Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Sat May 15, 2004 3:27 am Post subject: Strategic Petroleum Reserve-why bother
Hello everyone, I am new to this message board, but not exactly new to the "peak oil" issue. I believe that the phenomenon is real, I can find absolutely no good arguments against it. One question comes to mind, though,, I hope we can come up with some possible answers.
If we are beginning to feel the effects of peaking-why is the (U.S.) government bothering to fill up the strategic reserve? This oil supply would be less than peanuts as far as offsetting a permanent and ever-worsening shortage. So, why bother? To give the American sheeple a false sense of security against what the media reports merely as OPEC jerking us around? To offset supply problems until they get the extra pumping capacity of Iraq online? Of course, once Iraq can no longer pick up the slack, we're still screwed, which brings us back to square one-why bother?
Posted: Sat May 15, 2004 8:58 pm Post subject: Yeah
More War-sounds like a winner. I wonder where. Iran, Saudi, Syria, Caspian against Russia. Do those monkeys Bush and Cheney think war is going to help anything at this point? Of course, there are the kickbacks(campaign donations, and personal connections of Bush and Cheny) from the energy and defnse industries to provide incentive. Who knows what else.
Joined: Apr 06, 2004 Posts: 257 Location: Sydney, Australia
Posted: Sat May 15, 2004 11:03 pm Post subject:
If the US is filling its reserve I have no faith in economists who reckon oil will be back down to the early 30's next year. If the US govt. is that stupid I'll eat my shorts. Perhaps they know the price is never coming down?
It's not called the "Strategic Oil Reserve" for nothing but what is the strategy? China has one too and has been forced to start using for its economy: link
Joined: Apr 04, 2004 Posts: 579 Location: Western US
Posted: Sun May 16, 2004 1:09 am Post subject:
The US is indeed filling theirs to 100%, about 6 weeks ago it was at 93%. I've looked to see how close it is to 100% recently and couldn't find any info.
This was part of what knocked me off of the fence. If Bush finds it so important to top of the reservoir instead of putting the oil into the economy he must indeed expect hard times ahead. Klinton (I hated him, sorry... eh, I hate em all) Tapped into the reserves in the 90's to pay off Fed debt and stabilize fuel prices.
Bush and Cheney are topping off the Reserve to help their friends in the oil industry by keeping prices high. I don't know if this really is the case, but it's just as plausible as stashing oil for conducting war.
If you want to ascribe more positive motivations to the Bush administration, maybe they know that permanent high prices will set in, and they want to use the Reserve to reduce panic during the transition period. I think whether or not the oil peak is a mere problem or a catastrophe depends a lot on how people react to shortages, so managing public reaction should be an important part of forming policy for the transition period.
Personally, I don't doubt that the war preparation theory is plausible. I just want to throw out some other possibilities to consider so that we don't jump to conclusions.
I don't think it's war, and I don't think it's just to enrich Texas oilmen. It's for emergency use. Saudi Arabia provides a huge chunk of the world's oil, and many analysts believe they are vulnerable. Either to a terrorist attack that knocks them offline for weeks or months, or to civil unrest that overthrows the royal family (and probably replaces them with Islamicists who hate the U.S.). The strategic oil reserve is to tide us over in such emergencies.
China has also set up a strategic oil reserve, and I don't think they are planning to go to war or want to enrich Dubya's buddies. They are just being prudent. China also has massive grain stores, set aside against famine. Feeding their huge population has always been a problem for China. They couldn't always feed everyone even when their population was just 200 million. (One of the characters for "food" also means "rebellion.")
They are feeding their 1.3 billion population now. But to do it, they use more than twice the world average of fertilizer per acre. Fertilizer is made from oil. So I think we can expect them to continue to hoard oil, the way they hoard grain - as insurance for bad times.
Posted: Sun May 23, 2004 2:17 pm Post subject: A Note
US strategic reserves amount to around 45 - 60 days of oil consumption in America. This small amount has little or nothing to do with oil prices one way or the other.
Originally conceived after the OPEC embargo, it's little more than a psychological tool, and represents no real security.
Drop in the bucket... _________________ "When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours." - Stephen F Roberts.
All OECD countries are requiered to have strategic oil reserves. Not all are filling up right now, here in europe many are actually releasing reserves to decrease prices on local market. It's just govermental decision... no need to look for conspiracy or war-preparation theories. If you expect price to increase then it's logical to fill tanks, if you expect price to decrease, you could release oil..
Posted: Sat Jun 05, 2004 12:17 pm Post subject: SPR is a bluff
You've got the essence of it, 3 months of oil won't do anything once production seriously heads south. It's useful as a hedge against short-term disruptions by terrorists. But as a practical matter, the only real use would be to wage war - it could run military machinery for a protracted period.
The war won't be with Russia or countries in the middle east. We've just proven that we can flatten pretty much anyone that gets in our way in the ME, and Russia just isn't worth the risk because their reserves are much lower and their stockpile of nukes is a considerable deterent. No, the war, if it comes, will be with the other major consumer nation that still has plenty of military might and the will to use it - China. ME countries will be like the referee at a WWF match - trying to stay out of the way so they don't get crushed! The EU will just fall back into the 18th century. I pray none of this happens.
Joined: Apr 10, 2004 Posts: 143 Location: Tulsa OK
Posted: Sat Jun 05, 2004 1:08 pm Post subject:
3 months of oil won't do the private sector any good but how long would it last the police and military while marshal law is put into effect and the sources of domestic production are nationalized (FEMA)? The U.S. can't produce enough oil to feed its economy but the domestic production if used by "police" forces could last a long time.
Joined: May 19, 2004 Posts: 892 Location: San Francisco, California
Posted: Wed Dec 29, 2004 4:56 pm Post subject:
At what rate can the SPR be drawn from? That is, if there were a shortfall to make up, how much of a shortfall could be covered, and how long would the reserve last?
BTW, the SPR currently holds about 673.6 million barrels. Add to that 295.1 million barrels of crude oil in the regular reserve and you have ~1 billion barrels.
The U.S. is currently producing about 5.4 million barrels a day. The nation consumes about 20.5 million barrels a day. So we consume ~15 million barrels a day more than we produce.
Here's the worst case scenario: if all imports and exports were stopped tomorrow and for some bizarre reason (bizarre because -- let's face it, people would be totally freaking out), no demand destruction occurred, existing reserves would last a little more than two months. But that's not how PO is going to happen.
Here's how I imagine it happening. If you watch the weekly EIA report, the "gross production" number will be fairly predictable from month to month and year to year. That number has already peaked and is in irreversible long term decline. What is still rising, however, is the "gross imports" number. At some point, that number peaks because of supply. We won't realize it has peaked until we have a few months retrospect. However, since we (peakers) saw it coming, we'll be quicker than those who saw the US-48 peak in hindsight back in the early 70s. It'll probably take us a few months to figure out whether it is a long term trend or just a blip. But at some point there will be a medium-long term shortfall in supply. Then, the following happens:
Shortfall causes price rise.
Price rise causes recession.
Recession causes reduction in demand (after delay).
Reduction in causes price reduction.
Price reduction allows increase in demand (after delay).
If there were no SPR, this pattern would repeat itself for years -- a long, bumpy slide. With SPR releases, the bumpy slide is turned into a plateau followed by a cliff. However, George W. Bush, with his laissez faire tendencies, will delay releasing petroleum from the SPR until there's no choice politically. Therefore, the first few post-peak years could very well resemble the description above.
Posted: Wed Dec 29, 2004 6:26 pm Post subject: Re: SPR is a bluff
Doctor Doom wrote:
The EU will just fall back into the 18th century.
I don't think it will turn out like that. Too bad, I'd get on a wooden ship and sail back! Those people knew how to live in that world because it was handed to them by earlier generations. They had a knowledge base for 18th century functioning. We don't. And this get us to the really scary part. We don't have a knowledge base for the world that's coming either. Just a little hint from the seventies is all the knowledge we have. What we are is like a climber stuck on a ledge - can't go back down and can't climb higher.
The SPR is not as full as people think it is. After the hurricanes a few million barrels were released from the SPR.
However according to the DOE the level of the SPR did not change. This is due to some creative bookkeeping. The oil was presented as a loan. The refineries loaned the oil from the SPR and promised to return it later.
It is impossible to know how much of the SPR are paper barrels but it is certain that part of it is just a pile of IOU's.
About the usefulness of the SPR: It is unimaginable that the entire oil supply to the US will disappear overnight. However it is imaginable, that part of the imports temporarily become unavailable. In the case of a successful terrorist attack in SA, the SPR can cover the shortfall in imports and can do so for a very long time.
Another problem is a shortfall in finished products. The US has not built a new refinery since the 70's. Roughly a quarter of the oil imports are refined products. If these refined products are unavailable then the SPR can do absolutely nothing. The refineries in the US are working at 96% continuously and would not be able to convert the oil fast enough. This winter we came very close to that situation with the heating oil supply.
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