linking these locations together we can smooth out the differences and substantially improve the overall performance,' Archer said.

I suspect if solar were added to the mix it would work even better. And in grids with a large amount of hydroelectric capacity, the dams double as energy storage devices. Maybe, though, in places with little or no hydroelectric capacity, there's more need to build nuclear plants.

[Master Shake]

Re: Oil at $300

I feel like I am sitting in on a conversation between horse owners when the horseless carriage came into existence. Breed more horses seems to be the way out of the problem. Buy hay futures, farm more land as hay fields...... That is not the solution.

Paradigms collapsing!

Watch this space.... Sea levels are going to rise much faster than anyone even thought possible. The ice melt is accelerating much much faster than anyone imagined, even two years ago.

The first is a very long article from February's Scientific American which I suggest you go to print out and sit down and read

http://www.sciam.com/article.cfm?id=the-unquiet-ice

Ice shelves melting! Sea levels rising!

The rest are even more recent articles. The primary concern is that, if sea levels suddenly rise, say, an inch; from that moment, if you are within 200 feet of mean sea level you will not be able to sell your house to anyone as the cat will be well and truly out of the bag. I have recently seen a map of England as seven islands. The moment the sea rises above the normal, all hell will let loose and your house, business, city; all of it will be worthless. THAT is what concerns me. Not the price of oil, but the consequences of using so much of it!

In my opinion, NOTHING is more important. You could have this all happening within the next couple of years. Forget about the price of oil, if you are near sea level, cut your losses and move.

If sea levels suddenly come up by 100 feet, you will not be able to buy oil at any price as it will not be there to buy.

The end of life as we know it!

This sounds like a job for...................










Anthropogenic global warming: The Piltdown Man of our time.

[Master Shake]

Re: Oil at $300

From a pure cost perspective, today it would probably be cheaper to let all of the illegal Central and South American immigrants do this work, but of course politically American employment is needed.

Your disdain for your culture and fellow citizens is duly noted (assuming you are an American citizen, that is).

[raja]

Re: Oil at $300

If you travel, consider how citizens of other nations cope with high oil prices relative to income:

1. They own fewer cars
2. They own smaller cars
3. They drive less
4. They live in smaller homes and apartments
5. They do not hear or cool them intensively

Not the end of the world.

Not the end of the world . . . unless you add in:

1) The $480 trillion "ticking time bomb" of derivatives

2) Diminished reserves and increased competition for other vital commodities upon which our civilization depends

3) Credit/mortgage crisis

4) Failure to Deliver threat

5) Economic problems resulting from climate change

6) Loss of reserve currency status, collapsing dollar and possibility of hyperinflation

7) Reduction in our standard of living due to growing competiion with less developed countries (they're going up, and we're going down)

8) $9 Trillion national debt

Yes, expensive oil may not be the end of the world . . . but it may be just one of many other factors working together that lead us into a global eonomic shock of stagering proportions.

I found my way to iTulip after seeing the PBS Frontline show on the Asian crisis. As I watched these guys with PhD's saying we narrowly averted a global economic meltdown, I realized how fragile the financial world was, and that I needed to educate myself to protect my future financial well-being.

Sorry to be the voice of doom here . . . but I think we need to pay attention to the big picture . . . .

[c1ue]

Re: Oil at $300

Your disdain for your culture and fellow citizens is duly noted (assuming you are an American citizen, that is).

MS,

You mistake me - I don't disdain my fellow Americans in general. While many of them have been stupid and continue to be stupid, it is simultaneously difficult to both intellectually resist mainstream beliefs as well as spend the extra effort to truly understand how manipulation by government and corporations is being accomplished.

I merely point out that from a rentier perspective - not that I am one - there are more factors at play than the prosperity of the fellow American (or human).

If you research back in my early iTulip days, you'll note one of my recurring themes then was how offshoring/outsourcing can be understood to be a corporation disintermediating the local American economy - both private and government - in favor of lower taxes as well as more corporate profit.

Specifically I complained that there was precious little research on how exactly a given $ in pay for an American manufacturing job impacts the overall economy as opposed to how offshoring manufacturing jobs means cheaper cheap crap. It is still interesting to me that there is no decent analysis on how losing an American job specifically contrasts with gain on cheaper merchandise.

I'm not anti-trade, however, I do think there is too much 'faith' in the 'free market' and not enough data.

[Chris Coles]

Re: Oil at $300

Paradigms collapsing!




Ice shelves melting! Sea levels rising!





The end of life as we know it!

This sounds like a job for...................










Anthropogenic global warming: The Piltdown Man of our time.

Master Shake, (Is that Master as in youngster, meaning young master Shake?)

regardless of your age, you have only read the headlines. If you sit down and read all of the news on the subject you will discover that:

Ten years ago the probable outcome, North Pole free of ice, was a thousand years into the future.

Five years ago, the timescale was down to about a century.

Three years ago, the authors of a report suggesting that the North Pole was going to be free of ice by 2025 were themselves accused of hyperbole.

So what?

NASA has just informed us that the North Pole is expected to be ice free by this September. That for the first time in human history, you could sail a boat to the North Pole. Not in a thousand years, nor a hundred years, nor sixteen years but simply two months from now.

What I am saying is that those scientists worrying about the latest ice shelf collapse during mid winter in Antarctica are worrying, not about melting ice, but the quite reasonable suggestion that ice can also slide into the sea if it is on a slope and has a liquid layer at the base. Last year NASA announced that all the ice in Antarctica is afloat. At the time, a great many thought they were talking about the ice already afloat in the sea. they were not, they were talking about the ice on the slopes, above sea level.

The disappearing ice shelves were acting as a barrier to the potential for the sliding to start. One of the biggest sloping ice sheets is held back by the ice shelf that has just a small area left and of which the last piece of it is expected to disappear very soon.

You can laugh all you wish, but I am saying, from a forward looking perspective, you may not have much time left before hyperbole turns into reality.

Please, think about that.