Peak Oil Thread (1 Viewer)

[Don Solosan]

Buzz, you seemed to be wrapped a little tight on this. If you think the future looks bright, fine. Go with it. I won't make any more jokes about cornucopians.

p.s. When did I ever say that we're all going to die horribly?

 

[Jason L.]

There are a lot of illogical posts on this thread.

 

[mark alan]

The wonderful thread from 2005 that first opened my eyes, and got me really looking at our situation and the likely future of America and the world. The thing I learned after truly understanding peak oil was don't bother trying to convince other people about what is going on. $140/barrel oil, the ongoing collapse of the dollar and the world banking system, and still most people on this thread cannot see what is going on.

The next couple of years may very well be an eye-opening experience to a lot of people.

 

[Buzz Foster]

It may well be.

I'm not saying that we are going to have the bounty of the past, but the peak oil doomers certainly seem to be of the hard-core doom variety. And I'm not subscribing to that view.

 

[mylan]

Care to enlighten us? I am not cynical and I see it too, for some reason this one feels different from all the others and I welcome your view of it.
My thoughts are that either it will be back to normal albeit with higher prices for most all consumer goods or it will be a real ground breaking new reality.

.....or it could be that we are more in debt now than we've ever been and for the first time are being affected by the higher prices of gas, groceries, etc. electricity is next and God knows what else. Breaking ground on our dream house at the height of the boom in 2004 didn't help matters at all.

 

[Malcolm R]

It's just the Y2K-ers back again, wearing a new pair of shoes. :rolleyes

 

[Don Solosan]

So what's your explanation for the price of oil shooting through the roof in the past few years?

 

[Malcolm R]

Aggressive industrial economic growth in Asia. Lack of investment in production capabilities in oil producing countries. Increasingly inefficient production due to a return to nationalized oil industries in places such as Venezuela. Price gouging by OPEC. The war in Iraq (which removed a couple million barrels per day from the supply since 2003). Oil speculators (a recent development due to the "Enron loophole"). The weakness of the US Dollar...just to list a few.

There are lots of reasons, of which peak oil is but one unlikely (IMO) contributor.

 

[KurtEP]

According to this

The case for Congress to regulate oil futures markets - Jul. 7, 2008

article (among others), as much as 70% of the current oil trading could be speculators. That points quite strongly at speculators being a major contributing factor to the current price, if not the largest contributing factor.

As I've noted before, this looks like a classic bubble in many ways...

 

[Ed Moxley]

Watch at least a few minutes of this.........
The Energy Non-Crisis

 

[Lew Crippen]

Just a question—as I have no idea of the global issues, but the article that Kurt references mentions regulation by Congress and what I can’t figure out is, how regulation of US trading will do much to change a commodity traded globally?

Won’t speculators (if they are really a significant factor—something that the Fortune article states is not clear) just move to unregulated futures markets?

 

[KurtEP]

Well, from what I've read, a lot of the presumed speculation comes from places like large pension funds, hedge funds and investment banks. There are always ways around things, but the U.S. can have fairly long reach when it wants to. I'm sure that most of the investment banks and pension funds are within easy reach. Some of the hedge funds, perhaps less so. In any event, high prices impact all of the world, so other governments have an incentive to cooperate too. It would just take a certain amount of leadership to get it done.

Also, just idle speculation, but it seems to me that if some offshore group of speculators is attempting to drive up the price of oil dramatically, it presents a very serious danger to the U.S. as well as the world economy. While it's clearly not the same thing as terrorism, it certainly isn't a friendly act, and it is conceivable that the U.S., as well as some other governments, could see it that way and act accordingly.

EDIT: Of course, it is true that we don't KNOW that this is purely a speculative bubble, but a lot of evidence points that way. The supply is a bit tight, but it isn't tight enough to explain a doubling of the price of fuel.

 

[Lew Crippen]

I'm not sure that pension funds are in the business of speculation.

 

[ChristopherDAC]

Obviously you're not from Orange County!

 

[Don Solosan]

A list of oil producing countries that have peaked. This is patched together from two lists and there are some discrepancies on the dates.

1932: Japan
1955: Austria
1966: Germany
1970: Libya, Bahrain, Venezuela, Ukraine
1971: USA
1973: Canada, Malaysia
1976: Iran, Rumania
1977: Indonesia
1978: Brunei, Yemen, Trinidad
1979: Nigeria
1981: Tunisia, Tobago
1982: Chile
1983: Peru, Albania
1986: Cameroon
1987: Hungary, Netherlands
1988: Croatia, France
1991: Turkey, Indonesia
1992: Pakistan
1995: Syria, Egypt
1996: Gabun
1997: Italy, New Zealand
1998: Uzbekistan, Argentina
1999: Yemen, Colombia
2000: Australia, Great Britain
2001: Oman, Congo
2002: Denmark
2003: Norway, China, Mexico
2004: Qatar, India, Malaysia, Ecuador
2005: Thailand

Saudi Arabia's production is down to around 8.5 mbpd. They say they can raise production to former levels.
Russian production slumped in the first quarter of 08.

Of a 2006 list of 14 top oil producing nations that I found, 8 are on this list. The two top producers are Saudi Arabia and Russia.

 

[BrianW]

I'm all for making the futures market more transparent for reasons that are, well, reasonable. However, I believe that speculators are being wrongly vilified just so that the powers that be can appear to be doing something about oil prices. The simple fact is that speculators just don't determine market prices.

Furthermore, speculators honestly don't care which way prices go. A futures contract isn't like company stock that benefits its owner only if its value goes up. Speculators stand to gain (or lose) just as much money if prices fall as they do if prices rise. Bottom line, speculators are playing a completely zero-sum game that absolutely doesn't require you to pay higher prices at the pump in order for them to make a profit (or lose their shirts).


Additionally, I've heard proposals that would eliminate speculators from the oil futures market so that it would consist only of producers and consumers. I think this would be a huge mistake. Allowing speculators into a futures market -- especially a market with so few (and such huge) producers and consumers -- enhances liquidity, which actually serves to moderate market prices. Having speculators in a market is like having more people to buy from if you're a consumer, and more people to sell to if you're a producer. Without speculators competing with one another for the best deal, oil producers would pretty much be able to charge whatever the hell they want for a barrel of oil, because the few consumers there are must buy oil in order to continue doing business. And if a consumer (an airline, for instance) happens to go bankrupt, then the oil producers lose a large chunk of business that would hurt their bottom line. Having speculators in the market helps avoid these disasters by adding liquidity and competition for both producers and consumers. Indeed, the benefit of liquidity and market-force moderation is the very reason the futures markets were set up.


I fear we're looking for an easy fix that just doesn't exist. With all that's going on in the world, we have more than sufficient explanation for the high price of oil without resorting to the mob-mentality error of making scapegoats of oil speculators who are, in all probability, helping the situation.

 

[KurtEP]

There's never an easy fix to anything once it gets going. Reducing demand for oil in this country would be a big step forward. I actually think that this bubble could be a good thing if it gets the suburban middle class out of huge SUVs and Pickups and into smaller cars. That could have a fairly substantial impact on the market. However, it won't be good if it wrecks the economy or causes a bunch of bankruptcies in the transportation industry. We should not, and cannot, allow something like that to happen. This is especially true if my theory is correct, and the bubble is largely speculation driven. We need to be proactive in not allowing bubbles to start, because they do a lot of damage to the economy. Unfortunately, any market generated solution is by nature reactive.

 

[Philip Hamm]

If you hate your brain. That guy is a kook. Do a google search on his name for a trip to the absolute kookiest sites in Internet Kookland.

 

[Ed Moxley]

Ok, here's the Google page that comes up:
Lindsey williams - Google Search
I don't see anything "kooky" about it.
I would think that his sources (BP exec, etc) would be easy enough to check out, by someone with a little "pull", that can make those kinds of contacts. The average person isn't going to be able to call BP's headquarters, and talk to the top guys. In the very first link on the page, Hugh M. Chance, Former Senator of The State of Colorado, endorses him. Sorry, but I'm not going to take the time to look at every link.

Is it kooky because his findings are different from what we're being told, or because the findings aren't being published on the front page of every magazine and newspaper? What exactly is kooky about him? I'd like to know......

 

[Don Solosan]

I've read most of Lindsey Williams' book, and it's not a book full of facts and statistics like Matthew Simmons' Twilight in the Desert, but speculation and unsupported hearsay. It's not written in the style of a professional writer, but in the style of your conspiracy-oriented types. In the video, he claims that the price of gas could be below $1.50/gallon within a year if only the president, etc., would act. If he thinks that a super-giant oil field can be fully producing in only a year's time, he is sadly mistaken.

It's Williams' position that the government and industry are conspiring to raise prices to control people ("they even control what toothbrush you use" he claims), disregarding the fact that the 150-year history of oil in this country has been one of government and industry working together to keep oil prices artificially low to drive economic growth. So why have they suddenly changed their tactics?

This guy reminds me of reports that the Bakken tar sands formation contains enough oil to rival Saudi Arabia. Turns out that some geologist speculated unofficially on paper decades ago, and that speculation got turned into gospel truth for Bakken. There is no evidence to back him up, not even an unofficial report. He is not credible, in my opinion.