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OilmanBob-
Well, check out world fossil consumption figures. Demand was up 3.1 percent in 2004, then 1.8 percent in 2005, then 0.9 percent in 2006, according to EIA (at their website). And new technologies are just being implemented now. Higher MPG cars just now entering the US fleet of cars and trucks. I predict permanently declining demand for fossil crude in this price regime. US demand was down last year.
The average marginal cost of production a barrel of oil in 2003 was $3.57 a barrel, according to the EIA. Yet demand is falling already. It is true, at this price point, OPEC can cut production and make plenty of money, and in fact they say they are cutting production, willfully.
Peak Oilers know the real facts, and that is that OPEC is lying, to keep oil prices artificially low, and hide the truth that they are running out of oil to pump. Somehow this particular conspiracy theory doesn't make sense to me, and I like conspiracy theories.
I wonder if hedge funds, having gone long, have not planted a PR campaign to the effect that oil supplies are tight. The hedgies have billions of dollars at their disposal, and could hire websites and commentators at will. If you were long a few billion, would you not try to color the perception of oil scarcity?
The nomenclature of the oil world is increasingly hysterical.
You would not guess that fossil oil demand is nearly stagnant if not declining, and fossil crude prices well down from last summer's peak. Yet those are the facts, on a global basis.
But, hey, let's get on with the post-fossil world, I say the sooner the better, as a patriot and environmentalist. With PHEVs and biofuels, solar power plants and a thousand other steps big and small, I have little doubt we can get to a cleaner and more prosperous future. We are already headed in the right direction.
BenjamineCole, I certainly hope you are right about oil supplies, however, I don't believe it. The main reason is that Exxon, Shell,Conoco-Phillips ,Sunoco and Total are all investing billions in the Alberta Tar Sands and Four Corners Kerogen shales in the Green River formation(so-called oil shale). A little bit of arithmetic shows these sources cost $100,000.00 per barrel per day of level production in capital costs, plus another $20-$30 in production costs per barrel of synthetic crude. That's excluding transportation and refining costs.
While many nasty things can be said about big oil, they are not fools. If the world were'nt running out of cheap oil this would not make economic sense-who drills a million dollar well for 10 bbls./day of production? I've been in oil and gas exploration since 1976, believe me, those numbers don't fly because the flow rate must be good enough to pay the well out within 30 months and have a total return on investment of at least 4:1 to justify a new well in a development situation. Two years and 6:1 in a wildcat.
Of course the majors have different economics, they treasure a steady flow to keep their refinery and chemical operations working. But, watch what they do, not what they say.
As far as hedge funds being behind the peak oil folks, contact me, I'm very easily bribed!
All joking aside, the problem with any conspiracy is that most people can't keep their mouths shut. It's human nature. And especially the types that make up hedge fund cowboys-when they were all natural gas players at Enron, Dynegy and El Paso they all rolled over. But, this isn't glamerous or prooveable, just the truth. My personal psychological theory about "conspiracy theories" is that they are actually a form of denial, people are denying that real events are out of control so they blame a conspiracy, the Elders of Zion, the Illuminati, the Masons, the devil, Communists, The Government suppressing Aliens,Big Oil and OPEC.
...so they blame a conspiracy, the Elders of Zion, the Illuminati, the Masons, the devil, Communists, The Government suppressing Aliens,Big Oil and OPEC
I think Peak Oil conspiracy was started by the Amish.
:-)
Could be. My great-great grandfather was Amish, born in Lancaster County and left home in the turmoil after the Civil War to homestead in Nebraska.
I think it was the buggy whip manafacturers are behind it all.