$this->bbcode_second_pass_quote('TreebeardsUncle', 'L')ast Friday and this morning were great times to buy into oil stocks.
Have been taking advantage of it today.
Expect all these inflationary moves to lead to a big run up in commodities in price starting next spring.
True, it sets back competition from alt fuels.
The economy will be dealing with oil over $150/barrel within 2 summers after next.
g
PeakOil is You
This is it. It's all over. Thanks for all the fish
Re: This is it. It's all over. Thanks for all the fish
by AirlinePilot » Fri 17 Oct 2008, 02:02:38
Actually Tree I believe if this recession is deep enough and the credit issues are not resolved very quickly, we could see higher prices within 6 months to a year easily. Think collapsing production.
Yeah it can happen. Export reductions and hoarding is all it will take. Couple that with relatively cheap fuel right now and demand comes right back up again just about to where we were this time last year. It might not grow much, but at these lowering prices I'll bet you a bottle it recoups.
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Re: This is it. It's all over. Thanks for all the fish
by Gebari » Fri 17 Oct 2008, 03:41:19
If production fell from 87 mbpd to, say, 67 mbpd, due to a depression, and peak oil was previously 2 years away, the peak would be delayed by only 6 months or so. The crashing price would also suddenly make many of the more expensive oil projects, including things like biofuels (and renewables), uneconomical. The collapse of credit means that oil companies are having more difficulty financing new projects, equipment, labour etc too. It may make peak oil sooner and worse in the end.
Besides, this IS peak oil. Every oil price spike in history has led to a global recession, why would it be any different this time? Peak oilers have been predicting economic meltdown shorlty before or shortly after peak oil for years, including the collapse of credit. The soaring oil price was the trigger that burst the credit bubble.
We're in a brave new world now - the era of perpetual economic growth is over and the Great Decline is underway. It's all downhill from here.
Besides, this IS peak oil. Every oil price spike in history has led to a global recession, why would it be any different this time? Peak oilers have been predicting economic meltdown shorlty before or shortly after peak oil for years, including the collapse of credit. The soaring oil price was the trigger that burst the credit bubble.
We're in a brave new world now - the era of perpetual economic growth is over and the Great Decline is underway. It's all downhill from here.
The history book on the shelf, is always repeating itself.
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Re: This is it. It's all over. Thanks for all the fish
by Daniel_Plainview » Fri 17 Oct 2008, 05:46:25
Does anyone know what the current figure is for the global average cost of extracting one barrel of oil? Apparently, tar sands oil extraction cost can reach $70/bbl.
But what is the current global break-even price for light crude? There is, for example, this data:
Oil Break-Even Prices
Bahrain $40
Kuwait $17
KSA $30
U.A.E. $25
Oman $40
Qatar $30
oil sands $33 (Canada)
According to a September 2008 article,
$this->bbcode_second_pass_quote('', 'S')audi Arabia's Oil Minister Ali al-Naimi in March put the marginal cost at between $60 and $70 a barrel. Iran's OPEC governor Mohammad Ali Khatibi said some high-cost oil projects cost $70-$80 a barrel and if the price of oil continued to fall, investors would withdraw from them. Some analysts have said the marginal cost is higher. Investec Asset Management in a report saw it rising to more than $100 a barrel, given 20 percent cost inflation in 2008.
LINK
But what is the current global break-even price for light crude? There is, for example, this data:
Oil Break-Even Prices
Bahrain $40
Kuwait $17
KSA $30
U.A.E. $25
Oman $40
Qatar $30
oil sands $33 (Canada)
According to a September 2008 article,
$this->bbcode_second_pass_quote('', 'S')audi Arabia's Oil Minister Ali al-Naimi in March put the marginal cost at between $60 and $70 a barrel. Iran's OPEC governor Mohammad Ali Khatibi said some high-cost oil projects cost $70-$80 a barrel and if the price of oil continued to fall, investors would withdraw from them. Some analysts have said the marginal cost is higher. Investec Asset Management in a report saw it rising to more than $100 a barrel, given 20 percent cost inflation in 2008.
These estimates are all over the map, and I'm wondering if there is any solid data as to the average global marginal cost of extracting one barrel of light sweet crude?
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Re: This is it. It's all over. Thanks for all the fish
by RSFB » Fri 17 Oct 2008, 08:21:49
$this->bbcode_second_pass_quote('smallpoxgirl', '
')Right. The problem is that our economy can't sustain $150/barrel oil. So in the end it's what we've always said. Alternative energy, for the most part, isn't economically viable.
')Right. The problem is that our economy can't sustain $150/barrel oil. So in the end it's what we've always said. Alternative energy, for the most part, isn't economically viable.
Alternative energy isn't viable? In what way? It certainly is viable for electricity production in many places.
Our problems with energy wouldn't be anywhere near as big if we used more renewables and less personal transportation. The economy could work like that, the problem is convincing Americans to give up their SUVs and start investing in rail and buses.
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Re: This is it. It's all over. Thanks for all the fish
by smallpoxgirl » Fri 17 Oct 2008, 08:34:54
$this->bbcode_second_pass_quote('RSFB', 'O')ur problems with energy wouldn't be anywhere near as big if we used more renewables and less personal transportation. The economy could work like that, the problem is convincing Americans to give up their SUVs and start investing in rail and buses.
The problem is that much of our economy is dependent on burning fossil fuels. Even the relatively mild curtailment in fossil fuel use over the last year has thrown our economy into a tail spin. What happened in Spain this summer was a very clear example. High petroleum prices made fishing boats and trucking uneconomical. In one sense it's good in that we found out that we're wasting fossil fuels on these things and should reduce them. It's bad though, in that all those guys were struggling economically. Wasting fuel cruising around the Atlantic hunting fish was someone's job. They ended up going on strike and shutting the whole country down. They were striking for job security, but the only way that could happen is to find more fossil fuels to burn. Ultimately most jobs in the world today are significantly dependent on fossil fuel usage. The composite of all those jobs is the economy.
When you talk about alternative energy, you're really talking about infrastructure improvements. They're things that don't provide any particular benefit today, but would better sustain us in the long run. I think that in a contracting economy, it's very hard to sell people on the idea of giving up even more of the productive power of the economy so that it can be turned towards building infrastructure that won't provide any recognizable gain for years. Now you might argue that FDR did just that in order to pull the US out of the great depression. I think it's important to realize though that FDR didn't step into a contracting economy and implement the New Deal. By the time FDR came in, the economy had already contracted and found a base from which to expand again. Unlike 1929, this new contraction we're entering is fossil fuel driven. Fossil fuel production and availability is going to perpetually contract from here, and I don't think we're going to form a base and resurge like they did in the 1930s. I think that every time we try to form a base, it's going to be knocked down by lower oil supplies.
If people were willing to part with a significant chunk of the productive power of the economy right now, then maybe alternative energy would be possible. We could use the existing fossil fuels to build an alternative energy infrastructure that might be sustainable at least for a while. The truth is that in a contracting economy, people are already very distraught about the things they've already lost. No way are they going to willing to give up all the things they would have to in order to divert that much of the economy to building alternative energy. They're really not interested in making big new sacrifices. I think the truth is not some alternative energy powered utopia. The truth is that we're going to ride the petroleum pony straight into the ground.
Last edited by smallpoxgirl on Fri 17 Oct 2008, 08:58:47, edited 1 time in total.
"We were standing on the edges
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
Of a thousand burning bridges
Sifting through the ashes every day
What we thought would never end
Now is nothing more than a memory
The way things were before
I lost my way" - OCMS
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