Don’t worry, just a little bump - $70 is just around the corner. Short traders just keep making those margin calls, mortgage the house if you have to. Fortunes await you! PO is for pansies and doomers. At $70 short some more ..... it is going back to $22 .... the world is awash with oil ........ reality has nothing to do with it, its all in those charts!!!!!!!!!!
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Sun Apr 27, 2008 2:59 pm Post subject: Re: It’s a myth that the world’s oil is running out
For the umpteenth time: peak oil is about a shortage of plentiful cheap oil, not oil in general. Let me put it another way; oil is our whore and we like it fast and cheap. If it's cheap, but not fast enough, no good. If it's fast, but too expensive, still no good. That's our economy in a nutshell. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Sun Apr 27, 2008 5:52 pm Post subject: Re: It’s a myth that the world’s oil is running out
Dreamtwister wrote:
Would you spend $130 to get $120 worth of oil out of the ground? That's why there's no incentive to find more. We (generally) already know where the oil is located. The problem is that even at $120/bbl, a lot of that oil is not cost effective to extract.
$120 is not the extraction cost for a barrel of oil. If there was only enough oil to supply half the worlds needs, that oil would be extremely expensive. All of a sudden, people would start taking a second look at those unconventional or hard to reach oil sources that previously made no sense at $10 a barrel prices, but can generate a nice return at $120 a barrel prices. _________________ The oil barrel is half-full.
Joined: Mar 04, 2005 Posts: 2558 Location: New Zealand
Posted: Sun Apr 27, 2008 6:29 pm Post subject: Re: It’s a myth that the world’s oil is running out
DantesPeak wrote:
Shortonoil is right, the problem isn't even the amount of oil underground, but whether it is worthwhile to get.
I don't know how the author of the lead story even came up with his conclusions. Even the most pessimistic here don't say the world is running out of oil. Where in the world could there have been a poll which says most people think the world is running of oil?
Nowhere. The article is spam, and to even discuss a falsely presented subject is spam. I'm just contributing here because there are new people at PO.com that want to find the truth.
No your statement is not quite right; it's not spam. The truth is perhaps illustrated by the points made in this article:
Crude Oil Hits $119- Ways to Profit From Peak Oil
Quote:
Crude oil rose to a record $119.90 a barrel on the New York Mercantile Exchange yesterday, as the greenback dropped to an all-time low against the European euro. Crude oil is up 24% so far this year, and 88% from this time last year, Bloomberg News reported . With this unrelenting march, it's no wonder that industry observers continue to roll out ever-higher target prices for the "black gold." If we're only considering economic factors, the steep crude prices now being predicted would be unlikely to stick for any protracted period; there are huge new oil sources of oil that become economically profitable once oil rises above $100 per barrel. The Orinoco tar sands in Venezuela and the Athabasca tar sands in Canada - each of which contains larger oil reserves than the entire Middle East are viable even at $50 per barrel (Orinoco holds an estimated 1.8 trillion barrels and Athabasca 1.7 trillion barrels, versus a current Middle East estimate of 1.6 trillion barrels).
Then there's Colorado oil shale - also containing at least 1.5 trillion barrels of reserves - that becomes economically viable at about $100.
The bottom line: If oil prices stayed at $180 to $200 per barrel for more than a year or two, huge new oil supplies would come on line, causing crude prices to plummet and tipping the market decisively back towards consumers. The environmental cost of getting really large quantities of oil out of Athabasca and Colorado would be immense, particularly if we attempted to supply the needs of the entire U.S. market from these sources, but at $180 per barrel, I'm confident that the economic necessity would probably trump the environmental problems.
As we said, however, these scenarios consider only economic factors. And as we'll see, there are two additional factors that make this a much-less-straightforward analysis, meaning oil prices could linger at significantly higher prices for a much-longer period than economics alone would justify.
I've labeled these two "wild card" factors as "politics and a paradigm shift." Let's look at each one.
marketoracle _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Posted: Sun Apr 27, 2008 6:52 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan said:
Quote:
This makes no sense at all. With oil at an all time high, there is great incentive to find more oil. When oil is trading at $10 a barrel, thats when there is no incentive to find more.
There are presently 440,000 marginal wells operating in the US. A marginal well is a well that produces 10 barrels or less a day, the average in the US is now 2.2 b/d. Most of these 450,000 wells have water cuts of 98% or better. It is easy to show, using enthalpy equations, that the oil from a well with a 98% water cut is utilizing more energy than it is contributing.
The short of it is, that at $120 per barrel these wells are going broke, and it can be expected that many of them will be shutting down in the near future as oil becomes more expensive. Expect the US to lose at least 500,000 barrels per day of production over the next couple of years if oil prices do not recede.
$s have absolutely nothing to do with energy production, only BTU will get the product out of the ground. If those BTU aren’t there to begin with, all the dollars in the world can not make them.
Graeme said:
Quote:
Then there's Colorado oil shale - also containing at least 1.5 trillion barrels of reserves - that becomes economically viable at about $100.
If you want to believe some snake oil salesmen over the laws of physics be my guest. As P.T. Barnum said, “there is a sucker born every day, just enough to make a living”!
It looks like the P.T. group are in for a good year!
Posted: Sun Apr 27, 2008 6:55 pm Post subject: Re: It’s a myth that the world’s oil is running out
Oy! Where do you start with this thing? Did that read; "god put in the earth"... sounds like one those abiotic oil xtian loonies. And not the "weak abiotic theory" where oil is thought to replenish over eons of time as in the accepted fossil theory.. oh no, that would mean the earth is too old for their stupid ass bible. No, these people believe in the "strong abiotic theory" where oil replenished quickly and then they don't have too think about adult ideas like evolution.
Even Russia is in decline and they invented this theory.
Joined: Oct 23, 2004 Posts: 5410 Location: New Jersey
Posted: Sun Apr 27, 2008 7:09 pm Post subject: Re: It’s a myth that the world’s oil is running out
Quote:
The bottom line: If oil prices stayed at $180 to $200 per barrel for more than a year or two, huge new oil supplies would come on line, causing crude prices to plummet and tipping the market decisively back towards consumers. The environmental cost of getting really large quantities of oil out of Athabasca and Colorado would be immense, particularly if we attempted to supply the needs of the entire U.S. market from these sources, but at $180 per barrel, I'm confident that the economic necessity would probably trump the environmental problems.
'
shortonoil is right - it's all about btu's gained. But suppose oil did go to $200, the price of extracting that oil would rise about equally as fast - since the cost of utilizing tar sand is mostly energy obtained from other sources - such as natural gas. I suppose it's possible that there could be some efficiencies gained so that we could start using low quality oil when oil hits $200 (when, not if). But that leaves another problem - tar sands oil is too low in quality to be used without upgarding - that is mixing it - with higher quality oil. Without higher quality oil to mix in, tar sands oil is worthless for modern transportation.
Posted: Sun Apr 27, 2008 8:58 pm Post subject: Re: It’s a myth that the world’s oil is running out
shortonoil wrote:
The short of it is, that at $120 per barrel these wells are going broke, and it can be expected that many of them will be shutting down in the near future as oil becomes more expensive. Expect the US to lose at least 500,000 barrels per day of production over the next couple of years if oil prices do not recede.
Why is that? If you can't make money when the product you sell doubles in price you are doing something wrong. Are they buying oil on the open market to run their pumps, then pumping out less oil then the pumps use? If so the price of oil doesn't make a hill of beans difference, their business model is broken. _________________ The oil barrel is half-full.
Posted: Sun Apr 27, 2008 9:10 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan said:
Quote:
Why is that? If you can't make money when the product you sell doubles in price you are doing something wrong.
No one did anything wrong, except to expect that oil was an inexhaustible resource. But, if your cost to obtain the product goes up faster than the price you receive for it, you are going broke!
Posted: Sun Apr 27, 2008 9:16 pm Post subject: Re: It’s a myth that the world’s oil is running out
Well, of course there is lots of oil. By any common sense yardstick, when we are using oil by the millions of barrels every day, there is a lot of oil. The problem is that we are using what we know of the reserves much faster than we are finding replacements.
I suspect, that even if oil gets much scarcer, there will be, by any measure, a"a lot of oil". Even if we all end up driving scooters if (when?) oil gets to $300 a barrel, there will be "a lot of oil".
Sooner or later, we'll find some price equilibrium, at which point, due to a combination of demand destruction and exploration profit incentive, the annual amount of crude discovered finally equals the annual amount of consumption. But, it seems we are still below that price point.
Posted: Sun Apr 27, 2008 9:25 pm Post subject: Re: It’s a myth that the world’s oil is running out
shortonoil wrote:
But, if your cost to obtain the product goes up faster than the price you receive for it, you are going broke!That is what is happening to oil~
So at what price would oil have to sell for to make these marginal wells profitable? $130? $140? We should hit that by years end. _________________ The oil barrel is half-full.
Posted: Sun Apr 27, 2008 10:57 pm Post subject: Re: It’s a myth that the world’s oil is running out
tick66 wrote:
I hear this kind of crap all the time especially from the older generations around me telling me that magically old wells seem to be "filling back up again". Where do people get this crap?
Well, Eugene Island block in the GOM if I recall correctly, but its a limited example, and its not being done by an oil fairy, and it sure sounds like even if it was you'd be upset about it anyway, so forget I mentioned it... _________________ Freddy RULZ!
www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits) (or bankers) (or web "experts")
Posted: Sun Apr 27, 2008 11:02 pm Post subject: Re: It’s a myth that the world’s oil is running out
shortonoil wrote:
KillTheHumans said:
Quote:
there is plenty of "black gold" around, we certainly haven't used 50% of it,
What you are overlooking is that only about 5% of the 50 remaining is of any use to us, unless one needs to grease the wheels of their donkey pulled cart.
5%? Thats an amazingly low number....did you calculate it yourself, or are you referencing a PO propaganda piece somewhere that I am not familiar with? _________________ Freddy RULZ!
www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits) (or bankers) (or web "experts")
Posted: Sun Apr 27, 2008 11:11 pm Post subject: Re: It’s a myth that the world’s oil is running out
shortonoil wrote:
There are presently 440,000 marginal wells operating in the US. A marginal well is a well that produces 10 barrels or less a day, the average in the US is now 2.2 b/d. Most of these 450,000 wells have water cuts of 98% or better. It is easy to show, using enthalpy equations, that the oil from a well with a 98% water cut is utilizing more energy than it is contributing.
Prove it please. Start with how you calculated that MOST stripper wells make 2% oil and 98% water because I most certainly have never seen, heard mentioned, calculated or can in the least believe that this is true. Start with a small example, say, Ohio? Its full of stripper wells, its been produced FOREVER, should be perfect to show that for every 2 barrels of oil produced, they produce 98 barrels of water. _________________ Freddy RULZ!
www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits) (or bankers) (or web "experts")
Posted: Sun Apr 27, 2008 11:39 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan wrote:
Dreamtwister wrote:
Would you spend $130 to get $120 worth of oil out of the ground? That's why there's no incentive to find more. We (generally) already know where the oil is located. The problem is that even at $120/bbl, a lot of that oil is not cost effective to extract.
$120 is not the extraction cost for a barrel of oil.
I'm aware of that, thank you. What I am saying is that even at $120/bbl, most of the oil that is out there is simply not profitable and will therefore not be extracted.
kublikhan wrote:
If there was only enough oil to supply half the worlds needs, that oil would be extremely expensive. All of a sudden, people would start taking a second look at those unconventional or hard to reach oil sources that previously made no sense at $10 a barrel prices, but can generate a nice return at $120 a barrel prices.
No, it doesn't work like that. If oil were $200 or $500 or $1000/bbl, a lot of the oil that remains will never be produced. Ever. Look at shortonoil's example. He's not exaggerating when he says those stripper wells are giving less than 10 bbl/day. I think Texas's average production by well is 9bbl/day. Even at $120/bbl, that's only $1200/day. Now, factor in the cost of salaries, equipment maintainance, energy investment (gotta pump water in before you get water out, ya know), taxes, royalties...Am I missing anything?
Sure, there's still something like 129 billion barrels left in Texas (for example), but most of it will remain in the ground no matter what the price. And this is where US production looks good. If Texas' average is 9bbl/day per well and the national average is 2.2bbl/day per well, just what is the rest of the country pumping?
Water. That's what. _________________ The whole of human history is a refutation by experiment of the concept of "moral world order". - Friedrich Nietzsche
Posted: Sun Apr 27, 2008 11:47 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan wrote:
Quote:
The oil is there, but with current production yielding about $120 a barrel, there is no incentive to find more
This makes no sense at all. With oil at an all time high, there is great incentive to find more oil. When oil is trading at $10 a barrel, thats when there is no incentive to find more.
The higher the price, the greater the incentive a supplier has to produce more......but the enthusiasm of consumers drop.
At some point in the future or maybe it has already happened, suppliers will stop increasing production because there won't be enough people who could afford the higher price. Production costs will continue to rise because the quality of the oil fields get worse, therefore producers cannot lower their price.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
