Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Sat May 10, 2008 12:26 pm Post subject: Re: Americans to be banned from overseas oil trading
Plantagenet wrote:
jlw61 wrote:
I would accept that 30% or so is speculation.
Sure. There is a premium of some size due to concerns about future shortages or supply disruptions.
The flip side of this issue is that when speculators put a 30% premium or whatever premium you imagine on the price of commodity, they are overvaluing the commodity and that should attract more sellers and initiate greater production of the commodity. Except that isn't happening with oil---- because worldwide production has plateaued since 2005.
Attacking speculators and making it a crime for Americans to trade oil on overseas exchanges won't produce a single drop more of oil.
It may be good politics for democrats to blame the speculators, but the actual policy will do nothing to help increase supply and nothing to reduce demand from ever-growing Chindia, and those are the two main reasons the price of oil has gone to $126/barrel.
You're saying that reregulating and upping interest rates, will produce such a major disincentive that oil producers will quit exploration all together? Or are you saying that if the price drops, together with the development of alternatives, there will be little incentive to develop new drilling projects?
My own personal feeling, fwiw, is, exploration and refinery expansion aren't more feverish, because it is hellishly expensive. It's likely a foregone conclusion, within the upper echelons of the oil industry, that demand for oil, is in it's twilight years. Much of what we interpret as pure geologic peak, is a peaking in interest, on their part, to pursue further development. The cost benefit analyses are not on their side. All this twit talk from the prezzydent about drilling in ANWAR is just pursuit of a give away to his buddies in the biz.
Notice how crazy anxious they are to drill in Alaska? It's not because it's an energy panic situation, it's because they know if they don't start soon, like yesterday, it's not going to be a financial windfall.
I have seen the future, and it looks like the nuke industry, desperately trying to green wash their pathetic industry is lining up to replace oil.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sat May 10, 2008 1:04 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
My own personal feeling, fwiw, is, exploration and refinery expansion aren't more feverish, because it is hellishly expensive.
Actually, refinery expansion IS going on at a feverish pace, just not in the United States. The oil majors have plenty of money for expensive projects---they've committed 600 million for exploration and pipeline work in Alaska this summer, but no one will risk building a refinery in the US now because of the environmental regulations and the ability of environmental groups to tie up construction projects for years to decades in the courts. Whats the point in even trying to build a refinery in the US?
Overseas the story is different.
The most recent FORTUNE magazine had a nice article about the construction of a huge new refinery city on the west coast of India---the total complex will be the size of Manhattan and will have the capacity to process 6% of all the oil in the world. The plan is to refine the crude there, and then to ship gas throughout India, with leftovers going to the US, Japan etc. as demand warrents. Another giant refinery is also built elsewhere in Asia, where labor is cheap and demand is growing rapidly.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sat May 10, 2008 1:13 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
Notice how crazy anxious they are to drill in Alaska?
Notice how crazy in denial the dems are over their vetoes on drilling in Alaska and drilling offshore?
They are so in thrall to the environmentalists they can't even admit that supply and demand issues are playing a role in the ever increasing oil prices. They live in a lala land where supply and demand issues don't matter and a conspiracy of speculators (the Superspeculators?) set global oil prices.
Posted: Sat May 10, 2008 1:39 pm Post subject: Re: Americans to be banned from overseas oil trading
Plantagenet wrote:
threadbear wrote:
Notice how crazy anxious they are to drill in Alaska?
Notice how crazy in denial the dems are over their vetoes on drilling in Alaska and drilling offshore?
They are so in thrall to the environmentalists they can't even admit that supply and demand issues are playing a role in the ever increasing oil prices. They live in a lala land where supply and demand issues don't matter and a conspiracy of speculators (the Superspeculators?) set global oil prices.
You think so, do you? False dichotemy. How do you know it isn't more about paving the way for nukes?
Posted: Sat May 10, 2008 1:43 pm Post subject: Re: Americans to be banned from overseas oil trading
Plantagenet wrote:
threadbear wrote:
My own personal feeling, fwiw, is, exploration and refinery expansion aren't more feverish, because it is hellishly expensive.
Actually, refinery expansion IS going on at a feverish pace, just not in the United States. The oil majors have plenty of money for expensive projects---they've committed 600 million for exploration and pipeline work in Alaska this summer, but no one will risk building a refinery in the US now because of the environmental regulations and the ability of environmental groups to tie up construction projects for years to decades in the courts. Whats the point in even trying to build a refinery in the US?
Overseas the story is different.
The most recent FORTUNE magazine had a nice article about the construction of a huge new refinery city on the west coast of India---the total complex will be the size of Manhattan and will have the capacity to process 6% of all the oil in the world. The plan is to refine the crude there, and then to ship gas throughout India, with leftovers going to the US, Japan etc. as demand warrents. Another giant refinery is also built elsewhere in Asia, where labor is cheap and demand is growing rapidly.
Expansion going on at a feverish pace--just not in the US, the biggest consumer of gasoline on the planet. Just because India is building refineries, doesn't imply that the developed nations also expect to rely on gasoline as a major energy source, in the future.
And what about those 3 gorgeous dams in China? Doesn't look like the Chinese are planning to run their autos on much other than electrical, generated from hydro, and nukes, too.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sat May 10, 2008 1:51 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
Just because India is building refineries, doesn't imply that the developed nations also expect to rely on gasoline as a major energy source, in the future.
India is planning to export some of the gas that they don't need to the US and other developed countries that no longer have the political will to build refineries for themselves. That way they get the high wage construction jobs, the high wage refining jobs, the chemical engineering expertise and the technology and the infrastructure development.
Last edited by Plantagenet on Sat May 10, 2008 1:53 pm; edited 1 time in total
Posted: Sat May 10, 2008 1:52 pm Post subject: Re: Americans to be banned from overseas oil trading
BTW, Do you know one of the main reasons, McCain drives so many repuglicans nuts, Plantagenet? He's totally opposed to drilling in Anwar. Google it. And irony of ironies, Hillary and Obama are actually not opposed to nukes either. Hmm... I've been screaming from the rooftops, almost since I joined this forum, to keep your eyes on nukes. That's the future, just not the one I want.
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sat May 10, 2008 1:58 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
BTW, Do you know one of the main reasons, McCain drives so many repuglicans nuts, Plantagenet? He's totally opposed to drilling in Anwar. Google it. And irony of ironies, Hillary and Obama are actually not opposed to nukes either. Hmm... I've been screaming from the rooftops, almost since I joined this forum, to keep your eyes on nukes. That's the future, just not the one I want.
Yup. You are right about McCain. His views on ANWR don't really matter, however, because the laws are made by Congress and congress will be even more strongly democratic after the election and the dems oppose opening ANWR.
I agree....nukes will play a big role. Nukes aren't so bad---visit France and ride on some high speed intercity trains and the subways and trams in Paris and other cities----they all run on electricity and all are powered with nukes.
Nukes won't even start to happen in the US for a couple of election cycles at least, because the dems strongly oppose nuclear energy just like they oppose ANWR.
Posted: Sat May 10, 2008 2:17 pm Post subject: Re: Americans to be banned from overseas oil trading
Plantagenet wrote:
threadbear wrote:
BTW, Do you know one of the main reasons, McCain drives so many repuglicans nuts, Plantagenet? He's totally opposed to drilling in Anwar. Google it. And irony of ironies, Hillary and Obama are actually not opposed to nukes either. Hmm... I've been screaming from the rooftops, almost since I joined this forum, to keep your eyes on nukes. That's the future, just not the one I want.
Yup. You are right about McCain. His views on ANWR don't really matter, however, because the laws are made by Congress and congress will be even more strongly democratic after the election and the dems oppose opening ANWR.
I agree....nukes will play a big role. Nukes aren't so bad---visit France and ride on some high speed intercity trains and the subways and trams in Paris and other cities----they all run on electricity and all are powered with nukes.
Nukes won't even start to happen in the US for a couple of election cycles at least, because the dems strongly oppose nuclear energy just like they oppose ANWR.
The energy "crisis" for energy suppliers, is trying to figure out how to play the future. While they worry about it, oil prices are allowed to drift up. This ennables huge profits for oil corporations. But better still, it ushers in a new nuclear energy age, where Joe sixpack, and his 3 headed kids, will quite happily share his backyard with a reactor.
Posted: Sat May 10, 2008 2:50 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
.... But better still, it ushers in a new nuclear energy age, where Joe sixpack, and his 3 headed kids, will quite happily share his backyard with a reactor.
unfortunately Joe Sixpack might not have the opportunity to have 3 headed kids. you know why?
*everybody all together* ---> "The USA is bankrupt"
A lot of people tend to forget the USA has over 100 nuclear reactors in operation right now supplying us with 20% of our electrical needs. Unfortunately there hasn't been much new construction ever since the "minor incident" at 3 mile island back in 1979. That was a long time ago so that means we have lots of old nuclear reactors that need to be replaced very soon. Forget about trying to ramp up production, is the money there to even replace existing infrastructure? probably not
BTW I hear it's quite popular in the USA for nuke plants to get a "Service life extension". If new plants can't be afforded then I guess we'll just have to hold onto the old ones a little longer!
Posted: Sat May 10, 2008 3:15 pm Post subject: Re: Americans to be banned from overseas oil trading
cube wrote:
threadbear wrote:
.... But better still, it ushers in a new nuclear energy age, where Joe sixpack, and his 3 headed kids, will quite happily share his backyard with a reactor.
unfortunately Joe Sixpack might not have the opportunity to have 3 headed kids. you know why?
*everybody all together* ---> "The USA is bankrupt"
A lot of people tend to forget the USA has over 100 nuclear reactors in operation right now supplying us with 20% of our electrical needs. Unfortunately there hasn't been much new construction ever since the "minor incident" at 3 mile island back in 1979. That was a long time ago so that means we have lots of old nuclear reactors that need to be replaced very soon. Forget about trying to ramp up production, is the money there to even replace existing infrastructure? probably not
BTW I hear it's quite popular in the USA for nuke plants to get a "Service life extension". If new plants can't be afforded then I guess we'll just have to hold onto the old ones a little longer!
What's to prevent sovereign wealth funds from building them, using Westinghouse and GE as contractors?
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Sat May 10, 2008 7:39 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
Dude, Your first chart is off. Look at mine, in nominal terms, and adjusted for inflation. Also, check out the correction of price sometime in 2005 through 2006, back to around 50.00. How do you explain this?
Yours is likely daily data. The smoothing of many charts is acheived by using weekly, monthly or even annual data... _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Shanny, A "short term" spike down of around 40%, that lasted over a year, is the main reason I'm posting here. Does anyone have a good theory as to why this occured, in 2005 through 2006? It doesn't appear it is related to geologic peak, at all.
Dude has covered well some of the incidents that caused spike episodes. The last three downward corrections (2004-2006) occurred the last three times that this Industry had brief Inventory builds. Rather than the stock draws or neutral phases we have had since 2006Q3, these were periods when the sector produced 1.5-mbd surpluses. It is these events that capture for us the true price base of the time ... void of speculation. And i stress speculation ... not the effect of speculators, which in itself is less than ten bucks/barrel. Surplus Episodes can bring prices down 30%. _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Sat May 10, 2008 9:37 pm Post subject: Re: Americans to be banned from overseas oil trading
TheDude wrote:
At any rate the overall trend is skyward - and we only have 3.73 BBO of new supply scheduled for 2010, less than CERA's 4.5% annual decline rate. Let's speculate our way out of that one! The IEA outlook that will be published in the fall should be interesting, as they're doing their own bottom-up analysis. My money's on that marking a real paradigm shift, as these new Megaprojects are quite meager additions by and large - and the biggest are in exotic exploration locales like KSA. Course CERA also said we'll have 16 mbpd extra in 2010.
You don't have to wait 'til November, Dude. The 2007 WEO included a bottom study called the Alternative Scenario. We feature its projection on the TrendLines Scenarios 2008.
It forecasts that the fields active in 2006 will see their production decline at a rate of 3.6% (from 85-mbd down to 61-mbd) by 2015. Added to this will be 25-mbd of previously announced Megaprojects, yielding a 2015 Supply flow of 86.4-mbd. In short ... a nine year plauteau. On a more optimistic note, it foresees production rising from 86 to 100-mbd from 2015 to 2030.
On the contrary, its Reference Case projects 99-mbd in 2015 & 116-mbd in 2030 and is featured in our Hail Mary presentation. _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Joined: Apr 09, 2007 Posts: 4860 Location: Alaska (its much bigger than Texas).
Posted: Sun May 11, 2008 6:02 pm Post subject: Re: Americans to be banned from overseas oil trading
threadbear wrote:
What's to prevent sovereign wealth funds from building them [nukes], using Westinghouse and GE as contractors?
The Sierra CLub Legal Foundation and other "environmentalist" groups have a stated policy of using legal tactics to stop every nuke in the U.S. They sue the utility, sue the state, sue the feds, sue the contractors, sue the county, sue the EPA, sue the private consulting companies...and then they appeal.
The net result of this is that nuclear power projects in the USA are delayed for years and then delayed for decades and everybody involved loses wads of money or goes broke then the nukes get cancelled.
And its a two-fer. The environmentalists not only caused the US to waste decades on building a nuclear power grid that isn't dependent on foreign oil, they are responsible for all the CO2 in the atmosphere and greenhouse warming caused by the coal-fired and diesel-fired generators they caused to be built to fill in for the nukes they stopped.
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Doesn't look like the Chinese are planning to run their autos on much other than electrical, generated from hydro, and nukes, too.
