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$50 oil price unsustainable

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Re: $50 oil price unsustainable

Postby Pops » Fri 23 Jan 2015, 22:50:45

$this->bbcode_second_pass_quote('toolpush', ' ')That is my point, Americans have complained about high gas prices sending them broke, but refuse to down size their vehicles.

Where have you been?

Image

That isn't zeroed btw.

Oh and don't lump me in with short, I'm pretty sure oil will continue to have value for a very long time yet.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
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Re: $50 oil price unsustainable

Postby toolpush » Fri 23 Jan 2015, 23:55:01

Pops,

You may find there is a little growth taking place due cheaper gas price. From your graph the last data point is approx 348,000,000 gal/month. Convert to BBl=8,285,000.



http://www.eia.gov/petroleum/supply/wee ... lights.pdf
$this->bbcode_second_pass_quote('', 'O')ver
the last four weeks, motor gasoline product supplied averaged over
9.0 million barrels per day, up by 8.7% from the same period last year.


Car manufactures have gone to great lengths to increase fuel economy. Ford, with their new Aluminium F-150 is a great example, in attempts to allow the US market to have their cake and eat as well. It is a shame the same people who can't afford to fill their current ride, can't afford these creations, and continue to drive their old fuel guzzlers. Whereas they most likely could afford a new small car getting up to 40 to 50 mpg, but they don't as they are addict, brainwashed, or what ever to the bigger is better mentality.

Anyway Pops, I am sure this has gone far enough. My main point is small vehicles will always use less fuel than a large one, all else being equal. This is a peak oil site, where minimizing oil use is discussed.
As I said before I knew I was tilting at windmills. Enjoy your day.
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Re: $50 oil price unsustainable

Postby vtsnowedin » Sat 24 Jan 2015, 03:08:50

$this->bbcode_second_pass_quote('Tanada', 'L')ets see the USA spent what, $7,000,000,000,000.00 on 'stimulus' for the last 6 years. In that same period we have consumed about 24,000,000,000 barrels of Diesel, Kerosene and Gasoline. That works out to about $290.00/bbl, which would mean as a subsidy at the pump fuel would be free for another 6-10 years on top of the last 6 years.

This is why I have never believes in EROEI. Governments can set wage and price controls, pass subsidies or enforce taxes. The price oil is worth is not really set by the market working through the invisible hand, it is set by multiple competing hands all trying to yank the price in the direction they prefer.

If the Federal Government of the USA had set a fuel subsidy of say $1.50/gallon on Kerosene/Diesel/Gasoline in the fall of 2008 what do you think would have happened to the USA economy? My prediction, it would have been growing like crazy for the last 6 years and the D's would have been reelected with full control of Congress in a landslide.

As long as someone, anyone really, is willing to pay for the black stuff it doesn't matter a hill of beans how much energy is returned on the energy investment.

That is a pretty interesting calculation there Tanada. $290/bl Wow that is a lot !! and I hadn't looked at it that way before. We should look at who ended up with the seven trillion dollars and what exactly the taxpayers got for the money. I suspect more then a few Grubbers at work here.
ERORI doesn't matter until the day it does. As KSA and others are still pumping from low cost giant fields it is still high enough to not matter. let Gawar water out and then it will.
If the federal government had subsidized gas at $1.50 a gallon without the cooperation of KSA demand would have outstripped supply (the part actually put up for sale) and the price of crude would have risen by $1.50/gallon or more.
$this->bbcode_second_pass_quote('', '
')As long as someone, anyone really, is willing to pay for the black stuff it doesn't matter a hill of beans how much energy is returned on the energy investment

That only works if you have some alternate source of energy to use getting the black stuff out of the ground. I suppose a nodding donkey can be run off a windmill or solar panels and a drill rig could use wood fired steam engines.
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Re: $50 oil price unsustainable

Postby Strummer » Sat 24 Jan 2015, 07:28:24

$this->bbcode_second_pass_quote('Tanada', 'L')ets see the USA spent what, $7,000,000,000,000.00 on 'stimulus' for the last 6 years. In that same period we have consumed about 24,000,000,000 barrels of Diesel, Kerosene and Gasoline. That works out to about $290.00/bbl, which would mean as a subsidy at the pump fuel would be free for another 6-10 years on top of the last 6 years.

This is why I have never believes in EROEI. Governments can set wage and price controls, pass subsidies or enforce taxes. The price oil is worth is not really set by the market working through the invisible hand, it is set by multiple competing hands all trying to yank the price in the direction they prefer.


But that only works because the rest of the world is forced to subsidize the USA.

EROEI is still valid, it's just that the real "invested" part of it is being paid by others (by being forced to provide the USA with credit, due to the way its dominance of the global economic system is set up). Every dollar of the US debt is equal to some real resource which instead of being used somewhere else, is being used to prop up US shale.
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Re: $50 oil price unsustainable

Postby Tanada » Sat 24 Jan 2015, 09:56:20

$this->bbcode_second_pass_quote('vtsnowedin', '
')That is a pretty interesting calculation there Tanada. $290/bl Wow that is a lot !! and I hadn't looked at it that way before. We should look at who ended up with the seven trillion dollars and what exactly the taxpayers got for the money. I suspect more then a few Grubbers at work here.
ERORI doesn't matter until the day it does. As KSA and others are still pumping from low cost giant fields it is still high enough to not matter. let Gawar water out and then it will.
If the federal government had subsidized gas at $1.50 a gallon without the cooperation of KSA demand would have outstripped supply (the part actually put up for sale) and the price of crude would have risen by $1.50/gallon or more.

Sure demand would have been higher and no doubt it would have soaked up part or all of that subsidy, however you have to look at the full picture. With higher sustained demand fracking would have had all the financing it needed without turning to junk bonds. In 2010 when the price was not yet all that high after the 2009 low point the economy would have been roaring along much healthier. With oil money pouring into Libya there is a reasonable chance the Arab Spring would have died in Tunisia soon after it started because Quadaffi would have been able to keep his people happy and on his side. On the other side of the coin the USA consumption would be at high levels so all that oil China bought off of the world market would have come from countries outside of Asia and North Ame4rica no longer having the ability to buy. Europe's economy would be deep in recession and more dependent on Russian supply than ever before.

Like any scenario there are always winner and losers.
$this->bbcode_second_pass_quote('vtsnowedin', '
')$this->bbcode_second_pass_quote('Tanada', '
')As long as someone, anyone really, is willing to pay for the black stuff it doesn't matter a hill of beans how much energy is returned on the energy investment

That only works if you have some alternate source of energy to use getting the black stuff out of the ground. I suppose a nodding donkey can be run off a windmill or solar panels and a drill rig could use wood fired steam engines.


Here is the thing though, when oil actually approaches the point where EROEI becomes 1:1 it makes sense to start manufacturing synthetic fuel from CO2+H2O+Energy. We have a thread pages long on that topic,

co2-h2o-energy-synthetic-fuel-t57236.html

The point being so long as out civilization survives liquid fuels have just too much convenience to be abandoned quickly. I like electric as a future option, but nothing beats the convenience of pulling into any of a dozen fueling stations within a mile in the city and filling up in five minutes. Liquid fuels are very energy dense compared to most battery chemistries as well. I think if we continue on another 20 years the oil we get out of the ground will still be 2:1 or better EROEI because the synthetics will put a cap around there. Also unlike a well in the ground where tons of steel get used never to be recovered in a sythetic fuel factory some day in the future all that material is available for reuse or recycle. Another winning point, if demand goes down you can shut a factory off in a few days mothballed against future need, for a lot of oil wells that is not true.
Last edited by Tanada on Sat 24 Jan 2015, 09:58:20, edited 1 time in total.
Reason: fixed broken quote
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
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Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: $50 oil price unsustainable

Postby Pops » Sat 24 Jan 2015, 10:56:41

I agree T, the stimulus merely inflated the imaginary equity economy while the high oil price gas "tax" was a drag on the real economy.

OTOH, the biggest problem with a "fiat" economy, as any gold bug will tell you, is the danger that government will put off painful but necessary de-leveraging, bailing out entities that should be left for dead and creating zombies. In choosing to prop up the stock market and re-float the banks rather than subsidize gasoline, the government accidentally strengthened the real economy by lowering personal debt, reducing overbuilt retail and other capacity, even reducing household formation and square foot per person housing averages.

I know it may not feel stronger but it ain't dead either and you know what they say about what doesn't kill you...
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: $50 oil price unsustainable

Postby vtsnowedin » Sat 24 Jan 2015, 10:58:16

You can't seriously point to that thread as a solution to our energy problems. co2-h2o-energy-synthetic-fuel-t57236.html
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Re: $50 oil price unsustainable

Postby Tanada » Sat 24 Jan 2015, 11:42:48

$this->bbcode_second_pass_quote('vtsnowedin', 'Y')ou can't seriously point to that thread as a solution to our energy problems. co2-h2o-energy-synthetic-fuel-t57236.html


No that is not what I am saying at all. I am saying it will be more sensible to store energy in synthetic liquid fuel products than it would be to produce oil from natural sources with an EROEI approaching 1:1


You mentioned using renewable energy to produce low EROEI oil with solar/wind/biomass as the energy source. I think using whatever energy source you have to manufacture synthetic oil would make more sense than using that same energy source to produce low EROEI crude oil that still has to be refined and shipped half way around the world.

To produce that low EROEI oil or synthetic liquid fuel you will need a primary energy source. My preferred is breeder nuclear fission but the majority of the population is still scared to use it. No matter what source you end up using IMO crude oil from the ground will be less and less of the energy mix in the future than it is today.
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
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Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: $50 oil price unsustainable

Postby Tanada » Sat 24 Jan 2015, 11:54:42

$this->bbcode_second_pass_quote('Pops', 'I') agree T, the stimulus merely inflated the imaginary equity economy while the high oil price gas "tax" was a drag on the real economy.

OTOH, the biggest problem with a "fiat" economy, as any gold bug will tell you, is the danger that government will put off painful but necessary de-leveraging, bailing out entities that should be left for dead and creating zombies. In choosing to prop up the stock market and re-float the banks rather than subsidize gasoline, the government accidentally strengthened the real economy by lowering personal debt, reducing overbuilt retail and other capacity, even reducing household formation and square foot per person housing averages.

I know it may not feel stronger but it ain't dead either and you know what they say about what doesn't kill you...


Sure, but as one of those who lost a job I happen to think I was pretty good at because of the crash after effects it is hard to see things that way. Sure I no longer owe $84,000 on my house, but that debt was eliminated by foreclosure, not some happy camper I am in better shape to face the future way. I am listed on my credit report as a bad risk for 7-10 years and the $30,000 in equity I had built up into that house before 2012 is gone the way of the Dodo bird.

If the Government had chosen a different path then I could have walked out the door when I lost my job and had a new one within a couple weeks. That was my experience through my adult life right up until 2012. That is no longer the case, every high school student is out there after the same 20 hour a week minimum wage job around, and the higher paying jobs are few and far between along with full time positions. Trust me going from decent pay 45 hours a week with decent healthcare to 20 hours a week minimum wage no health care is a heck of a financial burden.
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Re: $50 oil price unsustainable

Postby vtsnowedin » Sat 24 Jan 2015, 14:06:42

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('vtsnowedin', 'Y')ou can't seriously point to that thread as a solution to our energy problems. co2-h2o-energy-synthetic-fuel-t57236.html


No that is not what I am saying at all. I am saying it will be more sensible to store energy in synthetic liquid fuel products than it would be to produce oil from natural sources with an EROEI approaching 1:1


You mentioned using renewable energy to produce low EROEI oil with solar/wind/biomass as the energy source. I think using whatever energy source you have to manufacture synthetic oil would make more sense than using that same energy source to produce low EROEI crude oil that still has to be refined and shipped half way around the world.
That would depend on the oil yielded from the well vs. the energy value of the end product synthetic oil. X amount of renewables invested equally would give a Y number from one approach and a Z number from the other. The greater of Y or Z would be the way to go. I would only use renewables to do either one if a liquid high energy dense fuel was required such as jet fuel for defense. Otherwise I would just heat my home with wood as I am doing today.
$this->bbcode_second_pass_quote('', '
')
To produce that low EROEI oil or synthetic liquid fuel you will need a primary energy source. My preferred is breeder nuclear fission but the majority of the population is still scared to use it. No matter what source you end up using IMO crude oil from the ground will be less and less of the energy mix in the future than it is today.

Given the lead time to build out a generation of breeder reactors I expect to make do without them.
If there is less oil produced we will of course use less of it but it may hold it's share of the energy mix as the total energy extracted and used declines.
Gains in renewables may serve only to offset declines in coal and natural gas.
There is no guarantee that we will be able to produce and use energy at anywhere near current levels and on a per capita basis may already be going down.
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Re: $50 oil price unsustainable

Postby vtsnowedin » Sat 24 Jan 2015, 14:49:20

$this->bbcode_second_pass_quote('pstarr', 'B')iofuel and synthetic Fischer–Tropsch petroleum energy return is negative. Of course that doesn't really matter if the process is run on unobtainium or some other limitless fuel.

It is not that absurd. If you had a jet fighter and a thousand tons of coal you are grounded. Use the coal for Fisher- Tropsch process and make a tank full of jet fuel which has say a quarter of the energy value of the 1000 tons of coal and you will get about 1200 barrels of jet fuel. You now have air defense.
You have used three quarters of the energy to convert from solid to liquid fuel. This is an energy expensive process but might well be worth it if there are enemies about and they usually are.
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Re: $50 oil price unsustainable

Postby Pops » Sat 24 Jan 2015, 16:45:24

$this->bbcode_second_pass_quote('Tanada', 'S')ure, but as one of those who lost a job I happen to think I was pretty good at because of the crash after effects it is hard to see things that way.

My credit is also shot due to a call on my credit card when I was in the hospital, my income that years ('09) was around $12k before ss/medicare.

As I said, I ain't dead so am that much stronger.

:wink:
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Re: $50 oil price unsustainable

Postby DesuMaiden » Wed 04 Feb 2015, 18:05:14

In early 2015, the price of oil has surprisingly dropped down to only 50 dollars a barrel. Obviously this isn't sustainable, and it will only be temporary.
History repeats itself. Just everytime with different characters and players.
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Re: $50 oil price unsustainable

Postby Subjectivist » Sat 07 Feb 2015, 15:29:08

[img]
http://data.cnbc.com/quotes/CLH5/tab/2[/img]

I can't get the image to work but if you click on it the graph on CNBC should open up showing what appears to be the bottom of the oil price for WTI at least for now.
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