I will believe the Saudis don't see any upcoming problems with Ghawar when they cancel one of their projects due to low oil prices. If they continue to be full steam ahead with increasing their capacity then I think they are aware that Ghawar may not be as robust in 5 years time as they would like us to believe.
The main interviewee suggests prices may fall soon. I agree that if we are not at peak, demand will have to cool off and supply will catch up and we will see a drop in prices. However, there is alot of uncertainty in that and we have apolitical card to be played as well. The candidates are starting to place nergy on the top of their agendas going into the campaign with McCain taking a very dramatic stand now today and in the coming weeks. I agree peak oil is a compelling story. However, it is will be a reality sooner or later and we have reasons (good reasons) to feel much sooner rather than much later. The interviewee also mentioned the cycle in discoveries being driven by oil prices. However, what he failed to mention is that even though high prices have increased demand for discovery equipment the discovery curve trend has not been broken. In effect is asking us to bet against the exponential decay in discoveries in the 60's. Is anyone here going to take that bet and start selling oil? Who thinks a major price correction is coming anytime soon?
Posted: Wed Jun 18, 2008 6:38 am Post subject: Re: CNBC Talk about oil, peak oil
CEO of Total recently put cost of new oil discovery at $80 per barrel. So where is the cheaper new oil going to come from?
But the key driver of price is the amount of oil exports available to the world, not overall production.
The Export Land Model of Jeffrey Brown shows that Mexico will cease all oil exports in a few years and that worldwide oil exports will decline 75% by 2031.
That, combined with a worldwide fiat money system, doesn't sound like the formula for dramatically lower prices.
Joined: Aug 14, 2007 Posts: 257 Location: Montreal Canada
Posted: Wed Jun 18, 2008 7:49 am Post subject: Re: CNBC Talk about oil, peak oil
Because the economy doesn't work without oil, they will have to buy oil at any price. No oil => no industry => no money, so they will do whatever is necessary to stay in the game.
Joined: Jan 11, 2005 Posts: 568 Location: southern Wisconsin
Posted: Wed Jun 18, 2008 8:07 am Post subject: Re: CNBC Talk about oil, peak oil
The new mantra is: Drill! Drill! Drill!
Almost every day now I see articles, letters to the editor, editorials, advocating developing US reserves.
McCain changing his position on offshore drilling is just the beginning.
Also picked up on a new catch-phrase. "Grow-up" is increasingly used when discussing the controversy surrounding drilling in areas that are currently off-limits.
Posted: Wed Jun 18, 2008 11:09 am Post subject: Re: CNBC Talk about oil, peak oil
retiredguy wrote:
The new mantra is: Drill! Drill! Drill!
Almost every day now I see articles, letters to the editor, editorials, advocating developing US reserves.
McCain changing his position on offshore drilling is just the beginning.
Also picked up on a new catch-phrase. "Grow-up" is increasingly used when discussing the controversy surrounding drilling in areas that are currently off-limits.
Some of the powers behind the scenes see a profit for themselves at a time when they no longer control the oil market. Bush said 18 billion barrels. We know it will take at least five to ten years to get on line and then what will it produce in barrels per day? We use 6 billion barrels per year, so that would be total US supply for three years? And notice it will probably only come out of the ground at a rate of about 1 to 2 million barrels per day at most, and we are probably actually talking (knowing how they do numbers) at 9 billion barrels recoverable. So an extra 1 to two million barrels per day for along time yes, but is that enough to solve the problem? i agree it is not a short term solution to high prices, and that by the time it comes on line it will probably not be significant since we expect demand to rise and/or supply to fall. There is no way that it makes a real difference.
So what things should I assume here.
1) Bush is just chirping to the tune of those who hold his leash?
2) He is clearly lying to us all and knows it is just another profit opportunity for his buddies in the oil industry
3) He actually thinks it will help (Lord help us)
4) It is just typical election year spin to try to get votes
5) They know how bad it is and are trying to keep the masses in the dark as long as possible
(we could go on there are alot of thoughts)
Nothing about what he is saying makes sense to a sensible person. When I hear McCain talk energy Marshall Plan, I think yeah right, we vote your you and you fast track ANWAR and slow pitch alternatives. We get taken and your knew best friends get what they wanted anyways. Obama makes sense on energy but He is carrying a far left agenda in his back pocket.
This is why I may not vote for either. I can't have a clean conscience and do it. It reminds me of the phrase 'Let the dead bury the dead.'
On the discovery cost, are we talking about $80 to discover the oil so therefore before production costs you have to recover $80 per barrel? I'm sure they can get the government to give them some tax beaks for half of that so that the taxpayer foots the bill.
Joined: Jan 11, 2005 Posts: 568 Location: southern Wisconsin
Posted: Wed Jun 18, 2008 9:44 pm Post subject: Re: CNBC Talk about oil, peak oil
Peleg,
Anyone with half a brain can run the numbers concerning US offshore oil and ANWR and come to the same conclusion you just did.
Unfortunately, not many in this country have even that much brainpower.
So Bush proposes that we extract the last remaining liquid crude assets the US possesses to give us, what, another ten years before its all gone? And, since we are anticipating all this new oil, during the time it takes to bring the new fields online we continue to depend on the same oil-based energy infrastructure?
If this isn't the definition of madness, I don't know what is.
I've voted in every presidential election since 1972, but will sit this one out unless I hear one of the candidates actually addressing the issue of overshoot.
My guess is that an alien invasion would be more likely.
Joined: May 23, 2004 Posts: 201 Location: Charlottesville, Virginia
Posted: Thu Jun 19, 2008 12:02 am Post subject: Re: CNBC Talk about oil, peak oil
I've found that CNBC is much more enjoyable if I turn off the sound. I can see the stock quotes and commodity prices and avoid having to throw things at the TV.
I turn the sound on for Pickens and Simmons; Yergin, Economides, Lynch, Dennis Kneale and Vince Farrell I change the channel immediately since I don't want to even see their face. Diana Oleg is fine, as is Charlie Gasparino. The rest are tolerable but generally have liitle interesting to say.
CNBC is basically just McDonalds for business news. They tend to speculate too much with cause and effect, e.g. "Oil is down today due to expectations the Saudis may increase exports". No reason to conclude that. It could be down for any number of reasons.
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