Peak Oil- what it is and how it will impact your life

It was me...lol I just made an edit to your post that dosent require your password.
Look at the buttons across the top after you hit reply its the one that looks like a cartoon text balloon.
Then type between the quote words.

 

No worries I was hoping you would edit and see what I had done for a hands approach to help you out.

 

Hover your mouse over them and the name will appear.

 

Well folks, once again we watch the price of crude climb. Setting new highs nearly every day. For months analysts and pundits have been comparing this trend to 2008. But once again we keep hearing the same mantra we heard then. The Saudi's will boost output to keep a lid on the price.

That may have been possible to do in the 80's, even into the 90's, but it never happened in '08 and it isn't going to happen now either.
The day of the mega fields and the ability to simply "ramp up" production to compensate for wild fluctuations in price, to supplement the world supplies lost to unrest in Libya, Egypt etc. are gone.

The fact is that the worlds oilfields are producing at or very near to maximum output now, and still just barely keeping up with ever growing world demand.

The recent worldwide economic downturn, if not intentionally manipulated, certainly was convenient for world oil markets. Demand was quickly out pacing supply and if not for the slowing of demand due to the economic crises, a sort of catching our breath time, catching up time, then there is no telling how high prices would be right now. It is a treadmill that is increasing in speed and we are having to run faster and faster to keep from getting thrown off of it. But we can't keep up that pace forever.

This bit of news should have sent shock waves throughout the markets but it went largely ignored and was overshadowed by the events in Egypt that kept the worlds attention.

http://thefundamentalview.blogspot.com/2011/02/saudi-oil-blunder-may-blow-lid-off-oil.html


http://www.freerepublic.com/focus/f-news/2670969/posts?page=18


[FONT=times new roman,times]"The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show
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[FONT=times new roman,times]The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.[/FONT]
[FONT=times new roman,times]However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.[/FONT]
[FONT=times new roman,times]According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then - possibly as early as 2012 - global oil production would have hit its highest point. This crunch point is known as "peak oil".(the IEA just came out with their 2011 outlook and admitted for the first time that world production peaked in 2006)[/FONT]
[FONT=times new roman,times]Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.[/FONT]
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[FONT=times new roman,times]In other words, if there's a war between Israel and Iran, our goose is cooked. Saudi Arabia will be unable to pump enough oil to materially affect the price of a barrel of oil which could lead to nightmare prices exceeding $300 bbl."[/FONT]




[FONT=times new roman,times]One other thing I'd like to address. I hear every time the price of oil goes up and the price at the pump seems to magically go up overnight some people claiming that as proof of price manipulation or gouging. "How can the price of a barrel go up at noon and by dark the price of gasoline has risen 5 cents?"[/FONT]
[FONT=times new roman,times]
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[FONT=times new roman,times] You have to understand that gasoline is priced now, oil is priced in the future. The price of oil that we hear about is the price of futures contracts. The filling stations have purchased the gasoline in their tanks at one price. And are selling it at a price that allows them to make a profit and have enough to re-supply their tanks next month. When the price of crude for next month has risen 10 dollars, then the next months supply of gasoline that they purchase is going to cost more. So they have to immediately raise the price they are charging on the fuel in their tanks so that they can afford to buy next months supply at the higher price.[/FONT]
[FONT=times new roman,times]
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[FONT=times new roman,times] Nearly all the filling station in the US are franchises. Local owner/operators pay for the right to use a company logo. They are under contract to purchase the fuel that they sell from Chevron, Texaco, Valero etc. But those oil companies don't determine the price that they sell that fuel for, that is set by the local owner and is based on what they must make in profit to be able to re-supply next month. The profit margin on gasoline is on average about 4 cents a gallon for the retailers. It is more an inducement to stop and buy the much more profitable items inside the store ie; soda, beer, groceries etc.
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(I don't know why the links aren't working but you can copy and paste in the address bar and they work)

 

This just in




Oil prices pass $102 for first time since Sept. - Business - Oil & energy - msnbc.com


Oil prices settled above $102 per barrel for the first time since September of 2008 as fighting escalated in Libya and petroleum demand grew in the U.S.

Gasoline prices are expected to keep rising, though more gradually, this spring, topping out at between $3.50 and $3.75 a gallon.

 

$3.359 here locally @ Valero.

 

Today here, $3.69 for 87 octane

 

Isn't he the guy who couldn't figure out how to work the Turbo Tax computer program? Well, if he says "Oils Well" then I guess that's it then. We can close this thread down and all go home. In the words of the late great Emily Latella

"Never mind"

 

Oh boy, here we go again.

Moose, thank you for the post and please don't take the following personal. It is not directed towards you.

Every time we see a spike in oil prices we get someone who comes along and finds an article on the net somewhere that "proves" that we have all the oil we need. If we would only go get it. And it is always someone who is preventing us from becoming self sufficient and keeping gas prices under $1 a gallon. Sometimes it is the govt, sometimes the environmentalists, and most often the oil companies.

I know that this thread is a behemoth, but I wish people would read the entire thing before joining in the debate. You would see the problem and understand the complexities of the situation.

Once again, peak oil, and the resulting higher prices, is NOT about running out of oil. It is about running out of cheap, easily obtained, easily refined oil. The low hanging fruit has been picked. We must go to more and more extreme measures (i.e., climb higher) to get to the remaining fruit.

For example, paying a drilling contractor a million dollars a day to drill in 5 miles of ocean. We would not be there, not be investing that kind of money, taking that kind of risk, if we could find it anywhere else.

There will be oil for our lifetimes, for our kids lifetimes, and for our grand kids lifetimes. The question is, "How much are you willing to pay for it?"

Without going into ERI and all the technical information (that is to be found in the pages of this thread) let me go through the scenarios.

First, estimated reserves are always on the (wildly)optimistic side plus they are not recoverable amounts only theoretical amounts that may, possibly be there.

The Bakken; A good field and quite a lot of recoverable oil. But it is mainly a gas field and the oil is a side benefit, and the amount of oil has been downgraded several times since the fields discovery. It originally was the next Saudi Arabia. But the facts came to bear and the vast ocean of oil that was originally prophesied never materialized. This is an outcome repeated in nearly every new field ever discovered. The greatest need when a field is discovered is investment so naturally every field is a giant.

Tar sands. Yes Canada produces a vast quantity of oil from their tar sand project. They also have another vast natural resource that makes that possible, water. It takes many more millions of gallons of water to get that oil than the gallons of oil recovered. And it is not drilled, it is strip mined. The Canadian tar sands are visible from space. Not a good thing. Are we willing to cut vast swaths of land to extract a low quality product. Even if we had the water to allow it?

Shale oil. There is more oil in the rocky mountains than in Saudi Arabia. True, somewhat. Shale oil is not oil. It is the precursor to oil. In another few million years, lying in the hot earth below the crushing weight of the Rocky Mountains and it would become oil. It is a rock and it can't be drilled. Here again the specter of Jed Clampett rears it's head. Shoot a hole in the ground and up comes a bubblin crude. Life isn't that simple. And Shale oil is far from a bubblin crude.

Shale oil rock is mined. And the process to crush that rock and extract the minute traces of pre-oil, then convert it to a usable product is daunting at best. It can be done. But at what cost? Even if we were willing to strip mine the entire Rocky Mountain range. Turn it into flat prairie to get the amount of shale oil needed to feed this countries ever growing demand for any number of years, what price would we be willing to pay for it? The resulting product would be so expensive as to have us fondly remembering the good old days of $4 and $5 a gallon gasoline.

Right now the only area that has a reasonable potential to increase our domestic supply is the outer continental shelf. But, again, at what price?
The technology is not there yet to be absolutely safe in drilling in those extreme conditions. It is similar to drilling on mars. And it is very expensive. The price of oil would have to remain around the $100 a barrel mark to make it even remotely feasible.

So, again, the question is not "How much oil is there?". The question is "How much are you willing to pay for it?"

 

Nope not a canuck. "We" as in us here in the USA. The tar sands can be seen on google earth without the need for zooming in and the astronauts in the space station have seen it with the naked eye. The question was would "We" here in the US be willing to cut up large sections of our land even if we could? I see a huge fight with the greenies and with the .gov regulators on that one. But we don't have the water available to be able to produce anywhere near what Canada does so it is a moot point anyway.

Yes Canada can extract a lot of oil from their tar sands project for years to come. Most people don't know that Canada is our #1 supplier of imported oil. There is a project underway now to build a pipeline to transport that tar sand oil to us. But the other side of peak oil, and a factor that will affect us sooner and more severely is peak exports.

As oil supplies dwindle how long before exporters like Canada begin to cut back on what they export? There will come a point where those countries will need to save more and more for their own consumption. So those years of oil available from Canada's tar sands project won't do us a lot of good down here.

 

This is not good news. Not in the land where gas is 20 cents a gallon.

Saudis prepare for an oil-depleted future - Business - World business - msnbc.com

As oil supply dwindles, Saudis turn to renewable energy
World's largest oil exporter to spend $100 billion on new energy sources


Saudi Arabia, the world's largest oil exporter, may not be panicking quite yet about its ever-declining oil supply —but the country is certainly concerned.

Consider: In February, a Wikileaks document revealed that Saudi Arabia might be overstating its oil reserves by 300 billion barrels, and the country recently asked for a slice of the UN's $100 billion climate change fund to help diversify to other energy sources (a galling request from such a wealthy country so dependent on other people not diversifying to other energy sources).

And now the kingdom has announced that it plans to spend $100 billion on solar, nuclear and other renewable energy sources. They haven't announced over what time period they will spend it, but that's a lot of cash. Private investments in Chinese renewable energy projects totalled $54.4 billion last year, which was the highest of any country.

"Fuel supply is one of the major challenges facing the power sector and the nation," Saleh Al-Awaji, Saudi Arabia’s deputy minister for electricity at the Ministry of Water, said at a recent conferencein Abu Dhabi. "The policy is to work intensely on saving energy and making sure every barrel of oil that can be saved is, and is made available for export."

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