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Will America Face an Oil Crisis Soon?
CBN ^ | 2006 | Dale Hurd

Posted on 04/17/2006 1:32:48 PM PDT by SLB

CBN.com – (CBN News) - Some believe that the world as we have known it is about to change.

Congressman Roscoe Bartlett (R-MD) is talking about what he thinks could be the biggest challenge in our nation's history.

"The world has never faced a problem like this," Bartlett said.

A huge and sustained increase in the price of oil that would devastate our economy and the world economy, and would force all of us to change the way we live. Why?

It is a phenomenon known as "peak oil." The idea is that oil is a finite resource. There is only so much of it in the ground, and eventually we will start to run out.

One of the leading advocates of this theory is oil industry analyst Matthew Simmons. In his book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, Simmons uses reams of hard geological data to argue that the oil fields of Saudi Arabia -- the world's largest producer -- are in serious decline, and prices for oil at some point will skyrocket.

The quantity and price of oil follows a bell curve. When Saudi oil was first discovered and oil production was growing, the amount of Saudi oil on the market kept increasing, assuring low prices. But at the point when Saudi oil production falls and can no longer meet demand, prices go up.

And because energy-hungry nations like China and India are in the midst of economic booms, the demand for energy is increasing daily, while the supply of oil, if it is shrinking, will make oil scarcer, and much more expensive.

Some of us remember gasoline prices of 29 cents a gallon or less. Today, we have gotten used to gas prices that were once unthinkable. But what if gas prices were $7 a gallon, or more?

Bartlett said, "The peaking may have already occurred. If not now, then very soon. So I think we are probably beyond the point where we can avoid the consequences of peaking. I think what we need to do now is to simply minimize the consequences of peaking. I don't think we have a prayer of avoiding the consequences of peaking."

What is the absolute worst-case scenario from peak oil? A world war over oil supplies. But the less dire economic scenarios are not much better. It would most certainly lead to a deep worldwide recession, or even a depression.

Our economy and way of life has been built around affordable oil. Many of us live in the suburbs. We have to drive to work, to grocery stores, to just about everywhere. We enjoy a high standard of living, thanks to affordable goods and services made possible because of cheap energy.

An oil price spike to perhaps $200 dollars a barrel or more could wreck whole sectors of our economy, like the airline industry, which is already hurting from oil at $70 a barrel. Just think what would happen if airline ticket prices tripled from today's levels!

Peak oil prices would also pour a lot more money into the coffers of some regimes around the world who do not like the United States.

But if there is a plus side to peak oil, it is that unaffordable oil would finally force businesses to invest seriously in developing alternative fuel technologies.

Simmons' book has created such a stir in the energy industry that the world's largest oil company, ExxonMobil, created an ad to dispute it. It says that the Earth still has plenty of untapped oil to meet demand for decades to come.

Myron Ebell of the Competitive Enterprise Institute, a free-market think-tank, said, “At some point, oil production will peak. I think that is a long ways away…In the early 1930s, the Department of Interior estimated that we'd run out of oil by 1940. So there's a long history of predicting these things, and most of the predictions turn out not to be true.”

There is plenty of oil in the ground right here in America, but environmental protection laws prevent us from drilling for it.

Ebell also observed, “There are political obstacles to oil production in many places in the world -- most seriously in the United States.”

But if Simmons is right, America is facing a serious problem that Bartlett warns may now be too late to prepare for. He says we must begin to conserve, and to develop other sources of energy.

“I think this is going to be the overarching problem for the next decade,” Bartlett said. “We will transition from fossil fuels to renewables (renewable energy). Geology will insist on that. It will be a really bumpy ride or a less bumpy ride, depending on how we relate ourselves to it and what we do now.”

And everyone -- from President Bush on down -- knows how much America depends on oil. Bush has said that "America is addicted to oil."

And if the prediction of peak oil is true, America needs to start moving away from oil as an energy source as soon as possible.


TOPICS: Culture/Society; Extended News; Front Page News; Government
KEYWORDS: cbn; economy; energy; energycrisis; oil; peakoil
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To: jbenedic2
What about all the tar-sands up in Canada? I heard that there is enough to run all of our energy needs for the next 100 years.

Last I heard the Chinese were buying up the rights with our worthless dollars.

41 posted on 04/17/2006 3:31:50 PM PDT by raybbr
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To: nmh
Guess who's fault it will be?

It will fall into the lap of whoever wins the White House in '08.

42 posted on 04/17/2006 3:35:05 PM PDT by RightWhale (Off touch and out of base)
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To: BigTex5; dirtboy

Every available rig in the US is working right now with a 2-4 month wait list.


43 posted on 04/17/2006 3:41:46 PM PDT by eastforker (Under Cover FReeper going dark(too much 24))
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To: CarolinaGuitarman

Your figures are a little mis guided. You are basing that on market prices but companies like shell and exxon only pay about 35 dollars cost to get oil out of the ground.


44 posted on 04/17/2006 3:45:49 PM PDT by eastforker (Under Cover FReeper going dark(too much 24))
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To: ARCADIA

nstead of wasting money on an endless stream of meaningless pork, we should be investing in a multi-path high-speed rail system to blanket the country................ No Thank you!!!


45 posted on 04/17/2006 3:48:48 PM PDT by eastforker (Under Cover FReeper going dark(too much 24))
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To: BearWash

A lot of gas mileage depends on how you drive the car. I know that in my car, I get significantly more than the estimate; then again, I drive the speed limit and generally accelerate as if the gas pedal is an egg--push too hard, you'll break it.


46 posted on 04/17/2006 3:51:17 PM PDT by Publius Valerius
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To: eastforker
"Your figures are a little mis guided. You are basing that on market prices but companies like shell and exxon only pay about 35 dollars cost to get oil out of the ground."

No, they are correct. When you buy a gallon of gas, the oil company makes about 8-12 cents profit. The government makes far more. The profit margins of oil companies are in line with many major corporations.
47 posted on 04/17/2006 3:53:18 PM PDT by CarolinaGuitarman ("There is grandeur in this view of life....")
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To: CarolinaGuitarman

Again, you are basing your figures on market cost for oil. The cost for big production refineries that produce their own oil by drilling their own wells is a lot less. Do not let the jumbled figures throw you. When world spot prices was around $35 your figures would be correct.


48 posted on 04/17/2006 3:58:17 PM PDT by eastforker (Under Cover FReeper going dark(too much 24))
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To: OnRightOnLeftCoast

Have you been reading anything about the trains? They are at peak capacity causing bottlenecks and delays.


49 posted on 04/17/2006 4:01:50 PM PDT by ClaireSolt (.)
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To: SLB

I think in the next few years Peak Oil will be the least of our worries.


50 posted on 04/17/2006 4:09:32 PM PDT by dljordan
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To: eastforker
No, they get about 8-12 cents a gallon profit. Any attempt to have the government in its infinite wisdom regulate prices will result in long lines and shortages. That's always what happens when put artificial caps on prices.

The markets will sort this out better than any government bureaucrat. It's the oil companies oil to sell at whatever prices they want. We are not entitled to their property at any price we wish.
51 posted on 04/17/2006 4:10:13 PM PDT by CarolinaGuitarman ("There is grandeur in this view of life....")
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To: OB1kNOb
"...Americans are addicted to gas guzzling SUV's and expensive automobiles getting low mileage...."

I'm "addicted" to my 4x4 vehicles that don't get trapped in a snow drift. We just had 5 inches of snow last night in Pocatello. It definitely screwed up my air travel, but I didn't have to worry about whether my wife would have trouble getting home from work when her shift ended at 7 AM.

52 posted on 04/17/2006 4:14:03 PM PDT by Myrddin
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To: CarolinaGuitarman
All this doom and gloom drives me nuts. It is about time we give up on bickering as our national pasttime and get back to working together. We still have a big hole in Manhattan and they won't site trailers in NO. All everyone does is argue, endlessy.

Bush campaigned on the need for a national energy policy and it took Congress 5 years to pass a bill many say is inadequate. so Bush is going round promoting solutions, himself, again and seems to be working with governors to get ethanol cranked up. The army has taken delivery on the first hydrogen car and has a plan to eliminate 75% of its oil. NIMBYs seem to think they can win the White House in 08.

Last week two people sent me info on a product that always sells like hotcakes when oil prices are high. So if you want to profit from the concern, check this out.

Watch the Movie: http://myffi.biz/Flash/fuel_movie.html

Test Results

http://www.revitup.myffi.biz/en/section_201.asp

TESTIMONIALS:

http://www.revitup.myffi.biz/en/section_203.asp< p> The MPG-CAPS - Visit www.RevItUp.myffi.biz

53 posted on 04/17/2006 4:16:00 PM PDT by ClaireSolt (.)
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To: SLB; All
Allow me to drop out of Lurk and Link Mode for a brief bit of commentary- we all need to get serious about our dependency on foreign sources of energy, and use our own resources.

Our consumer-based economy is driven by and dependent on readily-available, reliable energy-- choke that off, and we'll all be back to using one rotary dial phone in the dining room, watching one TV, and driving one car per family-- probably a Hudson Hornet or a Rambler...

We need to

1) end the nonsensical ban on offshore drilling off California and Florida--read & weep:
Castro Plans to Drill 45 Miles from US Shores, But We Can't

2) build a lot of next-generation nuclear power plants, not just for electricity, but for any process requiring heat, power, or steam.

3) end Jimmy Carter's idiotic ban on recycling nuclear waste, and reprocess the stuff rather than fighting over where to bury it. Europe has done it for decades.-- what to do with spent nuclear fuel? Answer here: http://www.freerepublic.com/focus/f-news/1468321/posts?page=50#50 hattip:  Mike (former Navy Nuclear Engineer)

4) use the 300-500 years worth of coal we have on our own land, using the new clean-coal technology.
-Clean Coal Centre--

5) and finally, there's nothing wrong with conservation- but you can't conserve your way out of a shortage. Nor is there anything wrong with "alternative" energy sources- except they don't supply the vast ( not to mention readily-available ) amounts of power we need at a price competitive to more conventional sources.

We do need to get serious about this before we get strangled by a bunch of petty thieves and dictators who don't like us much.

My tongue-in-cheek collection of energy-related links:

Sticker Shock-$3 a gallon gas? Click the picture:

And kindly note, and note well-- the first reply to this post ( when gas was less than $1.50 a gallon ) was derisive... so, who's laughing now?


PS- sympathize with filling the Suburban- I drive a 4x4, and cuss the bloody thing at the pumps, too-- but the last time the roads flooded here, I got home when many didn't.

54 posted on 04/17/2006 4:35:13 PM PDT by backhoe (-30-)
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To: CarolinaGuitarman

I never said we should regulate them. I just stated that your figures are skeward.Sort of like the farmer that raises cows and corn. He could sell the corn for $5 dollars a bushell or feed it to his cows for the cost of $2 a bushell. Then when he sells the cows he makes a bigger profit but on his bottom line he will show that the corn cost him $5 a bushell to feed that cow. Like I said, your figures are skeward.


55 posted on 04/17/2006 4:42:05 PM PDT by eastforker (Under Cover FReeper going dark(too much 24))
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To: backhoe
PS- sympathize with filling the Suburban- I drive a 4x4, and cuss the bloody thing at the pumps, too-- but the last time the roads flooded here, I got home when many didn't.

Yep, gotta weigh the pluses and minuses and then figure what your own values are. I keep the tank filled, or nearly so, that way the shock is not so great, plus if I need to make a fast and long trip I am ready. My mom is 91 and lives 1300 miles from me. I can make it over half way non-stop with a full tank. As far as bad weather, the clearance and good tires really help out there.

56 posted on 04/17/2006 4:43:11 PM PDT by SLB (Wyoming's Alan Simpson on the Washington press - "all you get is controversy, crap and confusion")
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To: ARCADIA
...we should be investing in a multi-path high-speed rail system to blanket the country.

You're wholly free to invest your own money as you wish.

57 posted on 04/17/2006 4:46:28 PM PDT by Mr. Lucky
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To: backhoe
Your post is well stated and common sense minded. If people think prices are high now wait until Iran triggers regional war in the oil rich Persian Gulf, coupled with a repeat of powerful hurricanes slamming into the oil production areas of the Gulf of Mexico.

Prices could very well double or far higher and if energy traders begin viewing large oil fields blazing from their TV screens. Stock indexes will quickly turn bearish, while gold and the metals complex will go off the charts.

Those seeking protection from inflation will also look to bonds/T-Bills, while the wise money will be overseas for a more favourable return. None of this coming financial rumbling benefits the U.S. Dollar, unless one is shorting her, which is the only logical longer term trade.

Light Crude Oil (CL, NYMEX)

Energy related inflationary problems are just getting under way. The housing boom may not bust but will go flat with multiple slow leaks.

The good old days, when gas was 28 cents, ice cold Coke was in a bottle for 10 cents and baseball cards were a nickel - and you got bubble gum too :)

58 posted on 04/17/2006 5:03:35 PM PDT by M. Espinola (Freedom is never free)
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To: liberallarry

You have brought up some excellent economic related points to ponder.


59 posted on 04/17/2006 5:04:53 PM PDT by M. Espinola (Freedom is never free)
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To: SLB

"Simmons' book has created such a stir in the energy industry that the world's largest oil company, ExxonMobil, created an ad to dispute it. It says that the Earth still has plenty of untapped oil to meet demand for decades to come."

Yeah but we won't be tapping it. God forbid that a freaking tree be uprooted.


60 posted on 04/17/2006 5:09:14 PM PDT by samm1148
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