It's The Oil Stupid

[Guest yobob1]

Try to imagine Western civilization with an increasing demand and a declining supply of oil. Everything that happens in our economy is dependent on oil one way or another. Hundreds of millions of years of dying dinosaurs gave us a virtual fixed supply of petroleum. It is becoming increasingly apparent that we may be approaching the peak of global oil production. In only 100 years we are starting to run out of dinosaur carcases. Oil may have been the "blow-off" top of Western civilization.

 

As fields age their production declines. It can be boosted by steam or NG injection, lateral drilling or other methods, but the bottom line is production will decline in a field as it ages. In the meantime few additional reserves are being discovered, and most pale in comparison to previous discoveries. All this is against a backdrop of increasing demand from emerging countries and little if any reduction in demand by Western civilization. At the very least, new oil is likely to be considerably more expensive to produce.

 

There currently is no known replacement for oil. Solar, wind, NG, nuclear, etc., may carry the ball on the electrical side of the eqaution for a while, but we don't have enough of anything else we can put in the tanks of jets, cars or boats. Nor do we have anything we can substitute as a base for plastics or any of the other miriad of applications that oil has been put to.

 

Fuel cells? Bogus as an alternative. They require hydrogen which is either produced and consumed in it's pure form or stripped off of a petrochemical at the point of use. Perhaps fusion could provide the kind of power necessary to create sufficient quantities of hydrogen, but we appear to be decades away from fusion being a reality and even then you're talking enormous logistical problems in infrastructure and vehicles.

 

This article below adds some surprising evidence of production decline. Now I don't know if the author is on the right track or not since I believe that oil consumption is down and the reduced production at least partly may be the result of pricing efforts. None the less, at some point in time soon global oil production will peak and then begin it's inevitable decline. It does not appear to me that we have any ready substitues. Say hello to the New Dark Ages in more ways than one.

 

Has OPEC Production Peaked?

 

Contrary to almost all conventional wisdom I do not believe that OPEC producing countries are sitting on billions of barrels of easily exploited reserves that they can "turn on" at a moment?s notice. There is growing evidence that OPEC is struggling to maintain current production levels even at today?s high prices. While reading the October 14, 2002 issue of the Oil and Gas Journal I found some very interesting production and pricing information in the Statistics section.

[MaxxPain]

The OPEC production decrease probably means their quotas are working. The incentive to cheat would tend to be lower if everyone thought prices will be higher in the future. Leaving the oil in the ground may be the best possible investment. If I had to choose between oil or the Ass N Pee 500 as a buy and hold investment for the next 10 years, I'd take the OIL. At least the oil would likely retain its value after inflation.

[Drano]

As far as needing to use oil to power passenger cars, Brazil has been quite successful with their ethanol-fueled vehicles. That is certainly a renewable alternative for that application. Jet fuel -- I doubt that ethanol will cut it for things like that that need a more "dense" fuel. However converting the world's automobiles to ethanol-burners would significantly lower the usage of oil. Which is why I expect that big oil will continue to fight such a strategy.

 

On occasion I have read articles about ethanol-powered vehicles, and they always seem to find some hapless consumer who expresses fear about driving around with a tankful of highly flammable liquid. Well, DUH! I guess that person must never see a movie or TV with the usual scene of a car going over a cliff and bursting into flames.... (which, OT, surprisingly often happens BEFORE the moment of impact -- LOL)

[Hypertiger]

Good of you the bring up this piece of the puzzle

 

 

The Good old days in California...

 

Basically Oil and energy is one of the ways the Powers that be maintain control/enslavement.

 

There is currently not enough Natural Gas to fill the pipelines in North America...

 

Some people have talked about the coming energy crisis, but it is already here... 2003 will be worse... Does anyone think for a second that our masters care about us? Well they don't, they have nothing but contempt for us and the world economy is about to collapse. Nobody even has the slighest clue what is coming. RIGHT NOW IS THE TAIL END OF THE GOOD OLD DAYS. We're not going to recover from here period. The truth of the matter is being suppressed. plain and simple... To those that say "Oh no, not another doom and gloomer." I don't care because it 's too late to try and save you, or convince you... You either wake up or don't. Billions of people will have to be liquidated to maintain control/power... Billions.

 

You know "the final solution", well it is always the solution in the end... Kill or be killed. economically or physically that's whats in store for us... Do you honestly think that they didn't see this coming for decades? They have been laying the ground work and implementing plans for years. Jigs up. An because I know where we are headed I am able to stay 1 step ahead of it. I have a big head start... But where do you run when they impose martial law? Don't worry it's coming. Less than 1 year left of "the good old days", and less than 2 years left untill the realization of the masses that it was all a fantasy ha ha ha ha fools... It is amazing that each and every day the population of the world is kept busy constructing the gallows that will be used for their own destruction.

[ThorAss]

I saw a piece on CNN int'l about how Merkins are buying Hummers big time. Average owner male 41 salary $215,000 /year. Can anyone say penis extension. 12 miles to the gallon. What a great vehicle for the coming storm. Most of these guys are going to be so emasculated they'll never get it up anyway. No matter, they'll never keep up the payments. Imagine the resale value if gas (when you can get it) is $5 /gallon and jobs are scarce.

Maybe Honda Civic's will shrink again.

[Drano]

I posted this on Torah Man's M2M substitute thread because I didn't remember that this was the place for it -- too many threads on two boards to remember what's where. So if it looks familiar you're not going insane, you did see it once already.

 

In the effort to reduce oil consumption some churches have been saying "What Would Jesus Drive" as a way of discouraging SUVs.

 

From L.A. Times syndicate:

"San Francisco Chronicle columnist Scott Ostler theorized that Jesus would tool around in a vintage Plymouth because 'the Bible says God drove Adam and Eve out of the Garden of Eden in a Fury.'

 

And our research department uncovered several other divinely approved autos. For example, in Psalm 83, the Almighty apparently owned a Pontiac and a Geo. The passage urges the Lord to 'pursue your enemies with your Tempest and terrify them with your Storm...' [note from Drano: I'd be terrified to DRIVE a Geo Storm.]

Another scripture indicates that Yahweh favored Dodge pickup trucks. Moses' followers are warned not to go up a mountain until 'the Ram's horn sounds a long blast.'

 

God also owned an AMC vehicle. In the book of Exodus he promised to 'send the Hornet ahead of you to drive the Hivites, Canaanites and Hittites out of your way.'

Some scholars insist that Jesus drove a Honda but preferred not to discuss it. As proof, they cite a verse in St. John's gospel in which Jesus tells a crowd, 'For I did not speak of my own Accord.'

 

Debate continues over whether the Lord's Honda had bumper stickers that said, "Honk if you love me" or "This is my beloved son, in whom I am well-pleased because he was an honor student at Galilee Elementary School."

 

Meanwhile, Ostler has discovered another transportation-related scripture: Moses rode an old British motorcycle, as evidenced by a Bible passage declaring that 'the roar of Moses's Triumph is heard in the hills.'"

[SkiddMarket]

We already have the technology to build a breeder reactor, which produces more fuel than it uses (I believe there's one at Savannah River operating right now). Back when I was in college, the nuclear engineering folks spoke of the days soon ahead when electricity wouldn't even be metered (little did they know that they were right, but only about long-distance telephone service). Once you have unlimited cheap power, you have unlimited hydrogen from the electrolysis of water. Your fuel can be made right at the gas station instead of being transported.

 

As long as energy is cheap, nuclear power will not be politically acceptable. Just because the public is afraid of something doesn't mean their fear is justified (look at the hubbub regarding genetically engineered vegetables or gamma ray sterilized foods). When the lights start going out beggars won't be choosers.

[chiefywiefy]

First I'd like to thank yobob for his insights here at the stool. He is much underappreciated and is the reason I subscribed to the anals. I went back to work a few weeks ago after a 5 month medical leave and have read several posts and topics in between work and sleep that I have wanted to respond to except time has not permitted. It's unbelievable how much work interferes with your life. Anyway, I was reading Machineheads topic Fed to market: deflation will not be tolerated on LOB and thought I was on Yobobs site (you guys do feed off each other so well and add so much info its the best tag team here) and I realized that we have got to get more people here or at least let Yobob know how much he means to Capitalstool. So I'm going to ramble here but don't worry, it won't be a Barester ramble

In one of Yobobs' topics the subject of AG being a modern day John Galt was discussed.The incongruities of what he has written in the past do not match his current actions. http://www.321gold.com/fed/greenspan/1966.html As recently as a few months ago (I wish I could find the link) AG stated he would not change a word of that paper. Interesteing. What I also find interesting is that we have Dean Kaman (ginger AKA the Segway inventor) stating that he has perfected the Sterling motor into a device that will filter 10 gallons of water and simultaneously providing enough electricity to run a few basic appliances. This would have a tremendous impact on third world countries. A motor that would change the world. What book did I read that in? Also, I live down the street from Dean Kaman's business places so if anyone has questions on this I would be glad to try to get an answer for you. But I do know that if he says he has the prototype and that it works and is commercially viable, then he has it.

 

What hasn't been discussed is "free trade". Is that the ultimate oxymoron? Let's look at "free trade" has done to our electronics industry. Oh... we don't have one anymore. Let's look at what happened. We have Japan that has a closed market. Japanese manufacturers are free to produce TV's without being subjected to foriegn competition. (i'm going to make up profit and margin #'s, but you'll get the drift of my point). So, the Japanese can break even when factories run at 60% and TV's sell for $300 in Japan. From this point on the next incremental TV produced costs $50 as all overhead is paid for by Japanese consumers. The next TV only costs parts and labor. Every incremental TV is shipped to the US and sold below cost for US producers causing them to fail. Why was it you could buy a camera in NY city for $100 less than in Japan? And you still had shipping costs associated with it from sending it half way accross the world. Electronics, autos, steel: we have given away our mfg base by ruthless foriegn govts. What good is "free trade" now? We have let them destroy what we produced. We have nothing to trade.

[Flaming Turds]

Wow lots to respond to...

 

YB I read that one and it is probably accurate. I dont think world consumption is down. At any rate we are approaching the fall off on the back side of the curve rapidly. We should see pump prices grind higher unless demand does drop off due to say a bank closure or two.

 

Drano: In california gasoline is soon to contain around 10% ethanol. Ethanol is expensive to produce. 76 has been using ethanol for quite some time instead of MTBE. The others are phasing it in now. BP and Chevron will be sharing a rail link here in San Diego where their ethanol will be delivered. They cant run it down the pipeline or mix it ahead of time. The Kinder Morgan facility will probably be trucking it in. 10% adds up to a whole lot of ethanol.

 

Hyper: Can I be in your pirate gang and go marauding with you?

 

Thor: Theres a Middle Eastern guy here that owns a few gas stations and he has one of those new hummers. One of his stations got shot up after 9-11 and I asked him if his hummer was bullet proof...he said no but everyone keeps asking him that lol. Those hummers are like Urban Assault vehicles.

 

Drano: What Would Satan Drive I wonder hehe.

 

Skidd: When the lights went out here we just built more gas fired plants! Doh!

 

Chiefy: We have a Sony TV plant right here in San Diego that makes most the tubes for the continent. They ship to mexico to be assembled and then come back. Sansui assembles their Tvs in the US. People are always saying we dont manufacture things here. Its not true. We just dont own any of it. LOL.

[Guest yobob1]

Breeder reactors are one posssible stop-gap measure to get to fusion. Of course once you have virtually unlimited electricity then hydrogen becomes viable.

 

There are several problems with this however. One is money and the second is time. How long does it take to get a breeder reactor up and running? I would bet that a "fast-track" approach including regulatory approval, engineering and construction would still take over a decade.

 

Where is the money going to come from? Who would be willing to step up to the plate and finance the hundreds of reactors it would take to produce enough hydrogen to provide the transportation needs of the US?

 

Where is the money going to come from to either produce or modify our transportation to consume hydrogen directly or through fuel cells?

 

If we have all this electricity why not focus on better storage methods for elctricity and cut hydrogen out of the loop all together in a lot of applications?

 

I think our biggest problem is time. I just don't think there is enough time to get some sort of alternative up and running before we are forced to face a lower oil supply available to the US. Of course pricing will curb demand, but at what cost to the rest of the economy?

 

We will end up fighting for oil. People will die so that we can go on consuming 25% of the world's oil production at low prices. There appears to be no alternative, since I view it as highly unlikely that the US will voluntarily curb it's oil appetite.

 

I currently run an ethanol blend, primarily because it offers a couple of extra octane points at the same price as other regular grades. Ethanol has to be subsidized to even come close to gasoline in current cost. I doubt that even a concerted effort a bio-mass production could do more than supplement gas stocks by more than a few percentage point without sacrificing food production. There is also the problem of water. Suitable water is in short supply in those places where most of the bio-mass would have to be grown: Southwest and Mid West

 

Thanks for the support Chiefy

[MaxxPain]

It's unbelievable how much work interferes with your life.

I am painfully aware of this. A major challenge for MaxxPain is time management.

 

There is virtually unlimited energy available. The obstacle is the cost. It would make sense to make a major investment in alternatives before the cost of oil goes up to reduce the pain of transition. The construction cost of a hydroelectric dam or nuclear plant is highly dependent on the cost of oil. Imagine undertaking any major project without oil.

[Flaming Turds]

Oil subsidizes everything and it seems to me that the dollar is really backed by oil. Without oil where does the dollar go? Down. So we will invade Iraq because those in power can not change or theyll necessarily lose their power. God forbid we should take peoples SUVs away. People are content to sit on their couches and be obedient until the SUV gets taken away then theyll be mad as hell.

 

One would think we would at least be making a half assed attempt at a solution by now though. I read that for biomass to replace oil and sustain current levels of energy consumption we would pretty much have to burn everything! I imagine we'll figure something out but I wonder how many people will die in the mean time.

[Bizarro-Greenspan]

Stirling engines;wild,wild stuff.I'd never heard of

'em,until my neighbor brought them up in a conversation,

turns out he's a Stirling Bug.

 

Everybody should have

an obsession,keeps one out of trouble.

 

Anyway,he gave me a couple of books to read,the

applications for these engines is unlimited.

 

Somebody,it would appear,doesn't like them much though.

[Guest Guest_mjkst27]

a bit OT, but this guy sez it's all about the baby-boomers getting old. See you in 2018!!

[Hypertiger]

Generational fluctuations are a symptom of central banking, Hard to comprehend I know?

 

The FRACTIONAL RESERVE BANKING SYSTEM is doomed to failure mathematically? The ?Boomer effect? just compounds the problem?

 

The fact is as long as civilization depends on fractional reserve banking, it doesn?t matter what humans do, the system will collapse. All DEBT created by the ?system? can never be paid back. Only ?Bank?ruptcy can reset the system back to square 1 to start inflation all over again. When they say we will print money to survive that is the sign that the system has reached the end of the inflationary phase. Deflation (which we are in now) is the next phase, it will get worse the deeper we move into it. The banking system is based on exponential Debt inflation and we have reached the maximum limit. End of the line?