Ready for $262/barrel oil?

yahoo ^ | 1-27-06

[oceanview]

china only needs oil to manufacture items - that they sell to the west. if our economies stop, china goes down the tubes even faster.

[Mulder]

They cost more to refine because you have to cook the oil out of them. That's the reason they're basically untouched so far.

It's misleading to put a $ sign on how much it costs to get oil of the sands since the $ price is dependent on the price of oil, as other posters have stated.

A better way is to look at the ratio of energy in to energy out. For conventional oil, it is 30. For the oil sands it is 1.5.

[brainstem223]

Infinite and inexhaustible have two distinct meanings. I didn't say infinite. Example: Sea water is inexhaustible but not infinite.... Oil production peaked in the USA because the environmentalists piss up a fit and put a great portion of our oil bearing lands off limits to drilling. When a field is pumped out, the easy to recover oil is taken. Then these fields replenish themselves over time. due to oil flowing into the voids from higher strata by gravity. This is kinda slow so the field appears to be peaked. For instance, the water of the Gulf of Mexico is over a huge oil field as almost as large as the body of water. Drilling near the shores gets at the higher strata of oil bearing formations. Go farther out to sea and drill deeper and there is plenty of oil for centuries to come. Not as cheap to recover as the oil sands of the middle east where it begs to be harvested. The cost of recovering a barrel of Saudi crude is about $1.50. The technology for recovering deep oil is constantly improving and costs of recovery shall fall in line going forward. Notice that the Saudis could sell $10 a barrel oil with their costs and make profits hand over fist, notice also big oil turned in record profits... If we were running out of oil, those profits would be squeezed instead by humongous production costs; that alone is indicative that there is plenty of oil, a virtual inehaustable supply.

[oceanview]

new rigs can't be built?

[Trust but Verify]

Yes, but let's not drill in the US.

[fightu4it]

Ready for $262/barrel oil?

Ready for WWIII ?

[Mulder]

Just as important as preventing Iran from going nuclear would be the securing of the oil there so that China cannot get it. Deny our enemies fuel and they cannot do anything.

To which China would reply: deny our enemies credit and they cannot do anything.

If the world goes to war over this, it will be a terrible situation for all involved.

[eastforker]

Yeah but you have to have the equipment to recover it and right now there is no equipment available.

[brainstem223]

The nonavailability of equipment has no bearing on the nature of the deposits in the ground.

[Mulder]

china only needs oil to manufacture items - that they sell to the west. if our economies stop, china goes down the tubes even faster

I'll agree that to some extent, it is a Mexican standoff.

However, the country that produces things is going to have a big advantage over the one that only consumes them.

[gotribe]

At that price, we'll burn liberals for fuel.

[Crusher138]

What ever happened to the estimate of "bio" oils being cost effective at about $75 per barrel?

They could take their old fossil oil and put it where the sun don't shine...

[eastforker]

Yah but that takes a lot of investment capital, like building new refineries. with the hope of alternative energy around the cornrer, investment groups are hesitent to invest that money.

[palmer]

Definitely some merit in that since nuclear to electic takes 10k BTUs of heat for 1 KWh of electricity (or 2/3 of the energy is wasted). But IIRC, someone said here once that the problem is getting that heat underground or distributing it underground in an area that lacks water.

[operation clinton cleanup]

For all the cracks about Jimmy Carter in a cardigan and his malaise speech, America did reduce its use of oil following the price shocks of the 1970s, and laid the groundwork for low energy prices in the 1980s and 1990s.

Oh, so thats what happened! Lets get Jimmy back on TV to lecture the American people and solve this thing once and for all!

[Paul_Denton]

The ecnomies will no longer matter when the oil runs low anyway and we will have to face China sooner or later over Taiwan, the Spratleys and North Korea. Better to do so from a position of strength than let them develop the military power projection capability (military mobility) to challenge us in a non-pacific theater (such as the middle east).

[HereInTheHeartland]

"Time to drill - ANWAR, California, Gulf Coast, National Parks, etc."

Time for many new nuke plants here in the US with hydrogen splitting plants next to them.
Screw the Arabs and Islamic fanatics. This is the greatest country in world, we don't need their @&$#@%#ing oil.

[Mulder]

Oil production peaked in the USA because the environmentalists piss up a fit and put a great portion of our oil bearing lands off limits to drilling.

Get real. Did environmentalists also cause the North Sea to peak? How about Kuwait? Mexico?

these fields replenish themselves over time. due to oil flowing into the voids from higher strata by gravity. This is kinda slow so the field appears to be peaked

Slow as in "not in our lifetimes". Russia is the only country I'm aware of that peaked, declined, then increased production. And that was for political reasons, not geological ones. Abiotic oil is nonsense.

If we were running out of oil, those profits would be squeezed instead by humongous production costs

Profits are only 9% of sales of the the big oil companies. They are being squeezed to some extent.

[VadeRetro]

Fair enough.

[usafsk]

If you think drill bits are the issue in drilling and stretch reovery, well I don't think I have enough time to explain what the issues are. US production peaked because of economics. Back then there was just too much cheap, easily retrieved oil available to make it foolish to chase less than optimal sourcces in the US. That has changed in recent months, but not as much as it could. If prices hold above $50 for a sustained period, and demand holds up, then other sources/methods will be applied. I can assure you that drilling in the US and Canada has ramped up, more than doubled I'd guess, in the last 12 months.

Also, alot of Chinese demand was driven by weak electrical power generation capacity. Factories were buying up refineed oil products to keep things going. China has increased power output from coal by about 25% this year, increasing reliability and taking alot of oil demand off the table. Higher gas prices choked off demand for cars in most of China. Higher prices don't just effect US action, but are global. This is a fungible commodity. It will spike more frequently than in the past, but continued high prices will both retard global demand and increase the viability of alternatives.