Posted on 01/27/2006 5:23:10 PM PST by LouAvul
DAVOS, Switzerland (FORTUNE) - Be afraid. Be very afraid.
That's the message from two of the world's most successful investors on the topic of high oil prices. One of them, Hermitage Capital's Bill Browder, has outlined six scenarios that could take oil up to a downright terrifying $262 a barrel.
The other, billionaire investor George Soros, wouldn't make any specific predictions about prices. But as a legendary commodities player, it's worth paying heed to the words of the man who once took on the Bank of England -- and won. "I'm very worried about the supply-demand balance, which is very tight," Soros says.
"U.S. power and influence has declined precipitously because of Iraq and the war on terror and that creates an incentive for anyone who wants to make trouble to go ahead and make it." As an example, Soros pointed to the regime in Iran, which is heading towards a confrontation with the West over its nuclear power program and doesn't show any signs of compromising. "Iran is on a collision course and I have a difficulty seeing how such a collision can be avoided," he says.
Another emboldened troublemaker is Russian president Vladimir Putin, Soros said, citing Putin's recent decision to briefly shut the supply of natural gas to Ukraine. The only bit of optimism Soros could offer was that the next 12 months would be most dangerous in terms of any price shocks, because beginning in 2007 he predicts new oil supplies will come online.
(Excerpt) Read more at money.cnn.com ...
according to my calculations it will reach $253/barrel... :o)
Add some extra expense at the refineries for processing that heavy crude.
Abiogenic (Abiotic) Oil, the Wikipeia Article. From the conclusion:
Apart from the Russian interest, active proponents of the abiogenic theory in the west have all but disappeared.
Bear in mind that Wikipeia is virtually a consensus of 'common knowledge', -- and is not necessarily factual. The fact is, - our solar system is awash in methane.
Golds theory merely uses that fact to say that much more methane is yet to be found deep within the earth. Whether we can extract it economically is another matter.
How can you doubt abotic oil? We all know that oil:
1.) Comes from deep formations where it cannot exist [it would cook down.] and
2.) Exists in vast pools in basement rocks that have no porosity [and no permeability that would allow this stuff to migrate to a suitable trap.]
Seriously, there are some abotic hydrocarbons [volcanoes vent some hydrocarbons] ... and if the abotic believers expressed a belief in abotic methane instead of abotic oil I could be convinced that they had at least thought through some of the basics of their theory.
From there, if the abotic oil believers could come up with a single marginally commercial producer of abotic oil I would be happy to reconsider my opinion on the validity of the consensus view of the origins of oil.
"The future is not easily accessable and cheap sweat crude it is heavy oil in secure locations close to secure infrastructure."
Bastard sentence should read;
The future is not IN easily accessable, cheap sweat crude it is heavy oil in secure locations close to secure infrastructure.
The ordinary oil well is still 90% of the non-coal game. That is a chunk to replace with new tech.
Part of the Easy Oil equation is sweet oil, but easy access to transportation is also big. That includes pipelines as well as tankers. There is a lot of earthmoving involved in oil shale and tar sands; it's a lot like coal mining in that respect, but coal is ready to go when mined.
BTW.. notice he is in Davos -- the same place John Kerry was when he called to demand a filibuster of Alito.. coincidence?
I think not.
No the processing costs are neutral. Heavy oil has added solvents and is heated to run it throught the pipeline.
The costs of solvent and heat imputs are already factored into the break even price of CDN $29 per barrel.
At the processing side the added solvents are extracted and are a profitable byproduct.
Trust me, when you do your next oil change there is a good chance that Alberta Heavy oil is in the can.
no coincidence, and I bet Marc Rich was sniffing around there too.
"Wll if all of these are possible scenarios then bring on the technology that allows us to get oil from shale. The problem with that is that it takes a substantial amount of energy to get those resources out of the ground. It may become feasable one day, but the "energy out" to "energy in" ratio will be nothing compared to what conventional oil is."
Not really true. Energy balance for tar sands is good enough
for Canadian to process 1 million barrels a day economically, and oil shale may well be the same.
Shell says they have in situ technology that can extract oil shale for about $30 a barrel. See:
http://www.answers.com/topic/oil-shale
Also, see here:
http://ostseis.anl.gov/guide/oilshale/index.cfm
and here:
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_4096676,00.html
Exxon Mobil, Shell and Chevron are among six companies that will develop an in-situ technology to extract shale oil, Feeney said. Two other companies - Natural Soda Inc. and Kennecott Exploration Co. - will use a traditional process in which shale is mined, crushed and then heated in giant ovens called retorts to extract the oil.
Shell is a pioneer of the in-situ process, in which it drills holes and inserts heaters in target underground zones to slowly heat the shale layers.
Once the shale is sufficiently heated, a chemical reaction starts and releases the lighter hydrocarbons, which rise. The heavier hydrocarbons remain within the formation. The lighter hydrocarbons, almost a gasolinelike product, are subsequently pumped from the ground through conventional means.
The advantage to in-situ is that it eliminates the problem of waste disposal and enables higher recovery of oil, Terry O'Connor, Shell's vice president of external and regulatory affairs, has said.
For at least the past five years, at Shell's 20,000-acre Cathedral Bluffs property in Rio Blanco County, the company has been testing its patented method of burying heaters encased in pipe hundreds of feet underground, then liquefying the oil trapped in porous rock so it can be pumped to the surface.
O'Connor said earlier this year Shell hoped to have a commercially viable operation in the area by 2010.
You're right. How could I forget about him, especially since Clinton was there, too... probably checking on the balance in his and Hillary's Swiss accounts.
And I want the biggest friggin' engine they make!
If the ME is cut off by war for six months, can Canada make up the deficit?
Buy Suncor (SU) the Canadian oil sands company.
The Oil Sands industry uses two production methods, open pit mining, (which Canadians have down pat) and thermal/solvent extraction utilizing horizontal drilling, (Canada is also the leader in this technology).
The technology and metrics of Oil Sands extraction were solved ten years ago.
The Alberta Oil patch has just been waiting for the Oil Price to catch up.
It's here and it's now baby.
agree.
J.E.C. was a G*d D@nm PUKE! ...his mother was right, she should've "gotten rid of (abortion?)" of him...didn't she claim, "His Brother Billie was smarter?"
...history may show, she was right. :/
In typical fashion, GM is planning on returning to the muscle car / gas guzzler model as the world oil prices are about to climb through the roof
What will it take to get up to 15 million barrels a day?
Oil at $262 a barrel will precipitate taking over the ME oil field OURSELVES.
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