it appears as supply issues get more an more apparent the Saudi's are slowly easing people into awareness.
They've reduced their cushioning from 20 years now to 10-15 years.
next I guess we'll see is the cushion being reduced to 10 years or less then finally to "oops, we've peaked, can't say we didn't warn you"
PeakOil is You
Saudi Arabia admits 4.5 MB/d shortage
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by Cynus » Thu 07 Jul 2005, 13:00:42
How could they be "unable to meet projected western demand"? Economists have promised me that as demand goes up prices will go up and so demand go down. So if oil gets scarce, its price will go up and demand for it thus go down. Likewise, contrary to appearances, the Easter Islanders never ran out of trees because as trees got scarce, the price for them went up, which curbed demand. In this way, economists promise, it is impossible for anything to ever "fail to meet demand." Could it be that they were lying to me all along? 
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Cynus - Tar Sands
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by Ardalla » Thu 07 Jul 2005, 15:26:10
$this->bbcode_second_pass_quote('', 'T')hey believe Opec could produce the 44m b/d the world would need if consumers adopted efficiency measures under discussion by governments in the US and Europe
. Why is the ability to produce tied to 'efficiency measures' adopted by consuming nations? It makes no logical sense. Who are the 'European officials' they speak of, and would they have really made such a silly remark? I think not.
$this->bbcode_second_pass_quote('', 'A')t today's prices, the world will need the cartel to boost its production from 30m to 50m barrels a day to 50m by 2020 to meet rapidly rising demand, according to the International Energy Agency, the energy watchdog for consuming countries
What does 'today's prices' have to do with a boost in production? The world will need an extra 20mbd from OPEC by 2020, and the price does not seem to be relevant to production unless they are assuming demand destruction caused by higher costs. If that is the assumption then they should at least mention it in passing.
I can't make any sense of the statement "the world will need the cartel to boost its production from 30m to 50m barrels a day to 50m by 2020". The article says 44mbd will be needed from OPEC; and then it says 50mbd by 2020. ???
This article reads like it was written by a couple of high school kids doing summer work for a media outlet.
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Ardalla - Peat
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by darren » Thu 07 Jul 2005, 16:11:03
$this->bbcode_second_pass_quote('Cynus', 'H')ow could they be "unable to meet projected western demand"? Economists have promised me that as demand goes up prices will go up and so demand go down. So if oil gets scarce, its price will go up and demand for it thus go down. Likewise, contrary to appearances, the Easter Islanders never ran out of trees because as trees got scarce, the price for them went up, which curbed demand. In this way, economists promise, it is impossible for anything to ever "fail to meet demand." Could it be that they were lying to me all along?
It is indeed impossible for any market to fail to meet demand, although people very very often misunderstand what economists mean when they say that.
'Unable to meet projected demand' really means 'unable to meet projected demand AT CURRENT PRICES'.
Let's say there's only one consumer (the US) and only one producer (the Saudis) for simplicity.
The US says "if the price is $50/bbl next year, we'll want 10m bbl/day".
The Saudis say "no force on Heaven or earth will allow us to produce more than 7m bbl/day next year. We will fail to meet demand". (assume this is correct)
The obvious implication? The price is going to be a lot higher than $50/bbl next year. The price will be whatever it needs to be to scale demand back to 7m bbl/day (think about it, people will bid up the price of oil UNTIL THAT BECOMES TRUE).... and so the Saudis *will* be able to 'meet demand' after all. Of course "meeting demand" does not necessarily mean "meeting demand at a price that does not cause you hardship", but no economist anywhere has ever said it did.
Trees weren't traded on markets... economists have nothing to say about them.
Economists have a lot to answer for, but they are nowhere near as foolish as most people on this site seem to think they are.
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darren - Peat
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by smiley » Thu 07 Jul 2005, 16:17:35
OPEC has been pretty quiet lately. It's freaking me out.
I'm starting to long back to the "We can deliver 16 mbd in a year" statements. Or the "we will raise production next month" announcements.
You know it is all bogus, but in a strange way these bold statements were kind of reassuring. Perhaps it was because it left the door open for a little bit of doubt, like "perhaps we're wrong in calling the peak and OPEC can stretch it for a decade or so".
With the latest IEA and DOE warnings and OPEC, the last bastion of optimism, faltering, there remains little room for doubt left.
I'm starting to long back to the "We can deliver 16 mbd in a year" statements. Or the "we will raise production next month" announcements.
You know it is all bogus, but in a strange way these bold statements were kind of reassuring. Perhaps it was because it left the door open for a little bit of doubt, like "perhaps we're wrong in calling the peak and OPEC can stretch it for a decade or so".
With the latest IEA and DOE warnings and OPEC, the last bastion of optimism, faltering, there remains little room for doubt left.
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smiley - Intermediate Crude
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by Ardalla » Sat 09 Jul 2005, 02:03:38
Yes. I agree. And the 16 mbd figure is often put out with no explanation as to what they are really saying. Is it 16 mbd of mostly high sulfur/heavy crude? Is it 16 mbd with 3-4 million being pumped from above ground storage tanks?. You would think the media would ask hard questions to pin down the answers. The Saudis promise us 'plenty of oil' and then it turns out to be oil we don't want. Then they say hey that's your problem; we said we had plenty.
I think Western officials trust the Saudis because they don't want to face the possibility they've been lied to. If Saudis have been lying, then it's new ball game. Let's keep playing the old game as long as we can.
I think Western officials trust the Saudis because they don't want to face the possibility they've been lied to. If Saudis have been lying, then it's new ball game. Let's keep playing the old game as long as we can.
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Ardalla - Peat
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by Pops » Sat 09 Jul 2005, 09:56:52
$this->bbcode_second_pass_quote('smiley', ' ')
You know it is all bogus, but in a strange way these bold statements were kind of reassuring. Perhaps it was because it left the door open for a little bit of doubt, like "perhaps we're wrong in calling the peak and OPEC can stretch it for a decade or so".
You know it is all bogus, but in a strange way these bold statements were kind of reassuring. Perhaps it was because it left the door open for a little bit of doubt, like "perhaps we're wrong in calling the peak and OPEC can stretch it for a decade or so".
Yes!
I feel like my mind understands PO and some of the ramifications but until it is reality there is always the possibility we are all just playing the Peak Oil computer game.
Here is what I don’t understand about this report, if they are going to be 4.5 short in 10 years does that mean they will meet demand in the ninth year or does it mean they will be .5 short next year?
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)
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Pops - Elite
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