Subject: Conservative Republican - Peak Oil is Here
Posted by: Pancho Villa
- Sustainer [533817] Sat, Mar 19, 2005, 18:50
While many cheer the bandaid approach of drilling in ANWR, conservative Maryland representative and scientist Roscoe Bartlett, goes into painful detail about Peak Oil, and the crisis that is imminent.
What is the current U.S. status? We have only 2 percent, between 2 and 3 percent, not really known for certain, but approximately 2 percent of the known reserves of oil. We use 25 percent of the world's oil. By the way, we have about 8 percent of the world production. What that means is if we have only 2 percent of the reserves and 8 percent of the production, that means we are real good at pumping oil, does it not? That means we are pumping our reserves at roughly four times faster than the rest of the world. That means that this 2 percent will not stay 2 percent by and by because we are so good at pumping oil, we are going to be down to 1 percent of the known reserves in the world and we will still be using about 25 percent of the world's oil. We are now importing about two-thirds of that. At the Arab oil embargo we imported about one-third of that. So we are now importing, relatively, two times more oil, actual quantity much more than that, but relatively about two times more oil.
What now? Where do we go now? One observer, Matt Savinar, who has thoroughly researched the options, and this is not the most optimistic assessment, by the way, but may be somewhat realistic, he starts out by saying, Dear Readers, civilization as we know it is coming to an end soon. I hope not. This is not the wacky proclamation of a doomsday cult, apocalypse Bible sect or conspiracy theory society. Rather, it is a scientific conclusion of the best-paid, most widely respected geologists, physicists and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by the phenomenon known as global peak oil.
Why should they be terrified? Why should they be terrified just because we have reached the peak of oil production? Last year, China used about 30 percent more oil. India now is demanding more oil. As a matter of fact, China now is the second largest importer of oil in the world. They have passed Japan. When you look at how important oil is to our economy, you can understand the big concern if, in fact, we cannot produce oil any faster than we are producing it now and there are increasing demands, as there will be, for oil. In our country, for instance, we have a debt that we must service. It will be essentially impossible to service that debt if our economy does not continue to grow. So there are enormous potential consequences, which is why he says that these people are absolutely terrified by the phenomenon known as peak oil.
As a matter of fact, the people that were talking about this until very recently have been quickly relegated to the lunatic fringe. If I had been up here 3 or 4 years ago talking about this, someone may want to relegate the two of us this evening to the lunatic fringe.
Unfortunately, our country is currently in a NASCAR mindset. We simply can't continue to drive 500 miles in a circle at 200mph and expect the situation to correct itself. Our leadrs must insist on immediate action, and Bush's energy policy doesn't even begin to address the magnitude of the problem. In the words of Rep. Bartlett:
The impact and the consequences are going to be enormously greater than the impact and the consequences of Social Security or Medicare or those two put together.
Only the 50 most recent replies are currently shown. Click on this text to display hidden posts as well. [Lengthy or complex threads may require a slight delay before updating.]
336
Madman
ID: 230542010 Thu, Aug 14, 2008, 09:43
But conservatives don't have to accept that global warming is a fact in order to start doing things which make for a better stewardship of the planet--a hallmark of conservativism for decades. Talk to Al Gore ... he's the one driving to speeches in a fleet of gas guzzling Lincoln Towncars.
Nowadays conservatives are too busy saying what they are against than what they are for.
I'm *for* personal responsibility. National energy strategies should be limited to very occassionally smoothing transitions and education with a very limited additional role for basic research. I'm *for* the conservation measures taken by the American people over the last 6 months. The market response, although painful, has been quite effective. I'm *for* homeowners in PA/NY putting in geothermal, and car owners in AR buying hybrids.
I'm also *for* national security and *for* humanity. I'm *for* environmentalism, but only insofar as they don't conflict with those goals. This is why one reason why I'm *for* developing our own energy reserves. A national energy plan designed around austerity rather than development empowers oil rich nations who hold less noble goals, including Russia, Venezuela, etc.
Any negative statement made by conservatives could be rephrased as a positive one. The statement that "I'm against exploiting our strategic reserves for short-term political gain" can be rephrased as "I'm *for* retaining our strategic reserves for true emergencies and *for* politicians willing to put their country before themselves."
337
Seattle Zen Leader
ID: 055343019 Thu, Aug 14, 2008, 10:44
Madman, nice floor exercise in the Semantics Olympics.
I'm glad you are for the market response to the massive increase in gasoline prices. People drove less for the first time in almost 30 years. This sort of "conservation" is, of course, not sustainable. First, driving less is like holding your breath, you can hold off for just a little bit. There has been no significant change in our infrastructure. And with the prices coming down, there goes the incentive to change the infrastructure and the only incentive people had to drive less. But you are against doing anything that would make a fundamental change such as keeping the price of gas up through taxes or massive transportation changes. Being *for* market responses is nothing more than saying you are *against* doing ANYTHING. You may be *for* homeowners putting in geothermal or car buyers going hybrid, you are *against* ANYTHING that would give an incentive to encourage more people to join them.
You may be *for* a neo-conservative notion of national security, but you certainly are NOT *for* humanity. As the global climate changes rapidly, many places in the world will flood, displacing millions in places like Bangladesh. Other places will become desert, causing strife in places like Darfur. Inhabited islands in the ocean will sink below the rising water. You may have his displaced notion that burning oil and coal at ever increasing rates is being *for* American humanity as it increases our GDP, but that's because you have the dim, archaic view that our economy can not and should not ever be encouraged to change. Every single businessman should be left alone to create power to fuel his business, emit whatever you want, just create jobs. Detroit builds big gas wasting cars, that must be encouraged because that is what we want. You are *against* even suggesting the market may be slow to respond to change and that a national policy may have helped prevent this with CAFE standards.
Any negative statement made by conservatives could be rephrased as a positive one.
Here's one that cannot be rephrased. "The short sighted laise fair energy policies of the last 28 years have bitten us in the ass".
338
boikin
ID: 532592112 Thu, Aug 14, 2008, 11:12
Other places will become desert, causing strife in places like Darfur. to bad the sudan has been a desert longer than 5 years. nice way to confuse the situation.
Detroit builds big gas wasting cars, that must be encouraged because that is what we want. you say this then post in the Marijuana thread arguing for less regulation, so sometimes you are for what we want and sometimes you are not?
Every single businessman should be left alone to create power to fuel his business, emit whatever you want, just create jobs. fine you disagree with this, fine. But you will probably be the first one upset when lack of employment causes misery. we can not have it all, the question you have to ask is do you want misery now or misery later.
"The short sighted laise fair energy policies of the last 28 years have bitten us in the ass". ?????
339
Pancho Villa
ID: 47161721 Thu, Aug 14, 2008, 11:18
While Republicans were grandstanding about Congress adjourning without voting on a Drill Now, Drill Everywhere platform, Democrats should have been castigating Republicans for their own brand of obstructionism.
It was only five days earlier, July 30, that the Senate was voting for the eighth time in the past year on a broad, vitally important bill - S. 3335 - that would have extended the investment tax credits for installing solar energy and the production tax credits for building wind turbines and other energy-efficiency systems. Both the wind and solar industries depend on these credits - which expire in December - to scale their businesses and become competitive with coal, oil and natural gas. Unlike offshore drilling, these credits could have an immediate impact on America's energy profile.
The fact that Congress has failed eight times to renew them is largely because of a hard core of Republican senators who either don't want to give Democrats such a victory in an election year or simply don't believe in renewable energy. What impact does this have? In the solar industry today there is a rush to finish any project that would be up and running by Dec. 31 - when the credits expire - and most everything beyond that is now on hold. Consider the Solana concentrated solar power plant, 70 miles southwest of Phoenix in McCain's home state. It is the biggest proposed concentrating solar energy project ever. The farsighted local utility is ready to buy its power. But because of the Senate's refusal to extend the solar tax credits, ''we cannot get our bank financing,'' said Fred Morse, a senior adviser for the American operations of Abengoa Solar, which is building the project. ''Without the credits, the numbers don't work.'' Some 2,000 construction jobs are on hold. Roger Efird is president of Suntech America, a major Chinese-owned solar panel maker that actually wants to build a new factory in America. They've been scouting the country for sites and several governors have been courting them. But Efird told me that when the solar credits failed to pass the Senate, his boss told him: ''Don't set up any more meetings with governors. It makes absolutely no sense to do this if we don't have stability in the incentive programs.'' One of the biggest canards peddled by Big Oil is that, ''Sure, we'll need wind and solar energy, but it's just not cost effective yet.'' They've been saying that for 30 years. What these tax credits are designed to do is to stimulate investments by many players in solar and wind so these technologies can quickly move down the learning curve and become competitive with coal and oil, which is why some people are trying to block them. As Richard K. Lester, an energy-innovation expert at MIT, notes, ''The best chance we have - perhaps the only chance'' of addressing the combined challenges of energy supply and demand, climate change and energy security ''is to accelerate the introduction of new technologies for energy supply and use and deploy them on a very large scale.''
340
Boldwin
ID: 176322815 Thu, Aug 14, 2008, 14:55
The factory isn't even built yet. Why I bet it would take ten years for that energy to come online.
341
boikin
ID: 532592112 Thu, Aug 14, 2008, 15:12
My only question is why are they planning solar energy plant that requires tax credits to be feasible? why not invest in research that will make them feasible without tax credits. I am all in favor of tax credits for alternative energy, but you should not be counting on them make your project feasible. It is just like the big development in town that relied on tax credits get funding then the market changes and they go under because they had to many exceptions to make the numbers work. so you end up with vacant blocks.
342
sarge33rd
ID: 99331714 Thu, Aug 14, 2008, 15:30
like the tax abatements given to manufacturers when they build their plant in YOUR town? Tax incentives, are how the govt can support initiatives into new technologies. Initial investment requirements are obscene, expansion is prohibitive and the raw cost until the useage is commonplace makes it cost-prohibitive to the consumer. Tax incentives, reduce all of those costs and allow for a new technology to establish a foothold. Sometimes, taxes get used for good things. This would be one of those 'sometimes' and one of those "things".
343
boikin
ID: 532592112 Thu, Aug 14, 2008, 15:36
like the tax abatements given to manufacturers when they build their plant in YOUR town? i am surprise that you would say this sarge given you hate for corporate greed. In general i am against towns giving business tax breaks to move there, it unfair to the companies that moved there with out the breaks and secondly that is so often the case these are first companies to leave town when offered a better deal in some other town.
Tax incentives, reduce all of those costs and allow for a new technology to establish a foothold. new technologies should be able to stand on there own, we do not drive cars because car was given a tax breaks, we do not us the PC because it was given a tax breaks.
344
sarge33rd
ID: 99331714 Thu, Aug 14, 2008, 15:44
I use that as an ongoing example of how tax breaks are used. I perosnally, AM opposed to giving ABC Corp tax abatements in CA for closing down their MI plant and building a new one in CA.
Seeing as how energy is a national concern with ties to national infrastructure, I see it as in the feds best interest to see if technologies which are clean, renewable and independent of foreign sources can be introduced. The potential ROI is massive!
345
Madman
ID: 230542010 Thu, Aug 14, 2008, 15:44
The short sighted laise fair energy policies of the last 28 years have bitten us in the ass
Care to provide evidence that our government's involvement in energy has been "laize faire"? From defense department subisdization of oil, to construction of highway infrastructure, to urban-sprawl planning (including CAFE standards), to summer gasoline mixture requirements, to limits on refinery capacity, to the banning of various nuclear options, to billions spent on alternative energy research, to uncountably large intervention in electricity production and distribution, there is no facet of our energy market that government has left untouched.
I'm not arguing for or against those, simply arguing that your simplistic laisez-faire-bad perspective is absolutely irrelevant to our current energy situation. And I am definitely arguing that slothful government regulation and legislation presents the largest obstacle to overcome when considering a change in our energy consumption. I trust the consumers to change their buying habits. And a 3% reduction is gasoline demand is definitely sustainable (although I suspect it will bounce up a bit for the near-term future as gas prices wane). Who knows, we may decide to fill up our tires a bit better and drive more. But I don't trust the government to change to a policy that will be better for the US.
346
boikin
ID: 532592112 Thu, Aug 14, 2008, 15:58
The potential ROI is massive! if true there is no need for tax breaks.
347
biliruben
ID: 38751812 Thu, Aug 14, 2008, 16:09
That return isn't completely measured in dollars. Some of that return is in the societal benefits such as cleaner air, cleaner water, and stronger, safer, diplomatic ties through less reliance on foreign oil.
None of that ends up in the bottom line of the energy company investing in new technologies, but it sure ends up in the bottom line of our societal balance sheet, so perhaps we should subsidize for our direct benefit.
There is also a not-insubstantial risk involved in new technologies, and many companies these days seem to stick to sure things. Subsidies can tip the balance towards taking the risk.
348
Pancho Villa
ID: 47161721 Thu, Aug 14, 2008, 16:13
The factory isn't even built yet. Why I bet it would take ten years for that energy to come online.
Fortunately, Phoenix and Tuscon won't need electricity in 10 years, and those 2,000 construction workers don't need jobs now, since the Phoenix housing market is booming (cough*).
349
sarge33rd
ID: 99331714 Thu, Aug 14, 2008, 16:15
Even taking into accouont, only the dollars and cents....
whatever the number is, which the tax breaks would amount to in terms of dollars and cents; use that as your Federal Investment figure for purpose of determining a direct ROI.
Now, what are the dollar amounts saved via cleaner air and water? Less cleanup needed, fewer national health issues, etc etc. Add that to the return.
Decreased dependence on foreign oil, means fewer imports of oil. A reduction in the trade deficit. Add that to the return.
Taxes paid by that supplier, both during and after the incentives. Add those to the return.
Hopw many jobs created? Income tax paid by those workers. The economic stimulus form those workers daily spending. Add those to the return.
Alternative energy is a matter of national need, security and urgency. A temporary extension of tax incentives to boost that along, is clearly in our national best interest.
350
Boxman
ID: 571114225 Tue, Aug 26, 2008, 07:46
Even The Mere Threat Of Drilling Will Bring Down The Price Of Oil By DON M. CHANCE | Posted Monday, August 25, 2008 4:20 PM PT
One of the most contentious issues of late has been the question of whether increased drilling for oil would reduce the price of oil today.
Certainly increased drilling will not bring an immediate increase in the supply of oil. But many people, even so-called experts, believe that the effect on the pump price would not be felt until the oil is actually at the pump, possibly years later.
In fact, the price will fall well before the first hole is drilled. Even the possibility of increased drilling will bring down the price of oil. It already has.
Almost everyone knows that supply and demand determine price in a market. But that knowledge seldom goes beyond understanding how supply and demand themselves are determined.
The belief that the current quantities demanded and supplied are the sole determinants of price misses an important point. Both current and expected future demand and supply interact to determine the quantity demanded and supplied in the current marketplace.
That is true because oil, and indeed almost everything else, is storable.
When a quantity is storable, the amount a producer will supply and a consumer will demand is not independent of future expectations.
Take the case of Robinson Crusoe, an example used in some economic texts. Crusoe is a simple case because he is both the supplier and the demander.
Stranded on an island with some corn, he might consume all of it in the first year if he expects to be saved in the second. If he does not expect to be saved in the second year, he will consume some of the corn and use the rest as seed corn.
His consumption might also be affected by other factors. If he feels weak, he might consume more today; if he feels strong, he might consume less. Crusoe will hardly ignore his expectations when deciding how much to plant and eat.
Thus, the current price of any storable commodity will be affected by expectations of future supply because producers use those expectations to determine when to bring their product to market.
Oil is an excellent example because it has a long storage life. Every drop of oil consumed is on the market for only a small fraction of the millions of years of its life.
Oil is also inexpensive to store. Futures prices suggest a cost of less than one-half percent a month, a portion of which is the financing cost.
If producers expect increased supply in the future, the incentive to bring oil to market later is reduced.
If storable commodities are affected by expectations of future prices, we might think that nonstorable commodities would be unaffected by expectations. That is true only more or less in theory, because in practice virtually all commodities are storable.
Even a highly perishable product like fresh fish is nonstorable only at the final stage of production, the step between being caught and cooked. Fish are, of course, stored in the water, but producers determine the rate of catch. If world governments declare a moratorium on tilapia fishing to start later, the expectation is of a decreased supply of fresh tilapia.
Even in that case producers will increase the current catch and consumers will increase their current demand, knowing that tilapia will be off the menu soon. Frozen tilapia might even become a reasonable substitute, thereby increasing the effective storage life of the commodity.
Electricity also appears to be essentially a nonstorable commodity, it being consumed almost immediately after being produced. But the production of electricity requires the storage of raw materials.
In short, a pure nonstorable commodity is virtually an academic construct. While some commodities have limited storability, most are storable in some form and therefore are affected by expectations.
One so-called expert has argued that the recent failure of an energy trading firm is what actually brought down oil prices of late. Energy trading firms are intermediaries between producers and retailers and trade contracts for current and future delivery of energy, thereby facilitating risk transfer.
To argue that the failure of one firm in this competitive market would reduce prices would be like arguing that the failure of an insurance company would lower insurance premiums. And if we believe that the failure of an energy trading firm would reduce prices, markets would have to be terribly slow to take several weeks to fully absorb that information into the price.
Expectations that are unrealized will cause a reversal of the initial price impact. If intentions are not backed by actual drilling, prices will rise. The market will tolerate a period of discussion, but if the drilling naysayers win the debate, prices will head up and sharply. The rise and fall of oil prices are likely to mirror this debate.
Speaker Nancy Pelosi is arguably the most powerful woman in America. But if she wants to see her real power, she should bring the drilling issue to a vote. Only a Fed chairman could have so much impact on market prices.
Chance is a professor of finance at Louisiana State University.
351
Perm Dude
ID: 497322512 Tue, Aug 26, 2008, 16:24
We didn't get into this problem because of US drilling policies, and we won't drill our way our of it. Pulling expensive oil out of offshore wells in ten or so years (assuming the wells pan out) in lieu of less expensive oil from elsewhere doesn't seem likely to help, particularly since oil is a globally-traded commodity. There is no evidence that the seven-month global supply that offshore drilling might produce in 10-20 years will be refined and sold in the United States.
That is true because oil, and indeed almost everything else, is storable. Except that it isn't.
A more likely explanation as to the high price of oil is that a record amount of oil is being exported from the US right now. Another reason to get off of it. How about reducing oil consumption by 25% or more in the next ten years, making offshore drilling moot?
Yet the two most prominent political champions of offshore drilling -- Sarah Palin and Michael Steele -- appear not to have uttered a word about the incident.
355
Pancho Villa
ID: 29118157 Fri, Apr 30, 2010, 09:19
Palin and Steele probably sold their BP stock, something I should have done.
The Left Behind
ID: 66232012 Tue, Sep 07, 2010, 10:31
$4 gas prices now would pretty much clean off the carcass in our country. Maybe Obama better deliver a serious energy policy and implement it and not cave in to the environmentalists or the oil companies.
359
The Left Behind
ID: 66232012 Mon, Sep 13, 2010, 13:26
While having lunch with a friend he dropped a bomb on me about what to do to have oil prices drop like a stone. Eliminate speculation in the futures market by requiring 10% delivery of oil contracts purchased.
360
biliruben
ID: 16105237 Mon, Sep 13, 2010, 17:40
You think there is a bubble in the spot price of oil due to futures speculation?
What do you do for a living again?
361
Boldwin
ID: 46881217 Mon, Sep 13, 2010, 20:57
That was the story the last time it went thru the roof.
The Left Behind
ID: 66232012 Tue, Sep 14, 2010, 12:35
Do you deny the ability of futures market speculation to inflate the price of its underlying asset?
365
biliruben
ID: 358252515 Tue, Sep 14, 2010, 12:44
It might influence short-term volatility to fleece rubes with more money than sense. Present company excluded, of course.
366
Perm Dude
ID: 5510572522 Tue, Sep 14, 2010, 12:46
I think you're about six weeks behind the times, TLB. Obama signed legislation to end oil speculation when he signed the Wall Street reform bill back in July.
367
The Left Behind
ID: 66232012 Tue, Sep 14, 2010, 12:58
It took an oil man leaving the White House for it to happen.
369
The Left Behind
ID: 66232012 Tue, Sep 14, 2010, 13:21
Obama certainly is on the right track when curbing oil speculation. He needs to go farther and end it. Lower oil prices is a very large spending cut for us at home. Oil speculation costs us 300 billion per year
371
Boldwin
ID: 4289140 Tue, Sep 14, 2010, 17:16
I dunno about ending it outright.
I have no problem with SouthWest Airlines gambling right and locking in great fuel prices during the great run-up. I have a bigger problem with Soros' insider moves and ability to talk the prices where he wants them to go.
372
The Left Behind
ID: 66232012 Wed, Sep 15, 2010, 13:01
I should have been more specific Boldwin. Companies with legit direct business interests such as those involved in transportation should be permitted to hedge futures contracts. The pure traders and speculators must be shown the door.
373
Building 7 Leader
ID: 171572711 Wed, Sep 15, 2010, 17:10
Yes, but Goldman-Sucks does that a lot. Which means they would have to get permission from the government to do it. Which means they would have to give permission from themselves to do it. Which means nobody is going to stop them from doing it.
374
The Left Behind
ID: 66232012 Fri, Sep 17, 2010, 12:57
373 would be funny if it was not true. So will Blankfein be Treasury Secretary in 2012 or 2016? Goldmann has the revolving door at treasury pretty well occupied. If Blankfein has paid his taxes he will be disqualified from the job based on past precedent with this administration.
375
Boldwin
ID: 510591420 Thu, Dec 18, 2014, 12:03
There is a secondary oil boom no one talks about. There are a LOT of small independent investors no one hears about buying old 'used up' oil wells, fracking them back to life...how long their new lease on life, I have no idea. For some reason the majors have no interest [far as I can tell] in this new segment of the oil industry. Perhaps the small guys are more efficient. Maybe the small guys are the only ones willing to fight over the scraps.
In fact there is another wrinkle. When fracked oil wells run out they are 'refracking' them! Doesn't sound like the solution to solve energy shortages for a millenium, but...
Just forget everything you have ever heard about peak oil. If that was ever a 'thing' it won't be one in your lifetime. We have the opposite ATM...an oil glut. 8]
This has been a fun thread. I am thrilled and relieved, upon reviewing it, that I never fell for the 'Peak Oil' meme. Nice to see some Astade involvement way back when.
Of interest to me is the current confluence of events.
The Russian economy is very much a one trick pony. Oil. The ruble is crashing as we speak 12/17/14.
Putin is not the sort of person who responds to sanctions and pressure pliantly.
'The Caliphate' is a one trick pony. When governments can't feed their people wars tend to start. Not ever sharia ruled country is as vulnerable as every other, but most will be in major trouble with their incomes slashed in half.
China has a shadow banking system that is crumbling ATM.
I'm reading the book, 'The Death of Money' written by the guy the CIA tapped to design a system to detect threat information in market movements and to head off monetary cyberwars. That is China's battlefield of choice.
China has been hoarding by far the lion's share of the world's gold production for years.
China and Russia have been dumping USA treasuries for quite a while. A tremendous volume of T-bill dumping is being routed thru Belgium to keep the story from getting out and the price from tanking.
Keep that stuff in the back of your mind as you read the news.
Central planning always screws things up. Because it throws the signals off that markets rely on to maintain their sanity.
Because normally rational savings vehicles like a savings account at a bank offer insanely low returns, savers have been induced to chase after riskier investments. Remember junk bonds? Their BAAaack!
What better place to put your money but in high return bonds to finance undercapitalized wildcat frackers? What with that price of oil seemingly on an ever-climbing sky's-the-limit stairway, what's to worry?
Jump ahead to the times of oil glut. Today the daily production exceeds demand by millions and millions of barrels of oil. Saudi Arabia couldn't price enforce if they wanted to at these over-production levels and the Saudis have been very clear they have no intention of price enforcing this time. In fact they hope the price goes way down temporarily and bankrupts all those undercapitalized wildcat frackers.
Today there is actually talk about $20 a barrel oil! All us consumers get a temporary bailout at the gas pump.
I am not predicting $20 a barrel. I don't want or hope that it does. I meant that serious people are discussing it possibly going to that. I thot my wording accomplished that.
Serious people are throwing the number around so it's not a frivolous idea. I read 100 times as much as I link to and I am not always going to dig thru everything I've read in the last three days to find it and to source it if it isn't the point I'm making, but I do find it interesting offhand.
And I'm not buying anyone's prediction unless they detail the actual daily world demand vs supply. I know just two countries that already have 1 million a day plus each, daily oversupply. And then they better explain who is going to cut production.
Until demand equals supply the market is gonna be in 'price discovery' ie freefall.