OT: Here're the savings from Arctic drilling — 75 cents a barrel

[Ron Ruff]

On May 29, 10:13 pm, [email protected] wrote:
> Oil is expensive now, and it's going to
> stay that way. .... etc, We won't be able to
> make up the difference with oil sands, old wells, or by squiggling
> pipes into the far reaches of depleted reservoirs. So it would seem
> your assumptions about the economic risks of developing remaining
> reserves from PB are not tenable. Just do the math.

Please!!! How did we go from oil that was profitable to extract and
sell for $15 a barrel to needing to get $100+ a barrel all of a
sudden? This isn't a price increase that relates to any sort of
reality regarding extraction costs. And trust me... if the everyone in
the industry was secure in the knowledge that the price would stay so
high, they'd invest and find ways to suck out every bit of oil they
could get. We would also see huge investments in alternative energy.
Unfortunately, people in the industry aren't sure the price will stay
up, because they know there is no natural reason for it... so I don't
expect much to change.

> It's typical that we Americans want to blame everyone but ourselves
> for the problems we brought down onto our own heads as exceptional
> consumers and ignoramii.

Americans seem pretty ignorant as a rule, but I can't see how the
average consumer is the slightest bit responsible for the high price
of oil... anymore than they were responsible for the *low* price of
oil in most of our history. Who's fault is it that a cartel is able to
control the price of oil?

I would have favored a high *tax* on fuel to promote conservation,
smaller vehicles, and alternative energy development... like in most
of the civilized world. But it ain't the US publics' fault that this
hasn't happened. And it wouldn't have effected the current oil price
BS anyway... we'd just be a little better prepared.

 

[[email protected]]

On May 29, 10:55 pm, Ron Ruff <[email protected]> wrote:

> Please!!! How did we go from oil that was profitable to extract and
> sell for $15 a barrel to needing to get $100+ a barrel all of a
> sudden? This isn't a price increase that relates to any sort of
> reality regarding extraction costs.

Nobody is claiming that the price of oil futures contracts is somehow
directly linked by wire to exact field conditions or supply and
demand. The price relates to a lot of crazy **** which has nothing to
do with the physical reality of oil. The relative worth of the dollar,
flight of investor capital out of stocks, etc. The price represents
the point where there are an equal number of buyers and sellers, where
every person who believes the price will rise from there is matched
with someone who is willing to bet the price will drop from there. The
market is ultimately down to human perception of traders then, and
perception has changed drastically in the past few years. There's your
answer. A lot of people have done the math.

There is a lot of uncertainty but reality as well behind the
perception. Observable facts. There are no facts to support the notion
that oil producers currently have the ability to ramp up production at
will at volumes sufficient to meet growing demand, but choose not to
use it. It seems more likely that they don't possess the magic power
to do that anymore due to the physical realities of oil extraction.

> And trust me... if the everyone in
> the industry was secure in the knowledge that the price would stay so
> high, they'd invest and find ways to suck out every bit of oil they
> could get.

Why do you think that's not happening? Oil extraction has never been
as profitable as it is right now.

> We would also see huge investments in alternative energy.

Retarded congress mandates investment in a bad idea, corn ethanol,
that only digs our energy hole deeper. When Senators can get rich and
reelected on alternative energy we will see significant investments in
it. This will come as the average American's perception of the dilemma
catches up to the traders'.

> Unfortunately, people in the industry aren't sure the price will stay
> up, because they know there is no natural reason for it... so I don't
> expect much to change.

A lot of people expect the price might drop back into the 80$ range --
and resume rising from there with more fundamental support. A lot of
people have expected that to happen since around January, and it never
did. People just shrug and wait. Uncertainty and volatility rule the
day. But almost nobody who knows anything about this expects oil to
see 50 ever again. The concept of the price of oil as 'cyclical' that
was until recently a common refrain from oil execs (in their role as
glorified PR-spewing figureheads) is now obsolete. You won't hear it
again from them. Things have changed. Production plateaued, demand
didn't. Supply and demand are like two dancers, twisting and twirling
apart, reaching for each other, losing contact, reaching, drifting,
maybe never to touch again.

> Americans seem pretty ignorant as a rule, but I can't see how the
> average consumer is the slightest bit responsible for the high price
> of oil... anymore than they were responsible for the *low* price of
> oil in most of our history. Who's fault is it that a cartel is able to
> control the price of oil?

If we're getting our nutz twisted by OPEC, or by geology that we don't
understand, it's nobody's fault but ours. First of all, in a very
abstract sense, just because they're selling it doesn't mean we have
to buy it. A huge percentage of American petroleum consumption is
completely frivolous. Stop drinking the koolaid if you don't like the
taste. Ride a damn bike. People sit there at the pump with the hose
stuck in their truck, basically shooting dollars straight to Iran,
putting a down payment down on another centrifuge or something, so
they can drive in a rolling house to the dog park and the Sonic, and
the whole time *****ing about OPEC or George Bush? Doesn't make much
sense. Look in the mirror.

Americans, currently and historically, use vastly more petroleum per
capita than any other humans on the planet. We represent just a
fraction of the world's population but account for one quarter of
total daily oil consumption. Many people may not realize that the US
is the third biggest oil producer in the world, behind Russia and
Saudi Arabia, though we produce about half as much as we did 35 years
ago. But is it enough to be the world's third largest oil producer?
Hell no. All of US domestic production currently satisfies less than
half of the country's appetite for petroleum. Less than half. And yet,
if our huge deposits were located in some other country we would
probably have sent the marines in long ago. Why is our oil under their
sand, Ron?

Yes I would say the typical American consumer bears responsibility for
the current predicament in more or less direct proportion to their
outsized oil consumption. The irony is that while we drove world
petroleum consumption for so long, it may now be too late for the US
to control its energy destiny, as demand is now being driven by China
and India and short of a profound and severe lifestyle transformation
here we won't be able to counter it. What kind of prices will bring
about a severe and profound transformation here in the US?

Robert

 

[[email protected]]

On May 28, 4:13 pm, "Sandy" <[email protected]> wrote:

> As I said, you must be from Houston, and relying on paper, not having been
> on site.
>
> If you bring sea water directly into contact with the recoverable base, it
> quickly becomes unrecoverable.

Well, somebody'd better tell the Saudis, who are injecting millions of
barrels per day of piped seawater into their oil fields as we speak.
Does this mean you are from Houston?

 

[Tom Kunich]

<[email protected]> wrote in message
news:[email protected]...
>
> Seems pretty simple to me too. Oil is expensive now, and it's going to
> stay that way.

Just want to record that.

 

[Ron Ruff]

On May 30, 1:11 am, [email protected] wrote:
> On May 29, 10:55 pm, Ron Ruff <[email protected]> wrote:
> The
> market is ultimately down to human perception of traders then, and
> perception has changed drastically in the past few years. There's your
> answer. A lot of people have done the math.

Traders who know or suspect that a fix is in the works that will
create the current price bubble... which will pop if/when the fix is
broken.

> There are no facts to support the notion
> that oil producers currently have the ability to ramp up production at
> will at volumes sufficient to meet growing demand, but choose not to
> use it. It seems more likely that they don't possess the magic power
> to do that anymore due to the physical realities of oil extraction.

The reality is that there were *no* rapid or unusual increases in
demand, so pretty much anybody with decent knowledge of the situation
could have predicted what would have been necessary to meet it.

> > And trust me... if the everyone in
> > the industry was secure in the knowledge that the price would stay so
> > high, they'd invest and find ways to suck out every bit of oil they
> > could get.
>
> Why do you think that's not happening? Oil extraction has never been
> as profitable as it is right now.

It takes time to develop. No good reason spend the money until you
*know* the price will be high enough.

> But almost nobody who knows anything about this expects oil to
> see 50 ever again. The concept of the price of oil as 'cyclical' that
> was until recently a common refrain from oil execs (in their role as
> glorified PR-spewing figureheads) is now obsolete. You won't hear it
> again from them. Things have changed. Production plateaued, demand
> didn't. Supply and demand are like two dancers, twisting and twirling
> apart, reaching for each other, losing contact, reaching, drifting,
> maybe never to touch again.

This is an important point that you seem to be not seeing... the cost
of this or any commodity will naturally be a little bit higher than
the cost of production... IF, the environment is competitve. Supply
and demand issues sink to almost zero chance when the demand part of
the equation is so steady and predictable (as it is with world oil).

Of course, the world oil situation is not competitve at the present,
since production is controlled by powerful cartels... so creating a
shortfall in the absence of alternatives, results in the oil price
going as "high as the market can bear". The only reason anyone could
have for expecting the price to settle at $50-$80 is because this is
the range where sufficient alternatives become attractive. So
basically they are assuming that the cartel will *not* be broken, and
will retain control over the oil supply. If the cartel *is* broken the
price will certainly go below $50 since there are several decades
worth of oil that can be extracted for far less than that.

> Why is our oil under their sand, Ron?

Because... it *has* been the cheapest source of energy (by far). It
would have been economic suicide to develop and use a more expensive
source. Besides that, SA was effectively controling the price by
pumping enough to meet demand.

> What kind of prices will bring
> about a severe and profound transformation here in the US?

$4 a gallon gas hasn't changed peoples habits much as far as I can
tell... and since I don't expect fuel prices to go higher (at least
for long), I wouldn't expect much in the long term. Maybe they will
buy hybrid SUVs now...

It is also good to remember that people in China and India are less
able to afford expensive gas than we are. When the price spiked in '80
world demand dropped quickly... and I expect something similar to
happen now. Yes, with a global economic downturn as well. But by then
the people who have orchestrated this price hike will have made their
billions and trillions... a major success. I prefer to blame the folks
who have the means and will to cause something like this to happen,
rather than the hapless propogandized consumer.

 

[Clive George]

"Ron Ruff" <[email protected]> wrote in message
news:[email protected]...

>Of course, the world oil situation is not competitve at the present,
>since production is controlled by powerful cartels... so creating a
>shortfall in the absence of alternatives, results in the oil price
>going as "high as the market can bear". The only reason anyone could
>have for expecting the price to settle at $50-$80 is because this is
>the range where sufficient alternatives become attractive. So
>basically they are assuming that the cartel will *not* be broken, and
>will retain control over the oil supply. If the cartel *is* broken the
>price will certainly go below $50 since there are several decades
>worth of oil that can be extracted for far less than that.

Imagine I'm an oil producer. Even in the absence of a cartel, where's my
incentive to pump sufficient to lower prices? I know my reserves aren't
finite, and that I will sell them all eventually. If I and all my
competitors pump loads more, our profit margins go down - so I've got a
really good reason to not do that.

It's not like cell-phones or cars - with them, there's a limited demand
which means there is an incentive for the manufacturers to cut prices to
increase market share. With oil, there is a market stretching out for the
forseeable future - there's no incentive at all for the producers to lower
prices.

I don't think there needs to be your cartel for the price to stay up. The
market for oil is massively in favour of the producers - there's no need for
them to work together to make the prices go up, they can just sit back and
watch it happening anyway.

cheers,
clive

 

[still just me]

On Wed, 28 May 2008 13:37:30 -0700 (PDT), Ron Ruff
<[email protected]> wrote:

>On May 28, 1:30 pm, still just me <[email protected]> wrote:
>> You expect to win the lottery too? Don't look for any major breakdown
>> of the cartel any time soon.
>
>Well... I don't know exactly *why* SA broke the cartel from '80 until
>very recently, and I'm not certain why they stopped, either. But I
>have a feeling that it all has something to do with powerful
>influences in the US... and if we are lucky a new administration might
>not be so easily bought. Should we allow a group of countries/
>companies to get together set their own price for a very important
>commodity and manipulate the global economy at will?

I agree. The current neo-con administration is best friends with
certain folks and refuses to play hardball. Note that the
administration has continued to sell military and other
hardware/services to SA without restraint and in fact with vigor -
despite the fact that they are screwing us. If there is no downside
for them, they might was well keep our feet to the fire.

>Lower prices will always bring more business so long as you can supply
>the product. That is why prices tend to fall to close the cost of
>production in a competitive situation.

But when competitors collude, there's no competition. Witness the
current situation.

 

[Ron Ruff]

On May 30, 1:45 pm, "Clive George" <[email protected]> wrote:

> Imagine I'm an oil producer. Even in the absence of a cartel, where's my
> incentive to pump sufficient to lower prices? I know my reserves aren't
> finite, and that I will sell them all eventually. If I and all my
> competitors pump loads more, our profit margins go down - so I've got a
> really good reason to not do that.

There is none... but in a competitve environment this would not be an
issue. You don't pump more *because* you want to drive the price down.
You pump because the price is high enough that you can make a good
profit. The market will naturally set a price that is a bit above the
*cost* of production. This cost will increase as the easy-to-get oil
runs out, but not at a great rate. We currently have several decades
of oil reserves in the world, and this is if they don't find any
more... and they always do. The price of oil right now is ~10 times
the cost of production. There is no way this is a natural phenomena
that would have any way of persisting without market control and
manipulation. If you believe that either a) there is no cartel
control, or b) the cartel will soon be broken... then short oil
stocks... you will make a lot of money.

 

[[email protected]]

On May 30, 3:35 pm, Ron Ruff <[email protected]> wrote:
We currently have several decades
> of oil reserves in the world, and this is if they don't find any
> more... and they always do.

Again, this is irrelevant. The question is only can 'they' pump it out
as fast as we can burn it. 'They' have to replace 4mbpd of losses from
existing fields each year, just to stay even with flat demand. But
demand isn't flat, and exports are decreasing even while overall
production struggles to maintain a plateau.

I don't know where your assumptions come from. 'They' don't always
find any more. 'They' haven't found a million bpd producer in over 30
years. 'They' will not find another Cantarell or Prudhoe Bay.

 

[[email protected]]

On May 30, 1:33 pm, Ron Ruff <[email protected]> wrote:
> On May 30, 1:11 am, [email protected] wrote:
>
> > On May 29, 10:55 pm, Ron Ruff <[email protected]> wrote:
> > The
> > market is ultimately down to human perception of traders then, and
> > perception has changed drastically in the past few years. There's your
> > answer. A lot of people have done the math.
>
> Traders who know or suspect that a fix is in the works that will
> create the current price bubble... which will pop if/when the fix is
> broken.
>
> > There are no facts to support the notion
> > that oil producers currently have the ability to ramp up production at
> > will at volumes sufficient to meet growing demand, but choose not to
> > use it. It seems more likely that they don't possess the magic power
> > to do that anymore due to the physical realities of oil extraction.
>
> The reality is that there were *no* rapid or unusual increases in
> demand, so pretty much anybody with decent knowledge of the situation
> could have predicted what would have been necessary to meet it.
>
> > > And trust me... if the everyone in
> > > the industry was secure in the knowledge that the price would stay so
> > > high, they'd invest and find ways to suck out every bit of oil they
> > > could get.
>
> > Why do you think that's not happening? Oil extraction has never been
> > as profitable as it is right now.
>
> It takes time to develop. No good reason spend the money until you
> *know* the price will be high enough.
>
> > But almost nobody who knows anything about this expects oil to
> > see 50 ever again. The concept of the price of oil as 'cyclical' that
> > was until recently a common refrain from oil execs (in their role as
> > glorified PR-spewing figureheads) is now obsolete. You won't hear it
> > again from them. Things have changed. Production plateaued, demand
> > didn't. Supply and demand are like two dancers, twisting and twirling
> > apart, reaching for each other, losing contact, reaching, drifting,
> > maybe never to touch again.
>
> This is an important point that you seem to be not seeing... the cost
> of this or any commodity will naturally be a little bit higher than
> the cost of production... IF, the environment is competitve. Supply
> and demand issues sink to almost zero chance when the demand part of
> the equation is so steady and predictable (as it is with world oil).
>
> Of course, the world oil situation is not competitve at the present,
> since production is controlled by powerful cartels... so creating a
> shortfall in the absence of alternatives, results in the oil price
> going as "high as the market can bear". The only reason anyone could
> have for expecting the price to settle at $50-$80 is because this is
> the range where sufficient alternatives become attractive. So
> basically they are assuming that the cartel will *not* be broken, and
> will retain control over the oil supply. If the cartel *is* broken the
> price will certainly go below $50 since there are several decades
> worth of oil that can be extracted for far less than that.

I don't know anybody expecting the price to settle anywhere. The
expectation was for the price to dive maybe 20% and then resume
climbing at its now familiar startling rate. The recent spike was in
that respect unexpected and has created a lot of uncertainty about
what will happen in the immediate future. But there is something
approaching consensus on the long term outlook, which is that we have
entered a new supply paradigm.

> It is also good to remember that people in China and India are less
> able to afford expensive gas than we are.

They are shielded from price spikes by government subsidies. The govts
are then hurt by spikes but China anyway has a mountain of dollars to
play around with.

> I prefer to blame the folks
> who have the means and will to cause something like this to happen,
> rather than the hapless propogandized consumer.

I think we usually prefer to blame someone other than ourselves.

Whether the price is due to geology or OPEC/Cheney conspiracy, it
ultimately doesn't matter much what the reason is. The price is the
price. American consumers don't really have a leg to stand on when it
comes to spewing blame around on this particular issue.

 

[Ron Ruff]

On May 31, 3:07 am, [email protected] wrote:
> Again, this is irrelevant. The question is only can 'they' pump it out
> as fast as we can burn it. 'They' have to replace 4mbpd of losses from
> existing fields each year, just to stay even with flat demand. But
> demand isn't flat, and exports are decreasing even while overall
> production struggles to maintain a plateau.

If production truly is struggling (and I don't believe it is) then it
will be very temporary. What is limiting the ability to extract it
fast enough? Isn't it merely a matter of drilling more wells and using
advanced technology? The only thing I can think of is that the price
of oil has been so low until recently that the only the cheapest
sources were tapped. That situation will be corrected if the price of
oil stabilizes at a high value.

> I don't know where your assumptions come from. 'They' don't always
> find any more. 'They' haven't found a million bpd producer in over 30
> years. 'They' will not find another Cantarell or Prudhoe Bay.

They always have. Size doesn't matter... the overall quantity matters.
The same rumors were running around 30 years ago... we were running
out of oil, and the world was coming to an end. It didn't happen then
and it isn't happening now...

 

[Sandy]

Dans le message de
news:dff88da7-305b-4ab7-a504-f0d4426550c1@i76g2000hsf.googlegroups.com,
Ron Ruff <[email protected]> a réfléchi, et puis a déclaré :

>
> If production truly is struggling (and I don't believe it is) then it
> will be very temporary. What is limiting the ability to extract it
> fast enough? Isn't it merely a matter of drilling more wells and using
> advanced technology?

Actually, once you have a producing well (field, more correctly), you have
to deliver crude. That is not a simple task. If you have access to a
pipeline, you will have to schedule the deliveries _in_ _concert_ with other
users of that facility, with the refineries or ports or tank farms where it
will be delivered, and not exceeding those combined capacities. If it is
not a pipeline, but barges or railroad cars, you have to have a supply of
them, also scheduled. In all these cases, clockwork precision is necessary
and not realistic. Forecasting between producers and delivery systems is
essential and generally coherent. However, it's a tough task to plan
exactly on refinery shutdowns, barge decomissioning, tanker failures,
weather interruptions, political obstacles, pipeline failures, etc.

For those who think supply and demand are located in an ideal universe, they
ought to think about all the potential glitches that may just influence that
flow. Use electricity as an example, the next time you experience a bulb
blowing, a fuse panel tripping, a feed line frying, a transformer exploding,
a substation shorting, etc., etc., etc. It just ain't quite so simple as
some would have you think.
--
--
Sandy

" La France est un pays extraordinaire, on sème des fonctionnaires...il
pousse des impôts "
- Clémenceau

 

[Ron Ruff]

On May 31, 12:08 pm, "Sandy" <[email protected]> wrote:
> It just ain't quite so simple as
> some would have you think.

I didn't mean for it to sound terribly simple... like all massive
enterprises a lot of elements need to come together for things to move
smoothly. That is one reason why it takes *time* to exploit new
resources... you can't just decide to pump oil out of your new field
tomorrow because the price of oil jumped up today.

 

[Tom Kunich]

"Ron Ruff" <[email protected]> wrote in message
news:dff88da7-305b-4ab7-a504-f0d4426550c1@i76g2000hsf.googlegroups.com...
>
> They always have. Size doesn't matter... the overall quantity matters.
> The same rumors were running around 30 years ago... we were running
> out of oil, and the world was coming to an end. It didn't happen then
> and it isn't happening now...

When I was in the first grade we had an engineer from Standard Oil come to
our class and give a talk. He said that by the year 1970 we would be running
out of oil. That was circa 1951.

Now we know that there are large fields VERY deep that can be extracted but
expensively. We also know that we have huge resources of tar sands and oil
shale as well. What's more the natural gas sources show no signs of letting
up.

And of course we could generate huge amounts of electricity from nuclear
energy if the "Environmentalists" weren't blocking it.

 

[[email protected]]

On May 31, 9:12 am, Ron Ruff <[email protected]> wrote:

> If production truly is struggling (and I don't believe it is) then it
> will be very temporary. What is limiting the ability to extract it
> fast enough?

To repeat myself yet again: the limits on the ability to extract it
fast enough are 1) the physical limits of oil extraction 2) dearth of
new discovery 3) ongoing massive and irreversible declines from
existing fields, 4) increasing consumption/decreasing exports of oil
producing nations and 5) demand increases from developing nations.

Production of every oil field on the planet follows a bell curve. It
goes up, it peaks, it comes down. That's how it works. As time goes on
field pressurization drops and water cut increases; it takes more
energy to get less and less oil. When most of the largest fields of
the world are in the decline phase it puts a huge damper on the
ability of oil producers to meet growing demand with new sources. New
sources produce far less oil for the same dollar/unit of energy than
they did in the past. Why? Because the easy oil has already been found
and pumped and burned, and is not being replaced by other sources of
easy oil. That's because there isn't any. Believing otherwise is
simply delusional.

There is not another Saudi Arabia out there, hiding, just waiting to
be found. Even if 'they' were to locate a new million-barrel-per-day-
producer like Cantarell, which seems exceedingly unlikely at this
point, 'they' have to find the equivalent of about 4 of these every
year just to make up for existing declines. Try to get at least
slightly realistic about this.

> Isn't it merely a matter of drilling more wells and using
> advanced technology?

Nooo!!!!! Oil isn't produced by the abstraction of economics. Drilling
more wells and advanced technology allows oil producers to more fully
develop a field and extract more of what's there, but it doesn't
change the basic reality that oil production from any single reservoir
follows a bell curve. Advancing extraction tech hastens the peak and
accelerates the decline rate as it produces more recoverable barrels.
The only reason that a few of the big oil fields in the world do not
seem to be in decline yet is because they were so huge in the first
place, or development of them was delayed. But depletion will be
reality for every field in production, if production continues.

Read this on the development of Saudi Aqbaiq field:

http://tinyurl.com/6op9em

Also scroll down to see an animation of drilling over decades in a
portion of Ghawar, to see how vastly intensified drilling effort often
corresponds to flat or decreasing production.

> They always have. ...

What is this 'always have?' That is more of a religious belief than
anything based on observable facts. The fuel oil industry is only 150
years old. There is no 'always' about it. Your religious belief about
the magical powers of oil producers has no grasp of the historical big
picture. Let's look at a small slice of it again: Between 1950 and
1970 ten fields that would produce at least 600k barrels per day were
discovered. Since 1970, despite vast increases in exploration, only
three such fields have been discovered. I believe each of these was
discovered in the 1970s. Of fields producing over one million barrels
per day (only a handful of these have ever been found) the youngest on
the planet is Cantarell, Mex., discovered in 1976. Cantarell, a
critical source of supply to the US/world, is now in precipitous
decline, its depletion about to take Mexico over the cliff to importer
status. IOW, there will soon be no more oil available for export from
the youngest former one-million-plus bpd field in the world. You're
talking religious belief and all I'm asking is for you to do the math.

The oil is not 'running out.' That's a ridiculous canard. Oil reserves
will never 'run out.' What's running out is oil available for export
to oil-importing countries and ability to match global demand. Fact is
oil producers are producing more oil today than has every been
produced before. The problem is it's not enough, and few with any
knowledge of the subject believe that 'they' will be able to squeeze
out more than a few million barrels more per day than they are right
now. Meanwhile, as if that weren't enough, the reality of depletion of
giant fields and slowing discovery rates means that the world is
poised to start heading down the backside of the global *production*
curve. So, Houston, we have a few large problems overlaid on each
other to create one big bad hairy problem, Houston.

 

[[email protected]]

On May 28, 9:22 pm, Ron Ruff <[email protected]> wrote:
> On May 28, 3:07 pm, [email protected] wrote:
>
> > Do really believe that Bush/Cheney/?? and the Saudis intended for
> > American consumers to pitch in and buy the Iranians a nuclear program
> > and unprecedented regional influence and power?
>
> So long as it pays well... and fits the "plan"...

Do you also believe that the complete loss of respect for the
administration and the destruction of the political influence of the
people known to be involved and everyone getting run out of town on a
rail was also part of the plan? I seriously doubt it. I think the
plan, whatever it was, has gone badly awry.

I suspect regaining control over the price of crude was one of the
reasons behind the planned invasion of Iraq, as KSA's days appeared
numbered as the US's big gas station in the sand. Perhaps regime
change in Iran was part of the plan that started with what was assumed
to be an easy takeover of Iraq. If crude was going to spike they
certainly didn't and don't want the Iranians to benefit from it. Which
means whatever target Iran already had on its back gets bigger and
brighter in direct relation to the price of oil.

 

[Ron Ruff]

On May 31, 3:57 pm, [email protected] wrote:
> To repeat myself yet again: the limits on the ability to extract it
> fast enough are 1) the physical limits of oil extraction 2) dearth of
> new discovery 3) ongoing massive and irreversible declines from
> existing fields, 4) increasing consumption/decreasing exports of oil
> producing nations and 5) demand increases from developing nations.
>
> Production of every oil field on the planet follows a bell curve. It
> goes up, it peaks, it comes down. That's how it works. As time goes on
> field pressurization drops and water cut increases; it takes more
> energy to get less and less oil. When most of the largest fields of
> the world are in the decline phase it puts a huge damper on the
> ability of oil producers to meet growing demand with new sources. New
> sources produce far less oil for the same dollar/unit of energy than
> they did in the past. Why? Because the easy oil has already been found
> and pumped and burned, and is not being replaced by other sources of
> easy oil. That's because there isn't any. Believing otherwise is
> simply delusional.

I don't believe otherwise. I believe that the cost of extracting oil
will increase... in a rather consistent and predictable fashion. Of
course the cheapest sources will be tapped first... but we are not
close to running out. 8 years ago we were able to supply the world
profitably at $15 a barrel. I'm totally fine with supposing that it
will cost more now... but nothing near $100 a barrel.

> There is not another Saudi Arabia out there, hiding, just waiting to
> be found. Even if 'they' were to locate a new million-barrel-per-day-
> producer like Cantarell, which seems exceedingly unlikely at this
> point, 'they' have to find the equivalent of about 4 of these every
> year just to make up for existing declines. Try to get at least
> slightly realistic about this.

They have found 40 years worth at the present time. It is merely a
function of what it costs to extract it... which is way under $100 a
barrel.

> What is this 'always have?' That is more of a religious belief than
> anything based on observable facts. The fuel oil industry is only 150
> years old. There is no 'always' about it.

Nothing religious about it. We have 40 years of oil reserves in the
world. It has never been more than this in the history of oil.

> Your religious belief about
> the magical powers of oil producers has no grasp of the historical big
> picture. Let's look at a small slice of it again: Between 1950 and
> 1970 ten fields that would produce at least  600k barrels per day were
> discovered. Since 1970, despite vast increases in exploration, only
> three such fields have been discovered.

Once again, I am not impressed by the lack of huge easy fields where
the oil just jumps into the tanker. Oil will not be $10 a barrel
again... it will take a bit more effort to supply world demand. But
the only reason for it to settle over $30 in the next couple of
decades is if the market is manipulated and controlled.

 

[Ron Ruff]

On May 31, 5:39 pm, [email protected] wrote:
> Do you also believe that the complete loss of respect for the
> administration and the destruction of the political influence of the
> people known to be involved and everyone getting run out of town on a
> rail was also part of the plan? I seriously doubt it. I think the
> plan, whatever it was, has gone badly awry.

I don't. It didn't take much intelligence to predict the downside (if
you'd asked me 7 years ago I could have told you) and I believe that
there are many more intelligent and better informed persons than me
advising the administration. There was no way there would be a
democracy in Iraq or Afganistan. In Iraq they seemed to go out of
their way to create chaos. I'm amazed that it took so long for public
opinion to turn sour. No, they got what they were after... so
basically look at what they got and still have and will continue to
have, to determine what the motive was. It wasn't in the US public
interest, I assure you.

 

[[email protected]]

On May 31, 10:03 pm, Ron Ruff <[email protected]> wrote:
> On May 31, 5:39 pm, [email protected] wrote:
>
> > Do you also believe that the complete loss of respect for the
> > administration and the destruction of the political influence of the
> > people known to be involved and everyone getting run out of town on a
> > rail was also part of the plan? I seriously doubt it. I think the
> > plan, whatever it was, has gone badly awry.
>
> I don't. It didn't take much intelligence to predict the downside (if
> you'd asked me 7 years ago I could have told you) and I believe that
> there are many more intelligent and better informed persons than me
> advising the administration. There was no way there would be a
> democracy in Iraq or Afganistan. In Iraq they seemed to go out of
> their way to create chaos. I'm amazed that it took so long for public
> opinion to turn sour. No, they got what they were after... so
> basically look at what they got and still have and will continue to
> have, to determine what the motive was. It wasn't in the US public
> interest, I assure you.

I'm not naive enough to think democracy was intended for Iraq or
Afghanistan. I'm also not naive enough to think things are currently
working out as planned.

 

[[email protected]]

On May 31, 9:55 pm, Ron Ruff <[email protected]> wrote:
> On May 31, 3:57 pm, [email protected] wrote:
>
>
>
> > To repeat myself yet again: the limits on the ability to extract it
> > fast enough are 1) the physical limits of oil extraction 2) dearth of
> > new discovery 3) ongoing massive and irreversible declines from
> > existing fields, 4) increasing consumption/decreasing exports of oil
> > producing nations and 5) demand increases from developing nations.
>
> > Production of every oil field on the planet follows a bell curve. It
> > goes up, it peaks, it comes down. That's how it works. As time goes on
> > field pressurization drops and water cut increases; it takes more
> > energy to get less and less oil. When most of the largest fields of
> > the world are in the decline phase it puts a huge damper on the
> > ability of oil producers to meet growing demand with new sources. New
> > sources produce far less oil for the same dollar/unit of energy than
> > they did in the past. Why? Because the easy oil has already been found
> > and pumped and burned, and is not being replaced by other sources of
> > easy oil. That's because there isn't any. Believing otherwise is
> > simply delusional.
>
> I don't believe otherwise. I believe that the cost of extracting oil
> will increase... in a rather consistent and predictable fashion. Of
> course the cheapest sources will be tapped first... but we are not
> close to running out. 8 years ago we were able to supply the world
> profitably at $15 a barrel. I'm totally fine with supposing that it
> will cost more now... but nothing near $100 a barrel.
>
> > There is not another Saudi Arabia out there, hiding, just waiting to
> > be found. Even if 'they' were to locate a new million-barrel-per-day-
> > producer like Cantarell, which seems exceedingly unlikely at this
> > point, 'they' have to find the equivalent of about 4 of these every
> > year just to make up for existing declines. Try to get at least
> > slightly realistic about this.
>
> They have found 40 years worth at the present time. It is merely a
> function of what it costs to extract it... which is way under $100 a
> barrel.
>
> > What is this 'always have?' That is more of a religious belief than
> > anything based on observable facts. The fuel oil industry is only 150
> > years old. There is no 'always' about it.
>
> Nothing religious about it. We have 40 years of oil reserves in the
> world. It has never been more than this in the history of oil.
>
> > Your religious belief about
> > the magical powers of oil producers has no grasp of the historical big
> > picture. Let's look at a small slice of it again: Between 1950 and
> > 1970 ten fields that would produce at least 600k barrels per day were
> > discovered. Since 1970, despite vast increases in exploration, only
> > three such fields have been discovered.
>
> Once again, I am not impressed by the lack of huge easy fields where
> the oil just jumps into the tanker. Oil will not be $10 a barrel
> again... it will take a bit more effort to supply world demand. But
> the only reason for it to settle over $30 in the next couple of
> decades is if the market is manipulated and controlled.

I've explained many reasons why this talk of reserves is practically
meaningless. I guess you will just go on believing what you need to
believe.