No one is going to come to the rescue on the supply side -- and, of course, we remain stuck with an administration that doesn't believe in demand-reduction strategies.
As the Wall Street Journal (subs. req'd) reported in "OPEC's Lever Loses Its Pull on Oil":
Oil prices are hovering near historic highs, but consuming nations shouldn't expect quick relief from OPEC, the world's only source for big, quick supplies.
For several reasons, the Organization of Petroleum Exporting Countries has neither the clear leverage nor the inclination to open the spigots and drive down the price of crude, which jumped past $90 a barrel in intraday trading in New York last week for the first time.
This figure shows how little spare capacity OPEC has -- essentially none outside of Saudi Arabia, and the Saudis have no inclination to initiate a major price drop, especially since these prices do not appear to be destroying demand.
Moreover, the International Energy Agency (IEA) warned back in July that it saw "OPEC spare capacity declining to minimal levels by 2012."
And the WSJ notes no one outside of OPEC will be coming to the rescue either:
Saudi Arabia has little to fear from the world's other major producers, such as Russia, which in decades past have ramped up supplies in an effort to capture a greater market share. But at the moment, the world's major producers for the most part are already pumping flat-out.
"They have little competition from non-OPEC suppliers and few worries about losing market share," says Jeffrey Currie, senior energy economist at Goldman Sachs in London.
We cannot be far from $100+ oil.
This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.
Oil: enough energy to melt glaciers!
Comments
View as Flat
Zeus3732 Posted 12:19 pm
25 Oct 2007
http://www.marinelink.com/Story/Cuba+Drills+off+Florida+C ...
Your silence is deafening!
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GonzoDon Posted 2:28 pm
25 Oct 2007
Oh, please. The statistics show that improving U.S. auto fuel efficiency standards by just two lousy miles per gallon (2 mpg!!) would go farther to 'supply' our country with oil via the savings that would result than anything we could ever hope to pump out of ANWR.
So, forgive my 'tude, but I'll be damned if I'm gonna open up ANWR to oil drilling just so that a bunch of fat-assed, lazy Americans can continue driving their gas-guzzling Hummers and Yukons and Chevey Subdivisions around the bend to their local 7-11 for a midnight box of Pop Tarts.
When we take energy conservation seriously in the U.S. we can, maybe, maybe, begin considering which of our few remaining wild places we're willing to sacrifice on the altar of unbridled consumption.
But until then, I politely submit that all the Hummer drivers can go to hell. (Or to Iraq, in a noble and patriotic effort to secure Middle Eastern petroleum to feed their habit. Their choice, I guess: hell or Iraq. Curiously, though, I haven't seen many Hummer drivers in my neighborhood volunteer to go to either ...)
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ClimateCriminal Posted 6:51 pm
25 Oct 2007
October 2007 - EWG-Series No 3/2007
"This paper is one of many by authors inside and outside ASPO (the Organisation for the Study of Peak Oil) showing that peak oil is anything but a "theory", it is real and we are witnessing it already. According to the scenario projections, the peak of world oil production was in 2006."
http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_ ...
Supporting statement 1
World oil production is at its peak and set to fall 32% by 2020 as discoveries wane, said Ali Samsam Bakhtiari, a former executive of Iran's state oil company...,
"We don't know how far the price has to go for demand to begin to be dented; the normal economics don't work any more,'' Bakhtiari said at a lecture in Sydney, hosted by the Financial Services Institute of Australasia. "Is it $125, is it $150? I don't know. I don't think it can go much higher than $300.''..,
"I can see the peak very easily,'' Bakhtiari said. "In the short-term future production can only decline. It will not go up again because there's faster depletion in all these fields than new fields coming on stream.''..,
The Organisation of Petroleum Exporting Countries has a maximum production capacity of 31mn bpd, while non-Opec countries have a maximum of 50mn, Bakhtiari said.
"Neither of these two entities can today go above these capacity figures,'' he said. Saudi Arabia, which produces about 9mn bpd, is "struggling'' to keep up production, particularly at the Ghawar field, the world's largest, Bakhtiari said...,
Kuwait's Burgan field, Mexico's Cantarell field and the North Sea fields are already in decline, he said. Russia's production probably already peaked in September 2004, he said. Oil producers, including Russia, are overstating their output, said Bakhtiari...,
..,Bakhtiari, who publishes papers and lectures on the theory that global oil production is on the verge of imminent decline.
11 July, 2006
http://www.gulf-times.com/site/topics/article.asp?cu_no=2 ...
Supporting statement 2
This quote is from King Abdullah of Saudi Arabia : "The oil boom is over and will not return," then-Crown Prince Abdullah said in his address to the Gulf Cooperation Council in 1998. "All of us must get used to a different lifestyle." [Editor's note: The original version did not give the year in which Abdullah made this statement.]
The Christian Science Monitor: A tipping point in Saudi Arabia
http://www.csmonitor.com/2007/0815/p09s02-coop.html
Living in a world of a declining oil output with increasing demand and spiralling oil prices is clearly going to be dramatically different from living in a time where oil output was increasing, abundant and cheap. [paraphrased]
Lester Brown
Plan B: Rescuing a Planet under Stress & a Civilization in Trouble (2003)
Biofuels sound so environmentally friendly but sadly things aren't always what they seem, with their dreadful consequences, rainforest deforestation, rocketing food prices as foods are increasingly diverted for conversion into vehicle fuels and thereby result in worsening third-world starvation.
[the grain needed to make 25 US gallons of bio-ethanol is sufficient to feed one person for one year]
What does it all mean for the future?
If the US remains essentially an oil-based economy, the oil [which is increasingly imported] will increase the US dependence upon foreign oil supplies - not a good idea for security. It will discourage and therefore delay the development of renewable resources and the technologies to exploit them, which will ultimately be imported, when a home-grown industry would benefit the US economy.
When the effects of peak-oil begin to bite, energy costs will soar, severely impact the costs of transportation and manufacture, which are very likely to exacerbate the resultant US economy slowdown. Such a slowdown combined with high energy costs will substantially affect and hinder investment in new technologies and inhibit competition with the world market [China & India], who will have in all probability stolen a lead over the US in technological advances.
There is a huge amount of monies presently ear-marked originally for the questionable NASA manned Mars landing, this could be put towards better uses. Such as, if the US were to invest in the future by funding a series of research and development grants to industry for renewable energy sources, new transport technologies, increased energy efficiency and preparing for the inevitable decline in oil output. That way, the worst effects of the slowdown resulting from the passing of peak oil could be averted and the US economy could be given a substantial boost and move ahead. These new technologies would restore the US lead in technology, boost exports, reduce the trade deficit and could help benefit the US by helping reduce its dependence upon imported oil.
At the same time CO2 emissions could be reduced substantially. Which might just be quite a good idea!
----------------------------
Science - our understanding of nature and the universe, trumps everything - religion, politics!
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justlou Posted 10:35 pm
25 Oct 2007
If people are thinking that this is "good" then we have big problems. Is the media is helping to seduce people who are getting really bad mileage into thinking that this is "good". Are peoples' standards this low?
2. Canada tar sands. From my limited reading the exploitation of Canada's tar sands will result in environmental consequences far worse than drilling in ANWR. Yet, I have seen so little outrage compared with what happened with our stopping the drilling in ANWR. So what is up here? Are we going to burn Canada's oil without even stopping to consider and compare? Our national hypocrisy is flashing red here. Shouldn't we be organizing huge boycotts of the oil companies who will be importing this Canadian crude?
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amazingdrx Posted 11:02 pm
25 Oct 2007
Anyone prefer 60 cent per gallon equivalent electric powered plugin hybrids? To 4,5,6,7 ... dollar fossil or fuel farmed powered driving?
Nope. It's just not manly. If your gas guzzler does not spew GHG and take 100 dollar fillups, you're not a man. It's just that simple.
http://amazngdrx.blogharbor.com/blog
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Sam Wells Posted 1:44 am
26 Oct 2007
By corollary, restricting supplies of petroleum goods will be the driving force, rather than limiting the demand side - especially here in the US where the current administration doesn't have the political will to limit demand.
No problem there; I'm having a "no-duh" moment!
Many think that a free, unregulated market is the best solution. But has this Miltonian approach done any good? Not really.
But I'd be wary of bringing in a discussion of price, value, and spreads to explain the supply and demand issues. I don't think money means very much except for people on a limited budget (not to sound harsh). In terms of constant 1970 dollars we still enjoy fairly cheap gasoline and oil prices.
Plus, there are a bunch of factors other than just price. Commodity and spot markets control much of this, where oil prices are traded as an advanced form of gambling. And those markets are inherently psychological, responding to news of wars, outages, pirates, blown wells, new reservoirs, riots in Nigeria, company quarterly statements, and so forth. Some estimate that tensions in the Middle East caused a "fear premium" of perhaps $12 per barrel. None of that can explain supply-side prices as a matter of factual evidence - just fear and greed, mostly.
Finally, haven't you seen that the dollar is sinking in value relative to other currencies? That makes exports very attractive but is killing the US on the import side.
So the economics of the petroleum market is indeed complex and I'm no economist. Let's just say the the pricing issues are "irrational," and that the physical limitations on supply side will be the driving factor, not price. /sam
Onward through the fog
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GRLCowan Posted 3:14 am
26 Oct 2007
Will result? Going to burn? Will be importing?!?
--- G. R. L. Cowan, boron internal combustion fan
How shall cars gain nuclear cachet?
http://www.eagle.ca/~gcowan/boron_blast.html
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justlou Posted 3:45 am
26 Oct 2007
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odograph Posted 4:24 am
26 Oct 2007
Those of us open to this could do 32% standing on our heads (if we haven't already). The interesting thing to watch will be the cultural response, as actual decline is documented.
I've used metaphors like "this is a hill we can't see over" etc.
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Sam Wells Posted 4:41 am
26 Oct 2007
Most Americans have this boron-bizarre (sorry!) notion that Middle East oil is bad but US, Canada, and Mexico oil is OK. Except for tar sands from Canada, I guess. How ludicrous and sorry.
Onward through the fog
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GreyFlcn Posted 9:15 am
26 Oct 2007
Thats because it's not a graph of US oil use.
It's a graph of world oil use.
BTW, heard on the news today.
$92 dollars a barrel for oil.
Another report commenting that if we attacked Iran, we could expect it to go up another $20....
_
Get used to high oil prices?
Indeed.
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solar greg Posted 9:40 am
26 Oct 2007
If a special tax on gasoline were installed specifically to create a fund for homeowners and industries to be able to purchase solar water heaters, solar space heating systems, efficient PV, maybe even hybrid cars. If the monthly payments for the loan can be structured in such a way that they are equal or less than the energy savings, who wouldn't want to go green?The idea would be to start investing in the companies that already have products that can make us energy independent and reduce GHG.
It wouldn't even have to be too big, (we wouldn't want to add 5 cents to that midnight pop-tart).
Development of new technology would come automatically from the profits of these American companies who will also be able to compete internationally.
There are quite a few inventions out there waiting for investors. Investors won't invest unless there is a big enough market.
Nobody wants to pay more for gas, but if we don't start coming up with alternatives soon, the price will be a lot higher, in many ways.
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Zeus3732 Posted 9:58 am
26 Oct 2007
As for Iraq for oil, where's the US keeping all that oil that's tripled the price since March 2003? You just can't tell other people how to behave. Oh wait, you can with your activist judges who legislate from the bench. You guys sure are smart!
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amazingdrx Posted 1:04 am
27 Oct 2007
Know your free marketeer (like Brittainey was a mouseketeer)limboob catch phrases. Hehey.
I wonder if Scalia appointing the shaved chimp president was "activist"? Nope.
Stopping the recount was the first step in the great bushwacking of the US.
I wonder why the hypercar is not being rushed into production by some highly competitive auto manufacturer? Because the oil/auto industry is acting as a monopoly? With a lot of inside legal help from traitors like Roberts, Alito, and Scalia. Traitors to our constitution.
Traitors to real competitive capitalism. These corpoRATS prefer corporate feudalism.
http://amazngdrx.blogharbor.com/blog
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odograph Posted 1:31 am
27 Oct 2007
Nobel Prize-winning economist Joseph Stiglitz:
"America's energy policy has been based on 'drain America first'; as we have used up a significant share of our scarce oil reserves, the country has become poorer, even if GDP has done well."
So what exactly are you going to do, AFTER you drain ANWR?
(that's from an interesting article, on Why relying on GDP as a leading economic gauge can lead to poor decision-making.)
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GreyFlcn Posted 3:33 am
27 Oct 2007
When they are the ones interfering with the market the most with tax dollars.
http://greyfalcon.net/doonsbury.png
http://greyfalcon.net/fossiltaxes.png
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