 | Why wind needs feed-in tariffs (and why it is not the enemy of nuclear) | The Oil Drum | Saudi Arabia's Crude Oil Reserves Propaganda |  |
217 comments on DrumBeat: March 4, 2008
Comments can no longer be added to this story.
Show without comments | PDF version
217 comments on DrumBeat: March 4, 2008
Comments can no longer be added to this story.
Show without comments | PDF version
Search The Oil Drum with Google
Support The Oil Drum
Recently on TOD:World
TOD:Campfire
TOD:Europe
- Unique Times -- and the Future
- Peak Gold, Easier to Model than Peak Oil? - Part I
- Carbon Capture and Storage
TOD:Canada
- In this house, we obey the laws of thermodynamics!
- The Round-Up: October 24, 2008
- Compressed Air Energy Storage - How viable is it?
TOD:Australia/NZ
- The Bullroarer - Friday 27th November 2009
- International Energy Agency calls 'Peak' on OECD Oil Demand
- Australian Senate: Peak Oil motion defeated 31:6
TOD:Net Energy
Blogroll
Energy Sites
- The Coming Global Oil Crisis
- Die Off
- Dry Dipstick
- Energy Bulletin
- From the Wilderness
- Life After the Oil Crash
- Peak Oil Crisis
- Peak Oil News and Message Boards
- Powerswitch
- Rigzone
- Matthew Simmons
- Wolf at the Door
Environment & Sustainability Sites
- The Daily Green
- EcoGeek
- Eco Street
- Green Car Congress
- Green Options
- green.alltop.com
- Gristmill
- RealClimate
- Sustainablog
- Treehugger
- WorldChanging
Blogs
- Casaubon's Book
- Cleantech Blog
- Clusterf
k Nation (Jim Kunstler) - The Cost of Energy
- David Strahan
- Early Warning
- The Energy Blog
- European Tribune
- GraphOilology
- Health After Oil
- jeffvail.net
- Mobjectivist
- Peak Energy (Australia)
- Peak Energy (USA)
- R-Squared
- Resource Insights
Finance & Economics Blogs
- The Big Picture
- Calculated Risk
- The Crash Course
- Ecological Economics
- Econbrowser
- Environmental Economics
- Infectious Greed
- The Mess That Greenspan Made
- Mish's Global Economic Trend Analysis
Organizations
Peak Oil Primers
Beware email scams!
Beware email scams claiming to be from this site. We do not have any job openings. If anyone contacts you about a job at The Oil Drum, do not reply to them, and definitely do not give them any personal information or send them money. Read more here.
“If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack.”
—George Monbiot
User login
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
Personnel
- Editors: Nate Hagens, Gail the Actuary, Prof. Goose
- DrumBeat Editor: Leanan
- Contributors: ace, Engineer-Poet, Heading Out, jeffvail, JoulesBurn, Sam Foucher, Robert Rapier
- TOD:Campfire: Glenn, Jason Bradford
- TOD:Europe: Chris Vernon, Euan Mearns, Francois Cellier, Jerome a Paris, Luís de Sousa, Rembrandt, Rune Likvern, Ugo Bardi
- TOD:Canada: benk, Libelle
- TOD:ANZ: Big Gav, Phil Hart, aeldric
- Emeritus: Stuart Staniford
- Technician: Super G
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
It’s behind a pay wall, but the Wall Street Journal today on page C1 has a story entitled “Hard Assets an Easy Call?” containing charts of the run in oil and gold from 1978 to 1981, and then 2005 to 2008. The chart for the late 70’s shows a run-up, then sharp drop. The chart for 2008? No drop yet. But the title of the chart says it all: “Back to the Future.”
For those who are thinking that they have missed out on the oil bull market, I believe that this suggests that much of the “smart money” still believes that oil, and gold, will come back down, in the not too distant future. In other words, the piling-in hasn’t occurred yet.
There is a wonderful quote on page C2 from the Libyan oil minister; when asked if OPEC would stick to the status quo on production, he responded, “How can you do otherwise?” He tempered his remarks by saying that oil inventories were growing, but perhaps he was using “can” in the way my fourth grade teacher drilled us: “can” means having the ability; “may” indicates permission; “would” indicates intention. If OPEC could actually raise production, my teacher would have edited his comment to say: “Why would you do otherwise?” But perhaps not.
I note that Leanan has cited Nansen Saleri's piece on the op-ed pages of the WSJ. That is freely available. I think that the adage "you get what you pay for" applies.
Even CERA has only been bandying around 3-4 trillion, and we've all been considering that to be quite incredible. This must not refer to the planet Earth that actually exists, but rather to the SciFi one with the hollow core filled with abiotic oil.
Why stop at 2 out of 3? Why not assume that they can recover it all? We are in fantasyland here, after all.
One thing you will not find at all in this ridiculous article is any recognition that there is such a thing as EROI. Just how much energy does he think those advanced recovery techniques are going to require? (Answer: he doesn't think, and that's the whole problem with this article.)
Great news! Mr Saleri calls $100+ oil just a near-term obstacle.. You guys at theoildrum.com can obviously close shop now and we can all continue happy motoring for many decades to come!
I don't know what sort of drugs Mr. Saleri is ingesting to come up with those resource numbers, but if it makes your vision go that rosy, we could just distribute some of that stuff to make the problem go away.
And I thought CERA was insanely optimistic......
Lots of Acid and cheap Vodka
If you sift through all the spin and homage to The Holy Market, Saleri's article actually was kind of interesting. He's tacitly admitting we are already past Peak Cheap Oil - basically his supply argument is that there's a lot more $100+ oil than there was $20- oil. And his projected consumption increases run from 0% (i.e. we're already at peak) to 2% per year; is he assuming slow global growth, or increased global conservation/efficiency? His projection actually sounds like a more optimistic version of Stuart's bumpy plateau: we're already at an inflection point, where continuous increases in production are no longer possible, but we can still grow supply at a much slower rate and at much higher prices for a while longer.
Who saw Peter Jackson's King Kong?
I laughed the whole way through, it was just so completely over the top.. I haven't even stopped to decide whether it was a good movie or not.. it just made me giddy, running down a ravine under the legs of some great, stampeding Saurpods, because that was the safest place to hide from the Marauding Allosaurs..
Can a market economy really get powered by giddiness? 'You say there's less?! Well now, I'll tell you how there's really MUCH, MUCH more!!' Wow, what a feeling I get, just saying that out loud!
I guess my take-away is that it's easier to print an article that basically says YES, than one that says NO. I could keep saying NO, and not get heard (there's a place in the world for the angry young man), or I could find the YES component on my side of the court. Back to that Kayaking analogy.. focus on the water you want to ride, not the rocks you are trying to avoid.
"There's no greatness without audacity." Oscar Wilde
Bob
The old adage about reserves not being the same as production capacity remains true.
There are some projects booked, but not completed that will dissapoint. A case of one Australian project that dissapointed was published by the U.S. EIA:
"In July 2006, Woodside brought online the Enfield project. However, while the project was planned to have reached 100,000 bbl/d, output peaked at just 74,000 bbl/d, before dropping to 10,000 bbl/d due to water and sand in one of the main wells. Woodside has estimated that production from Enfield will average 50,000 bbl/d throughout 2007."
Numerous projects are years late, over budget, and might not produce as much as planned. Some oil companies faced higher government taxes and tarrifs, derivatives losses, and rising production costs. Venezuela and Ecuador have been leaning more towards Marxist policies stiffling foreign investment there. It is probable nationalized oil holdings there might not be able to retain enough internal capital to generate investment needed for large scale expansions. These companies were being tapped as sources for funding everything else the people needed.
As one should beware of becoming biased, this is the other side of the Australian oil story from the United States EIA:
Australia produced more than 562,000 barrels of oil per day in 2006. (EIA)
"In 2008, BHP Billiton has plans to bring online its Stybarrow field (80,000 bbl/d), while Woodside is planning to bring its Vincent field (100,000 bbl/d) online. In addition to new projects, Santos increased production at its Mutineer-Exeter project by drilling the first of three new wells on the fields. The first well increased production by 20,000 bbl/d to 55,000 bbl/d. Once all three wells are drilled, the Mutineer-Exeter project is expected to have production levels between 70,000 bbl/d -90,000 bbl/d."
In addition to its bumper wheat crop Australia might see its oil position improve in the near future.
The WSJ (Wall Street Journal) has a Forum page for responses to the outrageous Saleri piece at http://forums.wsj.com/viewtopic.php?t=1638&
I encourage someone with more command of the facts than myself to submit a response there.
Question: Why is Mr. Saleri spreading such nonsense and misinformation? Who gains? All I can figure is that oil companies stock prices will remain high if investors don't understand that oil companies will be under stress to maintain production.
It all seems very similar to how tobacco companies attacked science on smoking, and then oil companies attacked the science on global warming.
Why? It is pretty well known that one thing the Saudis (and remember that Saleri worked (works?) for ARAMCO) really fear is that oil importing nations will get really serious about conservation and renewables, and thus permanently reduce the demand for and drive down the price of their exports. Thus, anything FUD they can spread to discourage investments from being made in renewables & conservation, so much the better for them.
In other words, this piece is pure propaganda & disinformation.
So much for the reputation of the paper that printed it.
Please let us not descend into another disgusting greed fest over how to profit on the misery and death of others.
Money = energy.
Those with more of it than they possibly need, and/or who are relentlessly pursuing more ARE THE PROBLEM.
it's been debated here in the past but the basic gist is this. money != energy because money is a poor measure of energy.
Money is a representation of stored energy and resources.
And money is a poor measure of those energy and resources, but that's what we tend to use in the practical, day-to-day world.
Is it just me, or are other people absolutely sick of the "speculators have unreasonably driven up oil" articles. Hey big guy, stop typing and put your money where your mouth is. Go open a commodities account, and short oil back down to its "reasonable" 60 dollar level (or was it 30 dollars, I can't ever keep track). This is a once in a lifetime opportunity!!!. Think how much money you'll make. Put $7500 down, and reap 44,000 in profits--why not buy twenty? In fact, it's such a sure thing that you probably don't even need a cash reserve, because there's absolutely no way these insane prices could possibly go higher, right? Either put up or STF up! --rant over, thanks for listening
I think the whole "It's the speculators' fault" mantra rather ammusingly ironic. For several years now, there's been chanting about the need for more investment in oil and gas. Well, that's what's happening; it's just that the "investing" isn't in material infrastructure, etc., for the most part. My observation is that hot money will go where it can make the greatest, quickest return. But the Dotcom and Housing Bubbles weren't scarce commodities rapidly being consumed by "real" economies on growth tears, which makes the commodities boom qualitatively different from others as there are REAL limits on resource quantities. In this regard, I think it would be of more than mere interest to also display the price of coal underneath oil.
Yes, the massive influx of investment capital into the oil sector does press the question as to why the oil industry is not taking advantage of that capital to actually invest in new megaprojects? Isn't it about getting to be "put up or shut up time"?