The Oil Drum had a few comments yesterday on $100 oil:
Today, someone in the NYMEX pit session paid $100.00 per barrel for front month crude oil. (Logical for it to happen during a TOD holiday short staff period). Despite the talking head rationale for today's $4 rally, the underlying reasons for the 8 year+ climb in crude are geologic in nature. $100 oil in itself is no big deal -- its 1% higher than $99 oil. But it serves as a milestone reminder that the future is likely to be less 'easy', and perhaps dictated by new rules. Questions abound: will high prices bring about more production? Will high prices begin a "hoarding" phenomenon among exporters and producers? Will $100+ oil spur energy alternatives with the scale and quality of energy dense crude oil? Is this even possible? Will society start to realize the dichotomy between natural capital and financial capital? Will $100 oil reduce demand in developing countries? Will OECD oil-importing countries (like the US) take the lead on changing the cultural carrot of consumption that drives energy use?
At some point sooner or later (and my guess is sooner), a shortage of oil or price spike is going to put a lot of pressure on politicians to take to relieve the pressure through policies that have disastrous consequences for the climate -- like liquefying coal. That will be one of the pivotal moments in determining the future of our climate. Let's hope some wisdom and sanity prevail.
Top 25 reasons to give a damn about climate change
Oil: enough energy to melt glaciers!
Cash for Clunkers brought us ... more clunkers!
Comments
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GreyFlcn Posted 3:42 am
03 Jan 2008
All this rhetoric about "energy independance" can't possibly apply to biofuels. There's just not enough raw material.
http://greyfalcon.net/biolimits.png
So the only real application is with "alternative oil"
http://greyfalcon.net/fossilenergy
http://greyfalcon.net/fossilenergy.png
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But frankly even if we did cut off all of our oil imports, they act like OPEC would suddenly roll over and die because they are getting slightly less than $100 a barrel.
They were fine with $10 a barrel just a few short years ago.
How much a dent do they really think we can make?
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But then again it's an emotional argument, not a rational one.
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GRLCowan Posted 4:22 am
03 Jan 2008
It also means new fossil fuel tax revenue from fuelling the vehicles that will run on that road, and new natural gas tax revenue from the gas distribution network that always instantly vasculates -- I don't think that's quite the word. Vascularizes? -- new subdivisions.
It is pernicious that so much of rule-makers' payoff from new roads and subdivisions depends on those developments' dependency on fossil fuels.
Ideally that fossil fuel revenue would not exceed what the government might earn on other means by which the citizens might propel the vehicles and have fires in the buildings.
We are far from that ideal now, but if fossil fuel prices stay high, perhaps government, eager not to choke off the income tax revenue stream, will perceive that it must take less from fossil fuel users, or perhaps even begin to subsidize them.
The instant fossil fuels begin to be subsidized, governments' effectiveness at inducing people to conserve them and substitute for them will undergo a step change from minus to plus.
Instantly it will begin effectively enforcing speed limits. Instantly it will find ways new nuclear plant construction can begin ~40 months in advance of the ~42-month approval process. Instantly it will learn to take the initiative in seeking out householders who would not, without help, insulate their leaky old houses: the day such a householder agrees to have this done, he will see people with tools doing it.
Several more things can be done -- including, of course, powerplants making boron for cars, and cars that can use it -- and when government no longer profits by preventing them from being done, many or all of them will take off.
How shall the car gain nuclear cachet?
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GRLCowan Posted 4:24 am
03 Jan 2008
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Pangolin Posted 4:27 am
03 Jan 2008
Please stick with the program and make up your projections out of thin air like everyone else.
The next thing you will be doing is pointing out that the reason there is climate change in the first place is that fossil fuels release more excess CO2 than the entire worlds ecosystem can absorb. I'm sure we can get more energy from limited patches of biofuels than current fossil fuels if we just twiddle the genes and feed the waste to cattle. You just multiply everything by the square root of negative one and the math comes out fine.
On a real note the "cost" of oil in "dollars" is irrelevant as Ben Bernake can double the amount of dollars in circulation by yelling down the hall to the computer room. The cost of oil needs to be marked to the equivalent cost in solar or wind megawatts installed. Given a marker like that we would soon discover that oil is a lousy deal energy wise.
I suck at that sort of math, help me out.
Put the Carbon Back
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GreyFlcn Posted 5:32 am
03 Jan 2008
Coal is Biomass.
So creating a gigantic scaled up industry for converting raw biomass into liquid fuels is tantamount to creating the same infrastructure needed for Liquid Coal.
http://greyfalcon.net/cellulosic
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Delay And Deny Posted 7:30 am
03 Jan 2008
http://www.bloomberg.com/apps/news?pid=20602013&sid=a ...
``Prices rocket up whenever you get negative news, but they don't go down by the same amount when there is positive news about supplies or the political situation,'' said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $4.5 billion energy company bond portfolio. ``The large number of investors turning to commodities as an asset class is certainly having an effect on prices.''
Typical bubble behavior.
My Log
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odograph Posted 8:05 am
03 Jan 2008
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Tasermons Partner Posted 8:30 am
03 Jan 2008
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Biodiversivist Posted 3:31 pm
03 Jan 2008
In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
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EliRabett Posted 12:18 am
05 Jan 2008
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amazingdrx Posted 2:51 am
05 Jan 2008
Producing all the energy with fossil fuel to make that happen quickly enough to be profitable, raises the GHG release manyfold, over simply burning coal, oil, or natural gas.
Turning the coal back into oil releases 5 times the GHG of just burning the coal. This is happening right now in Montana on a huge scale thanks to the boosterism of the democratic green governor.
Turning coal into biogas underground with bacteria is different. No additional energy is needed. That is the way to use coal and tar sand energy, as relatively clean natural gas. Leave the coal and tar mess underground where it has been for millenia.
http://amazngdrx.blogharbor.com/blog
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Ian Forrester Posted 3:06 am
05 Jan 2008
I think people are forgetting that coal contains a lot of methane adsorbed into its pore structure which gets released after mining and put into test tubes.
As for the bitumen, there was a report recently that reseachers at the University of Calgary have found bacteria which turn bitumen into methane. Sadly, very little experimental details were released but I very much doubt that such processes are viable.
There may be very low levels of microbially metabolizable compounds in the bitumen which could explain the low levels of methane observed. However, to expect large amounts of methane from such a process is dreaming in technicolour, IMO.
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amazingdrx Posted 4:27 am
05 Jan 2008
I'm not sure exactly the biochemistry involved, but I found the article about this research project on the net.
http://amazngdrx.blogharbor.com/blog
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amazingdrx Posted 4:34 am
05 Jan 2008
Nature's own DNA molecular engineering at work.
http://amazngdrx.blogharbor.com/blog
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Schoneveld Posted 5:21 am
05 Jan 2008
The same applies to oil shales (predominantly located in the US: Green River Formation) which are believed to contain double the amount of recoverable oil (some trillion barrels of oil).
So the high oil price has helped to basically more than double the world's economically extractable reserves (from about one trillion barrels to 2.5 trillion barrels, which would represent some 100 years of current production).
If you cannot place me in any box read my Bio.
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MarkUK Posted 5:45 am
06 Jan 2008
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Colin Wright Posted 4:27 pm
06 Jan 2008
A growth rate of 2.2% equates to a doubling of production in 70/2.2 = 35 years. So at this rate by about 2040 we could expect about 2 mbd. Now keep in mind that we can expect world oil production to drop by about 50 mbd by 2030, and you get some idea of the challenges ahead.
Incidentally, here is a French perspective on $100 oil. The first article hopes that expensive oil will bring more change to the environment than 30 years of environmentalism! The second article reminds of that it is the developing countries that are/will suffer the most:In 2005, at the G-8 summit, rich nations committed to reduce poor countries' debt by 50 billion dollars. Now, in 2006, the increase in the oil bill was already 10 times more than the debt reduction. Since, according to all forecasts, the world will have to live for a long time with expensive oil, it is urgent to envision not only transferring innovative technologies that will allow them to conserve energy to the poorest countries, but also supplying them with more financial aid.
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