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.
You think $40+ a barrel is "cheap"? 6 years ago they were $12 a barrel, this year they've been up to $55 per barrel, and are likely to go above $50 again next year as OPEC "cuts production". Wouldn't you call that "skyrocketing" prices?
It not cheap, but its not sky-rocketing prices. When you take into consideration inflation it does show that scarcity is up, and an oil shortage is coming, but the prices show nothing about a cataclismic collapse.
Quote:
Oil reserves belong to countries, not oil firms. Many OPEC countries keep their recoverable oil reserves a state secret, and will wildly exaggerate their reserves in order to enhance their quotas, because money (revenue) today is better than money tomorrow when you are acting in self-interest.
The oil companies have survived by meeting the demand of an ever hungrier market and outselling and out-producing competitors; self interest and rationality can conflict, you know. They aren't moving into other industries because the opportunity for profiteering exists as the oil supply dwindles, and oil is a basic good upon which society has grown thoroughly dependent. It is easiest for the oil companies to buy each other up in order to make profit than it is to move into other industries or search for more oil. Besides, oil industries have a comparative advantage at "producing" oil, why would they give that up? Their attitude is 'future be damned, money needs to be made TODAY'. Plus many of them are in denial, just like technological optimists. One oil man who isn't in denial is Richard Simmons; look him up.
Well if the peak oil prophecies are right, then their is no need to outsell, and out-produce the competition. Thats what I'm saying. There is a limited amount of oil, they have acess to a large portion of it, and whatever happens there will be a massive shortage, thus if they were trying to make max profits, then they would shoot up the prices. Why wouldnt they? They have nothing to us, because the industries will still have to buy at least the amount of oil that they can produce, and if oil is all but gone, then why should they worry about some customers moving to different sources of energy???
Also your claim that they just want to make money today and screw tomorrow is really ignorant IMO. These are some of the most powerful corporations in the world, they control the most, and they benefit the most. You think they're just going to let the status quo collapse without a fight??
Posted: Sun Dec 12, 2004 9:39 pm Post subject: Re: Inconsistencies with the peak-oil theory.
Kingcoal wrote:
Gold is scarce and I don't see people moving out of that business. I guess the point of your topic is that if Peak Oil is real, then why aren't oil companies getting out of the business. I think you have to flip your logic around, if peak oil is not real then why aren't the companies investing heavily, why aren't new oil companies being founded, etc. Unless you've been living under a rock, you've probably noticed that the world is having a hard time keeping up with demand. Sounds like a good business to get into to me. There must be a reason - Peak Oil!
Noone claims that gold is almost gone. If people thought that then gold miners would definetly be looking for more business.
As for you assumptions, I think they are flawed. There are no new companies because of corporate (near)-monopolies. I believe new companies would try and enter the business, but economically how do you expect a new company to survive among these merging giants, and 'oil-unions' such as OPEC? I hardly think that this in itself is a reason to believe the world is ending.
Posted: Sun Dec 12, 2004 9:47 pm Post subject: Re: Inconsistencies with the peak-oil theory.
kambei wrote:
Forget economics - look at the science. Oil is a finite resource and discoveries of oil peaked in the 1960's. We now consume about 5 barrels of oil for every 1 we find and this gap is increasing. This is statistical fact. What more evidence do you need that peak oil is correct?
Lol, that seems to be all you guys look at, science. Economics plays as big a role in peak oil as does science.
First, I have seen conflicting "statistical facts" on oil production and discovery. Where do you get these 'facts'? (and please don't say from the guy whos selling his book).
Quote:
The only debate is over precisely when it will occur and what consequences it will have. With those numbers, it's almost certainly no more than 10 years away.
Of course theres going to be some sort of energy crisis, when oil runs out. But your two points and more important than you realize.
Assuming your stats are right, it should happen within 10 years. Now what consequences it will have is the real question. It could be anywhere from an energy crisis (like that of the 70's), to a global economic collapse.
Now scientifically its pretty hard to come up with numbers to support a collapse, but apparently you have them. Economically it doesnt seem to be coming that hard, so I'm just tryna find a middle ground.
Don't let Hollywood's vision of corporations fool you.
Despite being portrayed as sophisticated geniuses skillfully manipulating markets & governments, the truth is I would not let many of these jokers park my car.
<See - The Peter Principal>
In a place where golf is often more important than the board room, and managers are motivated to meet numbers which bump the stock value short-term, this myopic business philosophy should surprise nobody.
There are notable example of major oil companies doing the smart planning for the future however. Exxon for example seems keenly aware of the coming energy crisis. Many oil majors do have a diversified investment strategy which include non-energy markets.
Remember that PO theory says that at peak, the world is producing more oil & gas than ever before, which we are in fact doing right now.
I would suggest that post peak is a watershed event for profits in the energy industry. As supplies slide down the far side of peak, rising prices will more than compensate these producers for dwindling supplies. This idea is supported by the avalanche of mergers & acquisitions by oil majors in recent years. If I knew supply was going to fall, thus driving prices skyward, I'd buy up every known resource I could find...
And they are.
Finally, if you're an oil producer, you would favor a sharp drop in oil supplies, rather than a slow decline.
Why?
A slow decline would encourage the development of oil & gas alternatives through price incentives. The less the world depends on oil & gas, the lower the price.
But if the peak is a steep cliff, oil & gas prices hit the roof guaranteeing maximum profit.
Thus, to facilitate this sharp decline scenario, you pursue policies which keep demand growing for oil & gas as long as possible, so that the unprepared world is as far along the depletion event as possible. The longer they can mask depletion by misrepresenting reserve numbers etc, (see Shell forced to reduce reserve claims), the more money they stand to make.
Think of the Roadrunner & Coyote cartoons... the coyote is running & running going faster & faster, until he runs off the cliff, and hangs for a moment in mid-air, a surprised look on his face, before plummeting to the valley floor.
But why would they want a collapse of their industry, even if they temporarily gain? By doing this they give up the energy strangle-hold they have on the world. I dont think that a single pay-off is worth destroying the world most profitable industry in the blink of an eye.
Posted: Sun Dec 12, 2004 10:01 pm Post subject: Re: Inconsistencies with the peak-oil theory.
Such wrote:
The oil companies DO know about peak... I worked as a consultant for a few companies as long ago as 1999... they talk about this all the time in the hallways - granted they don't use the words "peak oil"... they use things like the word "business challenge" or "long term risk exposure". At the time, I didn't think much about this, because I was there doing programming and systems analysis, not geology.
About price, it is set based on the contract to deliver for a certain month... so when you see the price of oil on the market, its the futures contract price for light sweet crude for the following month.... the price doesn't get too out of control overnight because there is a hell of a lot of oil coming into markets for next month.... the rate of production hasn't started to decline permanently yet.
now, one of the things we will see as we keep bumping against the world production capacity ceiling, is more volatility. If you look at the price of oil over the last 10-15 years its been very stable (ignoring political events). As we've approached production capacity over the last few years or so... the price has started to swing back and forth... but gradually moving higher... so we go from the low $30s... up through the mid-$50s this year and back down... and next year we will see it swing up and down again... probably more dramatically. But the longer term direction will continue to be up... just watch it - but keep in mind that you have to ignore short term variables.
Okay, but I only see minimal reaction, which leads me to believe that the peak-oil crisis will hit softer than most seem to assume.
Quote:
They ARE moving to other industries... as much as they can with the assets they own... which prevents an overnight shift into something else. Plus, we have to remember there is still around a trillion barrels out there, that is a hell of a lot of money to be made.
BP now stands for "Beyond Petroleum" and they are (i think) now the largest solar cell producer in the world. Exxon has been pushing the LNG commercials on TV lately... they know that they need to grow this segment of business and make this seem attractive to investors to continue long term revenue growth. Kerr-McGee have these deepwater commercials running now... why? because that's the only place there's any oil left to find.
I just see them putting so much into oil production though, when the theory claims that they are basically giving up on finding any new oil.
I have a question regarding the deepwater, or deepearth oil extraction too. Won't this basically take care of the collapse. I mean there must be tons and tons of oil that is in the ocean that was originally too deep to drill for (or too deep in the land). But as oil prices rise, (and using better technology) won't it become profitable for companies to extract these oil wells, thus making oil more expensive (instead of non-existent), and thus making peak-oil a transition more than a collapse??
Quote:
Other companies, such as tiremakers (i work for one) are looking into decreasing the weight and rolling resistance of tires in anticipation of a demand for very high fuel efficiency in cars. We talk about the long term increased scarcity of petrol at work EVERY DAY!
Again, I see what you mean by a coming energy crisis. I have no doubt that our current consumtion of oil will not be sustainable. But doesnt the fact that your tire company, and the car companies, and the government still producing machinery that needs oil (even if it is less than before) prove that this will be a harmful transition from oil reliance, rather than a collapse??
Quote:
Again, they talk about this, but its all "long term risk exposure" etc. etc. etc. Remember too, they have a vast amount of their resources dedicated to just running the business day-to-day just like any company... so there is very little discussion on a day-to-day basis.
Exploration activities are falling slowly away because the potential profits from exploration are dwindling. Now, when the price goes higher, of course, there will be more exploration and a few finds - but we gotta find TEN MORE NORTH SEAS or THREE NEW GHAWARS!!! to meet projected demand by 2020... where in the hell is that amount of oil gonna be found?
Antarctica? the South China Sea? North Pole?
So in response, you see companies merging to grow their reserves... Exxon-Mobil, Chevron-Texaco, BP-Amoco...
Also, nowadays there is ALOT of excitment when someone finds a 500 million barrel field somewhere... do you know how much oil that is? It's 6 days of oil for the world.... 6 lousy days... That means that we need to find more than 500 million barrels of oil more than every week!
Granted, that the 500 million barrels won't be extracted in 6 days, but it might reach a 50K, 100K, 200K barrels a day of production... that's a drop in the bucket.
I have no response, except for my earlier question about extraction deep oil.
Posted: Sun Dec 12, 2004 10:20 pm Post subject: @derek
>Okay, but I only see minimal reaction, which leads me to believe that the peak-oil crisis will hit softer than most seem to assume.
It doesn't matter what you may 'see'. The world will not move according to what you 'see'. It will have its own schedule.
>I have a question regarding the deepwater, or deepearth oil extraction too. Won't this basically take care of the collapse.
>I mean there must be tons and tons of oil that is in the ocean that was originally too deep to drill for (or too deep in the land).
>making peak-oil a transition more than a collapse??
Not when demand is far outstripping the supply.
>this will be a harmful transition from oil reliance, rather than a collapse??
If you imagine a fire in a sold-out rock concert with one single exit, you will know what we mean.
>But why would they want a collapse of their industry, even if they temporarily gain? By doing this they give up the energy strangle-hold they have on the world. I dont think that a single pay-off is worth destroying the world most profitable industry in the blink of an eye
What alternative will they have? There would be no oil to sell anyways.
Better to grab everything at one shot than holding the bag.
>Lol, that seems to be all you guys look at, science. Economics plays as big a role in peak oil as does science.
In fact, all these reliance on 'economics' theory brought us into this deep doo-doo. Economic theory tells that if a resource gets scarce we will find another one. But the cold truth is that oil is not a substitutable resource.
Historically there are always some people who will hold on to the flimsiest sliver of hope when the roof is caving in.
Joined: Jul 21, 2004 Posts: 1333 Location: Suburban tar sands
Posted: Mon Dec 13, 2004 12:44 am Post subject: Re: Inconsistencies with the peak-oil theory.
derek57 wrote:
I have a question regarding the deepwater, or deepearth oil extraction too. Won't this basically take care of the collapse. I mean there must be tons and tons of oil that is in the ocean that was originally too deep to drill for (or too deep in the land). But as oil prices rise, (and using better technology) won't it become profitable for companies to extract these oil wells, thus making oil more expensive (instead of non-existent), and thus making peak-oil a transition more than a collapse??
3/4 of the Earth is ocean but the sea-floor is not a good oil prospect - it is the wrong kind of rocks. As I said in another discussion:
Joined: Jul 21, 2004 Posts: 1333 Location: Suburban tar sands
Posted: Mon Dec 13, 2004 1:16 am Post subject: Re: Inconsistencies with the peak-oil theory.
derek57 wrote:
There are a few things about the whole peak-oil theory that arn't making sense for me. Mostly its very basic economics.
Also if the companies have seen this problem coming, and are slowing exploration, and drilling projects, why are they not trying to move into other industries? They know that their industry is build on an unrenewable resource, then to survive they must realize that they have to put alot of money into research alternative method of energy all together (which they could fund through high oil prices).
Oil companies stand to make good profits for decades, even after Peak. Investors don't care if companies survive, as long as they pay enough dividends over their remaining lifetime to justify the investment.
According to your thinking, candle manufacturers should have diversified into making electric lamps, and buggy whip manufacturers should have gone into making oil filters or automobile transmissions.
But I don't think it works that way. If you want to invest in solar energy will you put your money in BP which is mainly an oil company, but does a little solar on the side (in which it has no particular expertise, and not much motivation)? Or will you invest in a company that is 100% committed to solar?
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Mon Dec 13, 2004 8:42 am Post subject:
derek57, I'm still not understanding what your point is. Peak Oil is not a theory, it is based on fact. In fact, the opposite of Peak Oil, the optimists, base their comfort on the assumption that we will "figure something out." Peak Oil is based on existing reserves and the history of oil discovery and the fact that there have not been any big finds in decades of exploration. Based on the existing reserves and projections made based past history of discovery, we should be hitting peak very soon, or maybe we have already. Another reason to take peak oil seriously is that it has a proven track record - the Hubbert prediction of peak production in the lower 48 states.
There is a lot of oil left, but it will get more and more expensive to extract it. Once it takes a barrel of oil to get a barrel of oil, we hit unsustainability. Now hopefully, by that time, we will have figured something out, but we will run out of oil either way.
Posted: Mon Dec 13, 2004 3:32 pm Post subject: Re: Inconsistencies with the peak-oil theory.
derek57 wrote:
Where do you get these 'facts'? (and please don't say from the guy whos selling his book).
Man... comments like this really piss me off. What? Just because someone has taken the time to research and compile information on a topic into a book, gone through the trouble of getting it published (try it sometime; it is a lot of trouble) and hopes to maybe get a little something back for their efforts (by the way an author's net return is usually less than 2%, or about 27 cents on every copy of a book sold for $15 retail), that means the information they present is unworthy of consideration? How incredibly presumptuous and arrogant...
Posted: Mon Dec 13, 2004 5:28 pm Post subject: Re: Inconsistencies with the peak-oil theory.
Keith_McClary wrote:
Oil companies stand to make good profits for decades, even after Peak. Investors don't care if companies survive, as long as they pay enough dividends over their remaining lifetime to justify the investment.
How exactly are they to pay their dividens from if they don't 'survive'? Also the company executives, and CEO's absolutely do care if they survive.
Quote:
According to your thinking, candle manufacturers should have diversified into making electric lamps, and buggy whip manufacturers should have gone into making oil filters or automobile transmissions.
Of course. I'm pretty sure they would have....
Quote:
But I don't think it works that way. If you want to invest in solar energy will you put your money in BP which is mainly an oil company, but does a little solar on the side (in which it has no particular expertise, and not much motivation)? Or will you invest in a company that is 100% committed to solar?
I'm not talking about the individual investors, I'm talking about the company as a whole. The chairman, and a very few leading stock holders actually have a say in what they company does, and I'm sure they would like to keep the oil they have, cash the huge pay-off, while pushing the companies resources into different methods of energy production...instead of watching it collapse.
derek57, I'm still not understanding what your point is. Peak Oil is not a theory, it is based on fact. In fact, the opposite of Peak Oil, the optimists, base their comfort on the assumption that we will "figure something out." Peak Oil is based on existing reserves and the history of oil discovery and the fact that there have not been any big finds in decades of exploration. Based on the existing reserves and projections made based past history of discovery, we should be hitting peak very soon, or maybe we have already. Another reason to take peak oil seriously is that it has a proven track record - the Hubbert prediction of peak production in the lower 48 states.
There is a lot of oil left, but it will get more and more expensive to extract it. Once it takes a barrel of oil to get a barrel of oil, we hit unsustainability. Now hopefully, by that time, we will have figured something out, but we will run out of oil either way.
Of course we will run out. When I say the peak-oil theory, I mean the idea that right after oil-peaks, we will quickly run out of oil, the fall will not be downhill but a cliff. Unless governments or companies, or both are acting irrational, and ignoring this possibility, then it should not be a collapse, but a gradual decline. Whether we find a replacement or not, the laws of capitalism provide that their will be time and incentive to at least try for one.
Posted: Mon Dec 13, 2004 5:36 pm Post subject: Re: @derek
pkofsocal wrote:
It doesn't matter what you may 'see'. The world will not move according to what you 'see'. It will have its own schedule.
So I'm to assume this is real because a book told me so, even though everything around me is telling me that its not?
Quote:
Not when demand is far outstripping the supply.
Demand will fall when prices rise. Prices will rise when scarcity rises. Of course we'll have to start using less and less, the first thing to go will probably be SUV's.
Quote:
If you imagine a fire in a sold-out rock concert with one single exit, you will know what we mean.
What alternative will they have? There would be no oil to sell anyways.
Better to grab everything at one shot than holding the bag.
There would be diffirent methods of attaining energy that they could steal a monopoly of. It might not replace oil, but it will make a difference.
Quote:
In fact, all these reliance on 'economics' theory brought us into this deep doo-doo. Economic theory tells that if a resource gets scarce we will find another one. But the cold truth is that oil is not a substitutable resource.
It doesn't matter. You over simplify the market forces. Even if we never completely replace oil, the market forces should insure that we have time, and incentive to look into other methods of energy.
Quote:
Historically there are always some people who will hold on to the flimsiest sliver of hope when the roof is caving in.
Care to give examples? I've seen more examples of false doomsday prophecies.
All times are GMT - 6 Hours Goto page Previous1, 2, 3, 4Next
Page 2 of 4
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
