NationStates Jolt Archive

Chávez seeks to peg oil at $50 a barrel.

Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.

A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.

"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."

The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.

According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.

Monday April 3, 2006
--OceanNews Limited©2006--

My comment:
#1) I wonder what SaudiArabia (and the Big US Oil-corps) have to say about all of this

#2) what do you all have to say? ;)

One problem I see with that. That problem being that Venezuela is in OPEC if I remember right. What does OPEC have to say about what Venezuela is planning on doing?

Oil at $ 50 a barrel? Hooyah.

One problem I see with that. That problem being that Venezuela is in OPEC if I remember right. What does OPEC have to say about what Venezuela is planning on doing?Yes Venezuela is a founding member.. in a way the OPEC was created by Venezuela..

#1) in a way the OPEC was created by Venezuela..

#2) Chavez is more popular in the Arab-lands.. than the Saudi Royals.

#3) Chavez is willing to confront the other OPEC leaders.. and kiss them good bye (if there is no accord)

You do realize that by doing what they are doing, the oil market will be extremely volitial.

Also, I would like to see a link to this.

Well, if this is true, then good for them. It's time someone stood up to the greedy oil companies.

Well, if this is true, then good for them. It's time someone stood up to the greedy oil companies.

This is politics Kryozerkia. I wouldn't be surprised if he spiked the Price of Oil after a while of him doing this.

A more interesting question would be what he plans to do with the U.S. Is this just a measure to regain U.S. backing as news of his repressive regime begins to spread to the United States and elsewhere? The American people wouldn't mind cheaper oil prices, and the U.S. government won't say no, but at what cost? How many deals with the devil are we going to make to secure a vital resource?

Not to mention that with Chavez popularity on shaky grounds at best, a deal with him could lead to another Iran like situation. This time though, in the Americas.

http://www.guardian.co.uk/venezuela/story/0,,1745707,00.html

link!

Corneliu, would you care to explain to me how a fixed price would equal a volatile market?

Corneliu, would you care to explain to me how a fixed price would equal a volatile market?

Because it'll only be one nation unless he can get the backing of OPEC on it. I do not know if OPEC will cut such a deal. If they don't, what will Venezuela do? It all depends on what the rest of the OPEC nations do. If they agree to $50 then it won't be volitiale. If they do not agree with it, things could get interesting.

This is politics Kryozerkia. I wouldn't be surprised if he spiked the Price of Oil after a while of him doing this.
Well... he already did offer to help some Americans by providing cheaper energy for them. Even if it is politically motivated, it's a positive development.

You do realize that by doing what they are doing, the oil market will be extremely volitial.Its the other way around..

Chavez wants to sign Long term FIXED-PRICE contracts.. that would stabilize the consumer price.

http://www.guardian.co.uk/venezuela/story/0,,1745707,00.html

link!thanks

http://www.guardian.co.uk/venezuela/story/0,,1745707,00.html

link!

Nothing in the London Times nor in the New York Times.

Nothing in the London Times nor in the New York Times.
Here... this one is at the BBC: Chavez rules out return to cheap oil (http://news.bbc.co.uk/1/hi/world/americas/4871938.stm)

Because it'll only be one nation unless he can get the backing of OPEC on it. Venezuela has the largest OIL reserves on American soil. And maybe the World.

Any Price that Venezuela sets.. is going to affect the World prices.
(economics 101 --You have been educated-- ;) )

The only thing that suprises me about this move is that Chavez decided to set the price in US$. I would have expected him to set it in Euros just to oppose the USA.

One problem I see with that. That problem being that Venezuela is in OPEC if I remember right. What does OPEC have to say about what Venezuela is planning on doing?
It would appear that Venezula's approach is certainly in line with OPEC's aim?

The principal aim of the Organization, according to its Statute, is "the coordination and unification of the petroleum policies of [its] member countries and the determination of the best means for safeguarding their interests, individually and collectively; [devising] ways and means of ensuring the stabilization of prices in international oil markets with a view to eliminating harmful and unnecessary fluctuations; [giving due regard] at all times to the interests of the producing nations and to the necessity of securing a steady income to the producing countries; an efficient, economic and regular supply of petroleum to consuming nations, and a fair return on their capital to those investing in the petroleum industry."1

Nothing in the London Times nor in the New York Times.
There's no such thing as the London Times, it's just "The Times" ;)

My comment:
#1) I wonder what SaudiArabia (and the Big US Oil-corps) have to say about all of this

#2) what do you all have to say? ;)

Chávez won't be able to live up to it. He would proberly ask a Western Nation to buy a few hundred barrels but then with the money in his bank account give some excuse that the Oil can not be shipped for a couple of months due to the condition of his Main Port's, then ask for money installments to help maintain his Port facilities.

Here... this one is at the BBC: Chavez rules out return to cheap oil (http://news.bbc.co.uk/1/hi/world/americas/4871938.stm)

Thank you Kryozerkia.

I'm surprised that this isn't in the Wall Street Journal.

http://news.bbc.co.uk/1/hi/world/americas/4871938.stm

If you can't trust the BBC you're fairly screwed for finding balanced news.


This will go a long way to stop our oil driven economies from collapsing due to oil company greed fatigue. I don't know if anyone else noticed the price of canned goods going up when gas went up.

Unless you live on a self-sustaining farm, trucks and ships bring your food to the table, and they eat gas. Until we find alternative energy sources that can take over the industrial food chain we're stuck with what we have.

It's good that Chavez has stood up to OPEC, but with all the money that some very unpleasant people stand to lose it might well cost him his life.

To me it seems like a clever three-fold plan,

1. Chavex looks like a humanitarian socialist to the world, and more importantly for him, his electoral base.

2. Venezuela's new OPEC standing would give him more international clout.

3. The subsequent deals Venezuela would make with consumer nations would ensure a strong and steady influx of money into the Venezuelan economy.

Everybody wins, except for Saudi Arabia, who currently is the top dog in OPEC.

We shall see, we shall see.

It's good that Chavez has stood up to OPEC, but with all the money that some very unpleasant people stand to lose it might well cost him his life.He is a dead man indeed..
I bet there is several contracts on his head already.. He knows that.. At this point he is just worried about his legacy..

Everybody wins, except for Saudi Arabia, who currently is the top dog in OPEC.Yup, the losers here are the Saudi Royals AND the Oil Corps.

That is the bomb. But what about that "green oil" made of corn or something? And what about hybrid cars? Isn't it time we started looking into that stuff more seriously?

Will people stop calling it the LONDON Times, It's just the Times. If you want to let people know it's a non-American Newspaper call it the British Times or better still the UK Times as it is available as a National Newspaper not just in London. It's like calling USA Today the New York USA Today, it's a national Newspaper mmmkay!

That is the bomb. But what about that "green oil" made of corn or something? And what about hybrid cars? Isn't it time we started looking into that stuff more seriously?Dont tell that to the Brazileans. ;)

Will people stop calling it the LONDON Times, It's just the Times. If you want to let people know it's a non-American Newspaper call it the British Times or better still the UK Times as it is available as a National Newspaper not just in London. It's like calling USA Today the New York USA Today, it's a national Newspaper mmmkay!

It is the USA Today. :D

We already have to many NY Papers. Don't need another one :D

Will people stop calling it the LONDON Times, It's just the Times. If you want to let people know it's a non-American Newspaper call it the British Times or better still the UK Times as it is available as a National Newspaper not just in London. It's like calling USA Today the New York USA Today, it's a national Newspaper mmmkay!

Why not read the Daily Mail insted?

TChavex looks like a humanitarian socialist to the world, and more importantly for him, his electoral base.

The CIA assassinate or back manufactured coups against people like this all the time, on behalf of the interests of powerful corporations. It’s their bread and butter.

Chávez seeks to peg oil at $50 a barrel.

Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.

A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.

"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."

The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.
Hang on a second. Look at the BBC article:

http://news.bbc.co.uk/2/hi/americas/4871938.stm

Chavez wants to make OPEC's target price $50. Oil prices may be way above that at the moment, but their current target price is $28. Chavez is doing the complete opposite of what you're suggesting - rather than stopping prices getting above $50, he wants to stop them ever falling below $50.

The CIA assassinate or back manufactured coups against people like this all the time, on behalf of the interests of powerful corporations. It’s their bread and butter.I dont think Chavez will make it to the next Venezuela elections..

Hang on a second. Look at the BBC article:

http://news.bbc.co.uk/2/hi/americas/4871938.stm

Chavez wants to make OPEC's target price $50. Oil prices may be way above that at the moment, but their current target price is $28. Chavez is doing the complete opposite of what you're suggesting - rather than stopping prices getting above $50, he wants to stop them ever falling below $50.

*hands Safalra a cookie*

Question is...

...Does he want to lock it at $50 a barrel, or does he just want $50 to be the bare minimum?

There's a difference.

... but..BBC..OPEC..their current target price is $28. ..their "target" price migth just a well be around $12 or $80.. Its totally meaningless..

Chavez is talking about signing a long term contract.. with a locked price.

their "target" price migth just a well be around $12 or $80.. Its totally meaningless..

Chavez is talking about signing a long term contract.. with a locked price.
Which would lead to economy stability for consumers who are dependent on imported oil.

I noticed the phrase "COULD REMAIN" as low as $50 a barrel. He isn't making any promises here.

Sounds to me as if it's time to go all out with "alternative" energy source development. PAST time, actually.

I dont think Chavez will make it to the next Venezuela elections..

On the other hand with the general flinchy and misdirected nature of US government agencies following 9-11, Chavez might be quite safe.

I noticed the phrase "COULD REMAIN" as low as $50 a barrel. He isn't making any promises here.good question... Maybe he needs some room to (try to) negotiate with the OPEC.. but I am not willing to advance any interpretation..

I noticed the phrase "COULD REMAIN" as low as $50 a barrel. He isn't making any promises here.

Looks like you're right about that.

Ethanol is way better, anyway. It's more abundant, it's renewable, and it doesn't pollute. Plus, it gives off a wonderful corn scent!

Just think about it --- when cars powered by ethanol drive by, they smell like popcorn! Well, not exactly popcorn (more like hot canola oil, which is still good), but you get my point.

good question... Maybe is need some room to negotiate with the OPEC.. but I am not willing to advance any interpretation..

You have so far. You stated that it would be locked at $50 a barrel. I just showed you a line that said something different.

Looks like you're right about that.

Ethanol is way better, anyway. It's more abundant, it's renewable, and it doesn't pollute. Plus, it gives off a wonderful corn scent!

Just think about it --- when cars powered by ethanol drive by, they smell like popcorn! Well, not exactly popcorn (more like hot canola oil, which is still good), but you get my point.

I'm all for alternate energy sources.

I'm all for alternate energy sources.

That one guy's water combustion converter was the best I've seen. He drove from Houston to San Antonio on two litres of water, and he still had some left over for city driving.

It's the same combustion process that's used for metal cutting. It superheats the water to make it hotter than burning gasoline, thus the more efficient energy transfer.

That one guy's water combustion converter was the best I've seen. He drove from Houston to San Antonio on two litres of water, and he still had some left over for city driving.

It's the same combustion process that's used for metal cutting. It superheats the water to make it hotter than burning gasoline, thus the more efficient energy transfer.

W00T! :)

W00T! :)

Yeah. The army's looking into developing it for their Humvees, and auto manufacturers have expressed interest in it, but I haven't heard about it since the middle of last year.

Looks like it's probably been thrown aside.

You have so far. You stated that..........I 100% stand by what I posted. --OceanD©2006-- ;)

I stand by evething I posted. OceanD©2006 ;)

So the guardian says its going to lock at $50 and yet BBC is reporting that it COULD REMAIN AS LOW AS $50 a barrel. See the difference between the two? I actually trust BBC more than the Guardian.

So the guardian says its going to lock at $50 and yet BBC is reporting that it COULD REMAIN AS LOW AS $50 a barrel. See the difference between the two? I actually trust BBC more than the Guardian.Its your privilege.

Chavez wants to make OPEC's target price $50. Oil prices may be way above that at the moment, but their current target price is $28. Chavez is doing the complete opposite of what you're suggesting - rather than stopping prices getting above $50, he wants to stop them ever falling below $50.

Given that oil is not renewable, we are using it at a massive rate, and there are very limited stocks- its not a product that is likely in the future to drop from $60 p/b to $28 p/b. Especially given the near/medium future stability of the oil producing Middle East.

Oil can only go up in price (or if it does drop it will be so little, you won't even notice)

I dont think Chavez will make it to the next Venezuela elections..
One can only hope.

One can only hope.the question is :
Do you hope the CIA gets him?
or
Do you hope the CIA fails to get him?

:D :D ;) :D

One can only hope.

You mean from the US perspective or from the broader democracy and people of Ven. perspective? :confused:

So the guardian says its going to lock at $50 and yet BBC is reporting that it COULD REMAIN AS LOW AS $50 a barrel. See the difference between the two? I actually trust BBC more than the Guardian.
More relevant is that the Guardian article cites the Newsnight interview - an interview that hasn't even been broadcast yet. The Guardian has clearly misintreped information has been leaked to them by BBC staff.

It's the same combustion process that's used for metal cutting. It superheats the water to make it hotter than burning gasoline, thus the more efficient energy transfer.
How's the water heated?

How's the water heated?with Gaz sold to you by Chavez.. at very reasonable prices..
:D :D :p :D

*sings.. me gusta La Gazolina.. dame La Gazolina..* ;)

Sounds to me as if it's time to go all out with "alternative" energy source development. PAST time, actually.
BRAVO!! That is exactly the kind of spirit that should be generated by all of this over dependence on non renewable resources. :D

*sings.. me gusta La Gazolina.. dame La Gazolina..* ;)
I just heard that song once and that was enough.
(Apart from gasolina Cumbia songs have honored stuff like cellular phones and satellite dishes)

A more interesting question would be what he plans to do with the U.S. Is this just a measure to regain U.S. backing as news of his repressive regime begins to spread to the United States and elsewhere?

His repressive regime ? Stop looking at Fox News. Chavez' Venezuela is much, much less a repressive country than USA or even most of European countries. There are very few countries in which you can do a coup attempt, fail it, and not be thrown in jail...

Not to mention that with Chavez popularity on shaky grounds at best, a deal with him could lead to another Iran like situation. This time though, in the Americas.

Popularity on shaky grounds ? He won around 8 fair (validated by international observers) elections in 7 years, with close to 60% each time ! That's a world record.

He is a dead man indeed..
I bet there is several contracts on his head already.. He knows that.. At this point he is just worried about his legacy..

He already was the target of a coup attempt, of a murder attempt, and got a few murder calls on TV. But he's still alive, and loved by his people. It's not that easy to murder someone loved by his people, and even if they kill him, they'll turn him into a martyr, but they won't stop the Bolivarian Revolution. It's too late now, for the capitalists, to kill the hope of Venezuelian, as they killed the hope of Chilean in 1973.

Sounds to me as if it's time to go all out with "alternative" energy source development. PAST time, actually.

We should have been doing that 30 years ago, after the oil embargo of the 70s.

He is a dead man indeed..
I bet there is several contracts on his head already.. He knows that.. At this point he is just worried about his legacy..
I'm sure Bush has his number. I'm sure all of Big oil have his number...

I do wonder how this doesn't screw over the Venezuelan oil workers, or furthermore every worker in Venezuela.

How's the water heated?

That, I'm not quite sure of. I just know that it uses a specialised combustion process to superheat it, and it's actually hotter than burning gasoline.

It's the same combustion process that's used for industrial metal cutters, which also use water.

I do wonder how this doesn't screw over the Venezuelan oil workers, or furthermore every worker in Venezuela.before he was elected.. the Oil workers(and the managers) were a privileged caste.. they used to make a lot of money.. Chavez is putting their privileged salaries in line with the rest of Venezuelan salaries.

The Venezuelan (Oligarch) Powerful Oil Unions be damned.. They declared war on him (they raised hell) ..and they lost.

That, I'm not quite sure of. I just know that it uses a specialised combustion process to superheat it, and it's actually hotter than burning gasoline.

It's the same combustion process that's used for industrial metal cutters, which also use water.
The wikipedia article on steam-powered cars proved informative: http://en.wikipedia.org/wiki/Steam_car

They seem like a good alternative. Although they burn gasoline, like OceanDrive sang, they do so much more efficiently with modern technology. I suppose they could also burn natural gas or something else if need be.

Everyone step aside! A proper energy industry guy is about to post! :D

Even I have to admit he's full of crap on this one.

Looks like you're right about that.

Ethanol is way better, anyway. It's more abundant, it's renewable, and it doesn't pollute. Plus, it gives off a wonderful corn scent!

Just think about it --- when cars powered by ethanol drive by, they smell like popcorn! Well, not exactly popcorn (more like hot canola oil, which is still good), but you get my point.
Ethanol, as in alcohol? It's hydroscopic isn't it? I mean, you couldn't use it in wetter climates like Britain, could you?

Looks like you're right about that.

Ethanol is way better, anyway. It's more abundant, it's renewable, and it doesn't pollute. Plus, it gives off a wonderful corn scent!

Just think about it --- when cars powered by ethanol drive by, they smell like popcorn! Well, not exactly popcorn (more like hot canola oil, which is still good), but you get my point.

What world do you live in?

Where I live (Brazil) we have had ethanol powered cars for the last 30 years. They do NOT smell pleasant. They stink. That aside they are fine in hot climates, but they simply don't cut the mustard in temperatures below 10 C (50 F). Which eliminates them from being a reasonable alternative at the moment for the majority of the USA and Europe. What you could use are the twin fuel engines which accept both gasoline and ethanol (and any mixture of the two), using gas in the winter and ethanol in the summer.

Will people stop calling it the LONDON Times, It's just the Times. If you want to let people know it's a non-American Newspaper call it the British Times or better still the UK Times as it is available as a National Newspaper not just in London. It's like calling USA Today the New York USA Today, it's a national Newspaper mmmkay!Stop getting so worked up about it being called the London Times. It's called the London Times outside of the UK because oddly enough, that's where its offices are. If you're still not happy, then you can't object to it being called the Times of London.

What world do you live in?he probably from my country.. (when the local city team wins the country league.. we call them World Champs:rolleyes: ..that should give an idea of our World awareness)

most people in the US (an many other countries) think that alcohol engines are only in the experimental stage.. They are not aware that Brazil been succesfully using vegetable fueled engines.. for 30 years.

sweet sugar cane. ;)

You do realize that by doing what they are doing, the oil market will be extremely volitial.




The oil market is already extremely "volitial," it's why Iran can do what it pleases.

the biggest problem with that is that it will destroy the world oil markets and create artificial shortages. Everytime this has been tried it results in the same thingL: shortages. It happened here in the US in the 70s, it happened all the time in teh Soviet Union even during times when oil was plentiful. It is happening now in China even though there is no shortage of crude in the market. Price controls always result in shortages and yet people, for political expedience, always try to apply them when prices rise.

The price of oil on the market right now is the truest balance of supply and demand plus risk premium the market has ever seen. It is as expensive as it is because it needs to be this expensive and will probably get more expensive in the future because it should. Rising prices for crude are the only way to get governments and people to plan for an oil scarce future and to get private enterprise to capitalize on expensive oil with innovation. It is the reason hybrid technology has exploded. It is the reason railrod building and public transport are back front and center in public discourse. It is the reason Sweden plans to be oil free by 2020 and Brazille will be oil free by 2007.

We will not be oil free by 2007, but the intent is to be self sufficient in oil by then.

We will not be oil free by 2007, but the intent is to be self sufficient in oil by then.
Oh. Well, as Rosan Rosana Dana would say, "nevermind."

We will not be oil free by 2007...I was going to say that.. but Brazil engines are already close to 50% alcohol.. or something like that?

thats amazing.

I was going to say that.. but Brazil engines are already close to 50% alcohol.. or something like that?

thats amazing.

I don't know what the overall distribution of alcohol against Gasoline and Diesel is here now, but I do know that more new cars were sold last year with engines that are so here called 'flex' engines than cars with standard gasoline or diesel combined.
These 'flex' engines are engines that will run on either ethanol or gasoline and are self adjusting to adapt to the mixture you have in your tank.
Read more here (http://www.autoblog.com/2006/01/13/flex-fuel-cars-lead-brazilian-auto-sales/)

the biggest problem with that is that it will destroy the world oil markets and create artificial shortages. Everytime this has been tried it results in the same thingL: shortages. It happened here in the US in the 70s, it happened all the time in teh Soviet Union even during times when oil was plentiful. It is happening now in China even though there is no shortage of crude in the market. Price controls always result in shortages and yet people, for political expedience, always try to apply them when prices rise.

The price of oil on the market right now is the truest balance of supply and demand plus risk premium the market has ever seen. It is as expensive as it is because it needs to be this expensive and will probably get more expensive in the future because it should. Rising prices for crude are the only way to get governments and people to plan for an oil scarce future and to get private enterprise to capitalize on expensive oil with innovation. It is the reason hybrid technology has exploded. It is the reason railrod building and public transport are back front and center in public discourse. It is the reason Sweden plans to be oil free by 2020 and Brazille will be oil free by 2007.Are you aware of OPEC restrictions on output? The current price is politically controled and is not a true balance of supply and demand at all. Since OPEC controls a little under half the oil market and I cannot see how you can argue that the market isn't grossly distorted. OPEC doesn't produce anymore oil than it did in the early 70s, despite huge increases demand and having the ability to increase output.

Chavez is smarter than I thought...he understands supply and demand perfectly well. He actually gets (albeit grudging) respect for his knowledge of the effects of price controls on supply.

If he locks in sub-equlibrium prices for extended periods of time, consumption will increase faster due to the increasingly cheaper real price of the fuel and a demand-supply imbalance will occur. When the locked in rate ends, the price will skyrocket due to the artificial shortage and his country will be able to make a fortune off of it.

Also, it will shift demand and influence to Venezuela from Saudi Arabia. This is an absolutely perfect case of undercutting prices to steal market share, with the eventual result being massive hikes in prices. My advice is to take the deal and then spend the time building up as much renewable and nonpetroleum sources of fuel and energy as possible to replace oil consumption and consequently counteract the attempt to corner the market.

Are you aware of OPEC restrictions on output? The current price is politically controled and is not a true balance of supply and demand at all. Since OPEC controls a little under half the oil market and I cannot see how you can argue that the market isn't grossly distorted. OPEC doesn't produce anymore oil than it did in the early 70s, despite huge increases demand and having the ability to increase output.
i am aware and that is why I said it is the truest balance we have ever seen. Prior to OPEC the swing producer was the US and the Texas Railroad Commision put restrictions on output. Right now all OPEC countries are producing at full throttle with very little ability to increase output. No country in OPEC has any spare cushion save Saudi Arabia and they only have a cushion of about 1.5 million barrels/day and its all heavy sour crude which very few refineries can handle so, in effect if not by design, demand and risk premium are balanced with supply because no one is holding any relavent supply back.

*snip*
Except he has neither the resource nor the capacity.

Are you aware of OPEC restrictions on output? The current price is politically controled and is not a true balance of supply and demand at all. Since OPEC controls a little under half the oil market and I cannot see how you can argue that the market isn't grossly distorted. OPEC doesn't produce anymore oil than it did in the early 70s, despite huge increases demand and having the ability to increase output.

OPEC only controls 38% of the market; that amount is falling each year because more and more production is coming from non-OPEC and previously nonproducing nations. The market is more reflective of supply and demand now than it was a decade ago; however, you are correct that there are still imbalances primarily due to the inflows of speculative money from investment firms that are temporarily propping up unjustified prices, especially in natural gas.

Except he has neither the resource nor the capacity.
Exactly. The reserves he is talking about, the heavy oil primarily from the Orinoco tar belt, is so thick it actually need to be mined in places rather than pumped because it cannot flow. There is no way this resource can be produced fast enough to satisfy rising world demand. The reason it will last 200 years is because it will take that long to get it out of the ground. This contrasts sharply with light, sweet crude, the stuff we are running out of, that flows like water and has been able to be produced at faster and faster levels relatively easily.

Except he has neither the resource nor the capacity.

They've got 77.2 billion barrels of proven reserves, making them seventh in the world. I'm guessing they are banking on significant expansion in both proven reserves and production to do this; the whole point is to increase their influence in OPEC and thereby gain more control over prices.

Technologically, they're also banking on the ability to get some of the ultra-heavy oil and tar out of the ground. This is a huge gamble for Venezuela to say the least.

All I hope is that Canada comes through with significant increases in production to diversify the market further.

OPEC only controls 38% of the market; that amount is falling each year because more and more production is coming from non-OPEC and previously nonproducing nations. The market is more reflective of supply and demand now than it was a decade ago; however, you are correct that there are still imbalances primarily due to the inflows of speculative money from investment firms that are temporarily propping up unjustified prices, especially in natural gas.
That's not true. Most non-opec oil producing nations have peaked and are in decline. If you look at the history of the world oil markets you'll notice that for the last several years expectant non-OPEC oil production growth has been consistently downgraded as country after country go into decline. OPEC will be enjoying a larger and larger market share in decades to come.

That's not true. Most non-opec oil producing nations have peaked and are in decline. If you look at the history of the world oil markets you'll notice that for the last several years expectant non-OPEC oil production growth has been consistently downgraded as country after country go into decline. OPEC will be enjoying a larger and larger market share in decades to come.

I'm looking at an EIA chart from 2004:
http://www.eia.doe.gov/emeu/cabs/images/worldoilprod.gif

At present, non-OPEC is growing and is outpacing OPEC production; of course, this doesn't deal with what will happen 5-10 years in the future but at present OPEC is losing market share.

I'm looking at an EIA chart from 2004:
http://www.eia.doe.gov/emeu/cabs/images/worldoilprod.gif

At present, non-OPEC is growing and is outpacing OPEC production; of course, this doesn't deal with what will happen 5-10 years in the future but at present OPEC is losing market share.
Yes, but you'll notice if you look at annoucements or news stories that non-OPEC supply growth has consistently been disappointing for the last half decade. Every year the IAE comes out with its non-OPEC supply growth estimates and every year that have to go back and adjust the numbers downward. Eventually, probabbly in the next couple years, there will be no supply growth. The largest oil field in teh world outside Saudi Arabia, Pemex's Canteral field in teh Gulf of Mexico, has just gone into decline. Alaska is in decline. The North Sea is in decline. No one expects to find another field of those sizes ever so where is the continued growth of non-OPEC oil to come frm? If you look at the EIAs estimates for oil demand they predict we will be using 120 million barrels/day by 2020 and even they say the lion's share of that oil will have to come from Saudi Arabia and the rest of OPEC. No one, not the EIA, the IAE the Oil and Gas Journal, the American Petroleum Institute, no on is predicting a continued loss of market share for OPEC in the coming years. On the contrary, they are predicting that there market share is going to rise dramatically. Of course, I have my serious doubts about there ability to produce that much oil.

Chávez seeks to peg oil at $50 a barrel.

Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.

A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.

"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."

The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.

According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.

Monday April 3, 2006
--OceanNews Limited©2006--

My comment:
#1) I wonder what SaudiArabia (and the Big US Oil-corps) have to say about all of this

#2) what do you all have to say? ;)

Dumb idea, it will lead to shortages.

They've got 77.2 billion barrels of proven reserves, making them seventh in the world. I'm guessing they are banking on significant expansion in both proven reserves and production to do this; the whole point is to increase their influence in OPEC and thereby gain more control over prices.

Technologically, they're also banking on the ability to get some of the ultra-heavy oil and tar out of the ground. This is a huge gamble for Venezuela to say the least.

All I hope is that Canada comes through with significant increases in production to diversify the market further.
1) There will be no expansion of reserves. There is nothing left to find.

2) There will be no further improvements in technology. It has reached perfection. It's now fluid mechanics and thermodynamics telling the world to get bent.

3) Canada can't do it either. They had to shut in 700 gas wells to mine kerogen last time they tried to expand their production. They're talking about nuclear power plants to provide the steam for the extraction process. It's stupid.

1) There will be no expansion of reserves. There is nothing left to find.

We don't know that for sure; many regions are still unexplored and the technology is still being developed to drill far deeper than we currently do.

2) There will be no further improvements in technology. It has reached perfection. It's now fluid mechanics and thermodynamics telling the world to get bent.

That's been said before with other technologies, and every time new advances have been developed that were previously seen as impossible, for example with computer processing power during the 1960's and 1970's. It is impossible to call a technology perfected especially one in as new a field as oil drilling.

3) Canada can't do it either. They had to shut in 700 gas wells to mine kerogen last time they tried to expand their production. They're talking about nuclear power plants to provide the steam for the extraction process. It's stupid.

I think if the process is profitable there will be people willing to make the investment to produce the oil and natural gas.

most people in the US (an many other countries) think that alcohol engines are only in the experimental stage.. They are not aware that Brazil been succesfully using vegetable fueled engines.. for 30 years.

Most Americans don't realize that there are already many flex fuel cars on the road over here now. We've had them for about 5 years. There are both US and foreign made flex fuel cars. You may even be driving one and not realize it.

Check it out.
http://www.e85fuel.com/e85101/flexfuelvehicles.php

.

1) There will be no expansion of reserves. There is nothing left to find.

2) There will be no further improvements in technology. It has reached perfection. It's now fluid mechanics and thermodynamics telling the world to get bent.

3) Canada can't do it either. They had to shut in 700 gas wells to mine kerogen last time they tried to expand their production. They're talking about nuclear power plants to provide the steam for the extraction process. It's stupid.
And that's the reality. We have two choices if we are to maintain our standard of living and it may actually be too late even were we to start now.

1. Pray for a new, miracle energy source.
2. Recognize the cheap, easy energy is a thing of the past and that oil was a one shot deal. Reorganize everything we do to make them more local and energy efficient. Move closer to where we work and where we get our food and water from. Invest in public transportation and fuel our energy infrastructure with renewables while understanding that these renewables will never be able to provide us with the freedom of mobility oil gave us.

Probably will just go to war with most of the rest of the world over what's left of the oil, though, and we'll come out of the next several decades with a fraction of the humans we have now left alive and a devastated environment.

I don't know if anyone else noticed the price of canned goods going up when gas went up.

Those of us on fixed incomes are acutely aware of everything increasing in price. And they're still rising.

.

This is an interesting move on his part for 3 reasons:

1)he can get some PR spin saying he is a friend of the little people sticking it to the capitalists by setting a lower ‘fair’ price.

2)He locks in long-term contracts that, while under market value at the moment, will net him greater profits when the price falls again. Not to mention the fixed price is above the level needed to make production economical, and even turn a nice profit – thus guaranteeing that he will not have to produce at a loss when the price falls

3)He reduces a current spike in prices, which is turning people away from oil consumption. Thus there is less downward pressure on demand.

In the short term the cost is a little cash (which hes been trashing his economy in so many other ways right now I doubt he has much consideration for it) but has good financial payoffs in the long-term. Additionally he gains some political capital by doing it.


And to those that say “the price will never fall! The world is out of oil and only those secretive oil barons that run the world are deluding us into not realizing that there will be no oil by this time next year, and the sky is falling, and Repent, for the end of the world is neigh!” Give it a break, this has been said approximately every 25 years since the late 19th century.

Great. Say hello to long lines and shortages. :rolleyes:

This is an interesting move on his part for 3 reasons:

1)he can get some PR spin saying he is a friend of the little people sticking it to the capitalists by setting a lower ‘fair’ price.

2)He locks in long-term contracts that, while under market value at the moment, will net him greater profits when the price falls again. Not to mention the fixed price is above the level needed to make production economical, and even turn a nice profit – thus guaranteeing that he will not have to produce at a loss when the price falls

3)He reduces a current spike in prices, which is turning people away from oil consumption. Thus there is less downward pressure on demand.

In the short term the cost is a little cash (which hes been trashing his economy in so many other ways right now I doubt he has much consideration for it) but has good financial payoffs in the long-term. Additionally he gains some political capital by doing it.


And to those that say “the price will never fall! The world is out of oil and only those secretive oil barons that run the world are deluding us into not realizing that there will be no oil by this time next year, and the sky is falling, and Repent, for the end of the world is neigh!” Give it a break, this has been said approximately every 25 years since the late 19th century.
Great strategy. Ridculously distort an argument to make it sound less reasonable. There are a great many very informed and influential companies and geologists and economists that disagree with you. If what you're saying is true, just answer one simple question. Where's the extra oil going to come from?

We don't know that for sure; many regions are still unexplored and the technology is still being developed to drill far deeper than we currently do.
Thermal cracking? Hello? You're not going to find oil below 4.5km unless the rock layers got forced down very recently. Ever. And it's not about sticking a straw into some random place, and the deeper you go the more likely it is you will find oil. It has to be the right geology, the right age, the right conditions, right down to rock porosity. Try sucking glue through concrete.

That's been said before with other technologies, and every time new advances have been developed that were previously seen as impossible, for example with computer processing power during the 1960's and 1970's. It is impossible to call a technology perfected especially one in as new a field as oil drilling.
It's not new, and it hasn't been said before. Oil field technology is maxed, and the law of diminishing returns is brutal. The Saudis have a 4D holographic model generated by the best sensors in the world and one of the world's best supercomputer resources. Net benefit - a few percent, and their production will still collapse once the water level reaches their horizontal wells.

I think if the process is profitable there will be people willing to make the investment to produce the oil and natural gas.
It's profitable to produce what's left. It's not profitable to produce what isn't there.

Great strategy. Ridculously distort an argument to make it sound less reasonable. There are a great many very informed and influential companies and geologists and economists that disagree with you. If what you're saying is true, just answer one simple question. Where's the extra oil going to come from?

We don't really know where it's going to come from other that extra production in OPEC, Canada, and Russia. However, the US also has a lot of unexplored areas that are locked up offshore and there are other places previously unexplored.

I think the main concern isn't going to be falling production but rather a limit to the amount produceable at any given time; no matter what, demand will eventually outstrip supply and that will force us to develop other sources to replace the oil we consume.

It's profitable to produce what's left. It's not profitable to produce what isn't there.And what petroleum is left is so heavy that the rates it can be produced do not allow for increases in overall petroleum production so even if we start to produce this stuff, and we will, we cannot expect continued growth. We can't replace an oil well that allows liquid with the viscosity of water to be pushed up through it at tremendous rates with an oil mine that we have to dig out to produce and expect that production will actually increase.

Chavez will peg the price of oil, the Venezualan economy will go even further down the toilet and they'll put it back up again.

Seriously, how long is this joker going to try to pretend he's the leader of a wealthy country? Having oil does not automatically make you rich. This guy lives in luxury and gives oil away while his population live in poverty. Can a Socialist please explain how this is a good thing?

Thermal cracking? Hello? You're not going to find oil below 4.5km unless the rock layers got forced down very recently. Ever. And it's not about sticking a straw into some random place, and the deeper you go the more likely it is you will find oil. It has to be the right geology, the right age, the right conditions, right down to rock porosity. Try sucking glue through concrete.[QUOTE]

You know more than I do, and I'm not a geologist, so I'll have to go with your judgement on this one. Can't say anything about the depth of drilling but I've read numerous news reports of new oil discoveries of some magnitude in multiple areas around the world.


[QUOTE]It's not new, and it hasn't been said before. Oil field technology is maxed, and the law of diminishing returns is brutal. The Saudis have a 4D holographic model generated by the best sensors in the world and one of the world's best supercomputer resources. Net benefit - a few percent, and their production will still collapse once the water level reaches their horizontal wells.

Is the process entirely efficent and entirely capable of maximizing utilization of all kinds of usable hydrocarbons? If it isn't then the technology is not fully maxed out.

It's profitable to produce what's left. It's not profitable to produce what isn't there.

We don't know for certain what is there; there are new discoveries being made all of the time.

I think the main concern isn't going to be falling production...
Erm... like America's falling production since 1971 was never a concern? Like the UK's halving of production between 2000 and 2010 and cessation by 2020 isn't a concern? Try looking at the production - time curves for every producing country in the world. It will sober you up somewhat.

We don't really know where it's going to come from other that extra production in OPEC, Canada, and Russia. However, the US also has a lot of unexplored areas that are locked up offshore and there are other places previously unexplored.That's a common misconception. the places left that have not been explored have not been explored precisely because they are unlikely contain significant amounts of oil. The concept is very simple. If I put you in a parking lot and asked you to find objects of various size ranging from an SUV to a grain of sand, what are you going to find first? What are you going to find last?

Why have all the major oil companies been canabalizing each other? The reason is that, in order to continue to grow, they have to report reserve replacements that exceed production. The only way they have been able to do this for the better part of the last decade is by buying smaller oil companies, not through exploration.

I think the main concern isn't going to be falling production but rather a limit to the amount produceable at any given time;that's just another way of saying falling production. Production = amount produced/time no matter what, demand will eventually outstrip supply and that will force us to develop other sources to replace the oil we consume.
Which, of course, means we need to avoid price controls like that proposed by Chavez.

Here's a graph for all of you who think we've got a lot left to find.

http://wolf.readinglitho.co.uk/chartimages/d/d1oildiscavproj.gif

That's a common misconception. the places left that have not been explored have not been explored precisely because they are unlikely contain significant amounts of oil. The concept is very simple. If I put you in a parking lot and asked you to find objects of various size ranging from an SUV to a grain of sand, what are you going to find first? What are you going to find last?

Most deposits will be small, but there are areas that haven't been previously explorable. The most important thing is to get ourselves away from oil as fast as possible.

Why have all the major oil companies been canabalizing each other? The reason is that, in order to continue to grow, they have to report reserve replacements that exceed production. The only way they have been able to do this for the better part of the last decade is by buying smaller oil companies, not through exploration.

A lot of them bought each other because oil was so cheap and they were not profitable due to the low price. Exxon-mobil merged because Mobil was running the risk of bankruptcy. However, you are also correct in that some merged to prop up the size of their reserves.

that's just another way of saying falling production. Production = amount produced/time

Falling production in the sense that the amount found will not be sufficent to meet demand but only to keep supply constant. I think it's going to be a supply crunch caused by slowing supply growth rather than a plunge in production, and it may occur slowly enough for us to avoid economic disruption. It's going to level off rather than follow a bell curve.

It's the same thing as what is happening in the US with natural gas right now; our production level is constant although isn't falling but demand is still growing, forcing us to import it from other areas; I think that is what will happen with oil.

Which, of course, means we need to avoid price controls like that proposed by Chavez.

Absolutely. I couldn't agree more that price controls are not what we need right now.

My grandfather rode a camal.
My father drove a car.
I fly an airplane.
My son will ride a camal.LOL..

The graph above you says you're wrong about it not being a bell curve and since most of that graph is history its not really arguable.

Can't say anything about the depth of drilling but I've read numerous news reports of new oil discoveries of some magnitude in multiple areas around the world.
They're at the lower limit of viability. A 10 million barrel field is the dregs. 100 million barrels is pathetic. 1bn barrels is small. These days, across the world, we're finding 6bn and using 30bn, and what we do find is full of vanadium, sulphur, and other crap. Many new fields are only useful for road surfacing. Most oil companies are closing their exploration divisions and keeping their accountants happy through acquisitions - the average age of a petroleum geologist is near retirement age.

Is the process entirely efficent and entirely capable of maximizing utilization of all kinds of usable hydrocarbons?
Yes. You can do anything you want. You can walk through the rock in VR if you have the cash. And you can't accuse the companies of not having the cash. The second-biggest driver of supercomputer research after the nuclear weapons labs, are the oil companies.

We don't know for certain what is there; there are new discoveries being made all of the time.
We do. You can eliminate vast tracts of the globe by looking at the geology. The discoveries today are crap. And if you plot cumulative discoveries vs cumulative wildcats, you can see what's left out there. It's a finite resource, therefore there is an asymptote. ;)

And yes, I don't meant to sound arrogant, but my educational background and employment are solid energy industry. I doubt there is anyone on this forum better informed than I am.

Here's a graph for all of you who think we've got a lot find.http://wolf.readinglitho.co.uk/chartimages/d/d1oildiscavproj.gif

I agree with that site in quite a few of its aspects; still, I think it is not going to be an apocalyptic decline but rather more gradual simply because the market mechanisms will affect demand considerably enough to prolong the rate of depletion.

Most deposits will be small, but there are areas that haven't been previously explorable. The most important thing is to get ourselves away from oil as fast as possible.We'll be getting ourselves away from oil wether we like it or not. The earth is giving us no choice. The only decision we have to make is do we want to do it the hard way or do we want to do it the really, really, really hard way.

They're at the lower limit of viability. A 10 million barrel field is the dregs. 100 million barrels is pathetic. 1bn barrels is small. These days, across the world, we're finding 6bn and using 30bn, and what we do find is full of vanadium, sulphur, and other crap. Many new fields are only useful for road surfacing. Most oil companies are closing their exploration divisions and keeping their accountants happy through acquisitions - the average age of a petroleum geologist is near retirement age.

That seems like a major failiure on the part of the companies as well as any geological problems. The market is going to have to deal with this somehow...


Yes. You can do anything you want. You can walk through the rock in VR if you have the cash. And you can't accuse the companies of not having the cash. The second-biggest driver of supercomputer research after the nuclear weapons labs, are the oil companies.

Well, then the markets are going to have to take care of it from here. There isn't much we can really do about it other than reduce and transition demand. However, it seems the people hardest hit from this will be the developing economies because they are the ones driving demand and are the least efficent economically.

We do. You can eliminate vast tracts of the globe by looking at the geology. The discoveries today are crap. And if you plot cumulative discoveries vs cumulative wildcats, you can see what's left out there. It's a finite resource, therefore there is an asymptote. ;)

That sucks...hopefully, we'll be able to address the situation before it's too late.

And yes, I don't meant to sound arrogant, but my educational background and employment are solid energy industry. I doubt there is anyone on this forum better informed than I am.

Cannot argue with that. It's not arrogance if it's true.

And yes, I don't meant to sound arrogant, but my educational background and employment are solid energy industry. I doubt there is anyone on this forum better informed than I am.
And I don't have an educational background in energy but have come to the same conclusions as you because anyone who spends a significant amount of time reading about oil and energy in general must arrive at the same conclusions. The only people who seem to disagree are the economists who don't understand finite resources because their science grew up in the Age Of Oil and therefore cannot compute a reality with less petroleum. For the last 100+ years it's been, "Short on copper? No worry, we'll use this new oil powered machinary to get more out of the ground. Short on water? No worry, we'll use oil to pump it to you from 1,500 miles away. Short on food? No worry, we'll use these oil based fertalizers and pesticides to increase yoru yields by 300%. Short on oil? No worry... oh... ummmmmmmm....."

We'll be getting ourselves away from oil wether we like it or not. The earth is giving us no choice. The only decision we have to make is do we want to do it the hard way or do we want to do it the really, really, really hard way.

I think we'll do it the hard way; IIRC the 1970's oil shocks prolonged Hubbert's predictions by a few decades. However, the economy is more efficent energywise with each dollar of GDP, so we will be able to reduce demand with more moderate effects on the economies of the developed world in terms of inflation, and the more mature monetary policy will be invaluable.

So hopefully, another 1970's era of prolonged high prices will do the same to prolong the decline in production due to demand destruction. As long as we don't attempt price controls or anything else, we'll avoid the really, really hard way.

The real chaos is going to be in the developed world, where they really can't reduce demand. India is a good sign though; they have healthy growth with much more moderate oil demand growth than any other nation of similar growth rates. Perhaps more countries will follow that path.

I think we'll do it the hard way; IIRC the 1970's oil shocks prolonged Hubbert's predictions by a few decades. However, the economy is more efficent energywise with each dollar of GDP, so we will be able to reduce demand with more moderate effects on the economies of the developed world in terms of inflation, and the more mature monetary policy will be invaluable.

So hopefully, another 1970's era of prolonged high prices will do the same to prolong the decline in production due to demand destruction. As long as we don't attempt price controls or anything else, we'll avoid the really, really hard way.

The real chaos is going to be in the developed world, where they really can't reduce demand. India is a good sign though; they have healthy growth with much more moderate oil demand growth than any other nation of similar growth rates. Perhaps more countries will follow that path.
As has been said, predictions are very dangerous, especially in regards to the future. Having said that it is usually the drug addict that suffers most from a withdrawl of the drug. The US currently burns 20+ million barrels/day. that's one of every four produced. We may be way higher up on the ladder, but that means we have much farther to fall. Can we avoid complete devestation? Sure. Will we? :confused:

As has been said, predictions are very dangerous, especially in regards to the future. Having said that it is usually the drug addict that suffers most from a withdrawl of the drug. The US currently burns 20+ million barrels/day. that's one of every four produced. We may be way higher up on the ladder, but that means we have much farther to fall. Can we avoid complete devestation? Sure. Will we? :confused:

I think the US could easily use less oil; Europe has a population of about 100 million more than us and a larger GDP yet uses 29% less oil. That would save 6 million barrels per day and would make our economy even more insulated against price shocks.

As much as I dislike government intervention, I think we need many more and stricter laws to reduce oil consumption. Even if there is some short term economic loss the long term benefits are far greater; we can be much more efficent than we currently are.

At present, I think the market will affect demand; US oil consumption fell last year yet the economy grew by 3.5% and unemployment fell to 4.9%. I think it's entirely possible to make the transition successfully, although it would be the developed nations that weather the storm without serious losses.

Well, I cant say I know much about the economy, or the market, etc..., but it seems to me that if this ultimately results in oil prices increasing, from an environmental point of view that is likely to be a good thing, the last thing the world needs is lots more oil being combusted and so giving off greenhouse gases, whereas if it leads to oil prices staying low for quite a while, that aint so good, since there will be less imperative to develop alternative fuels...

Europe is built differently to the US. And I mean half a billion people having different urban planning, different transport infrastructure, driving different cars. The US could be as energy-efficient as Europe, but only if it rebuilt every town and city, switched to different cars and altered its social and economic model. It had its wake-up calls in 1973 and the early 1980s and did nothing. I doubt it is capable of doing anything different this time around. Frankly the US is still in denial, and its inertia is such that when people do realise what's up, it wouldn't be able to change even if it wasn't too late already.

The strongest argument against the survival of the US is the fact that it doesn't know this is happening.

I think the US could easily use less oil; Europe has a population of about 100 million more than us and a larger GDP yet uses 29% less oil. That would save 6 million barrels per day and would make our economy even more insulated against price shocks.

As much as I dislike government intervention, I think we need many more and stricter laws to reduce oil consumption. Even if there is some short term economic loss the long term benefits are far greater; we can be much more efficent than we currently are.

At present, I think the market will affect demand; US oil consumption fell last year yet the economy grew by 3.5% and unemployment fell to 4.9%. I think it's entirely possible to make the transition successfully, although it would be the developed nations that weather the storm without serious losses.
Europe uses much less oil because they live where they work and have a public transport system that they have built up over the last 70 years. We live miles and miles away from where we work and have very little public transport, especially in the outer bands of sprawl. Think about the economic devestation. The homeowner who got his new house in Palmdale and drives into Los Angeles everyday to work. In 5 years his gasoline bill will likely be more expensive than his mortgage payments and his mortgage will be way more than his home is now worth. What's he to do? Walk away from his home? What about food? What do we do about the fact that over the last 30 years we have paved over all of the viable farm land near our cities and replaced them with suburbs who property values were propped up by the availability of cheap oil? We have no trains. Building them post peak may not be possible since the materials needed to build them are all dependent on cheap oil to be produced. When you really sit down and consider all the changes that we need to make it is quite mind boggling and depressing.

Having said all that, I really am more of an optimist than I come across at times, but its because the only way we are going to get out of this with a livable community is if we have a project on the scale of the rebuilding of the Pacific Fleet after pearl harbor. We need a national referendum and a single mindedness that has not existed in this country in a long time and we don't have that yet. We're all asleep and all this polyanna talk about how markets will fix it and ethenol will rescue us just makes it less likely that we will do what is necessary before its too late. Hell, it may already be too late to avoid much of the devestation Peak Oil will bring.

Europe is built differently to the US. And I mean half a billion people having different urban planning, different transport infrastructure, driving different cars. The US could be as energy-efficient as Europe, but only if it rebuilt every town and city, switched to different cars and altered its social and economic model. It had its wake-up calls in 1973 and the early 1980s and did nothing. I doubt it is capable of doing anything different this time around. Frankly the US is still in denial, and its inertia is such that when people do realise what's up, it wouldn't be able to change even if it wasn't too late already.

The market's going to force these changes first, and if it's not sufficent the government will be forced to step in. I think expensive gas, combined with (if necessary) taxes to force up oil prices and discourage inefficent vehicles will do a lot to get these changes.

This country is in denial, given the furor over price gouging where it doesn't exist.

The strongest argument against the survival of the US is the fact that it doesn't know this is happening.

We're getting woken up; if anything the troubles of GM and Ford are a clear sign that the market is starting to change. I think we'll need a clear spike in prices and a real government initiative to get the ball rolling, but it will happen.

All I hope is that alternative fuels become more and more energy efficent; they are somewhat now, but we're going to need more efficency if we're going to put a huge dent in demand. Plug in hybrids will help too; I think it will happen, but it's still speculative.

You do realize that by doing what they are doing, the oil market will be extremely volitial.

Also, I would like to see a link to this.
Not really, unless only CITGO gets the oil, what'll happen is the price of the rest of the supplies might go down a buck or two per barrel. Otherwise CITGO will just have lower prices, but since the quality of their gas sucks anyway, it won't change that much.

The market's going to force these changes first, and if it's not sufficent the government will be forced to step in. I think expensive gas, combined with (if necessary) taxes to force up oil prices and discourage inefficent vehicles will do a lot to get these changes.
The market has failed already. The 1979 shock and early-1980s recession, coupled with the global discovery decline since peak in 1965 was the "signal". The time for governments to start acting has been ticking for several years now.

We're getting woken up; if anything the troubles of GM and Ford are a clear sign that the market is starting to change. I think we'll need a clear spike in prices and a real government initiative to get the ball rolling, but it will happen.
Kinda late, really they should have closed by now and been replaced by European, Korean and Japanese companies.

All I hope is that alternative fuels become more and more energy efficent; they are somewhat now, but we're going to need more efficency if we're going to put a huge dent in demand. Plug in hybrids will help too; I think it will happen, but it's still speculative.
Regarding hybrids, I hope you don't mean plugging them into electricity grids. Non-linear harmonic-producing loads tend to be bad news, as in, the whole network melts after rush hour. The future isn't one of 'alternative fuels', it's one of no cars in the first place. That's a paradigm shift you have to accept - there will be no private transport, and much of globalisation will have to reverse and give way to regionalisation. The only way you have the luxury of eating New Zealand apples for example, is near-zero shipping costs. That will change.

Kinda late, really they should have closed by now and been replaced by European, Korean and Japanese companies.
Not really, if they would eradicate the unions they could probably compete, and in case you haven't notived, the euros ain't doing so hot on the car market. BMW is still floating along pretty nicely, but Audi, Porche, and VW have been flailing quite a bit. The same is true of most other major european carmakers.


As for there being no private transport BWAHAHAHAHAHAHA.

As for there being no private transport BWAHAHAHAHAHAHA.
Hmm, well extrapolate say, a 3.5% annual decline rate to 2030 and say that. :rolleyes:

Not really, if they would eradicate the unions they could probably compete, and in case you haven't notived, the euros ain't doing so hot on the car market. BMW is still floating along pretty nicely, but Audi, Porche, and VW have been flailing quite a bit. The same is true of most other major european carmakers.
Oh, and the European car manufacturers don't need to eradicate the unions to beat their American competition. :p

That's not to say their days aren't numbered either.

An interesting tidbit from www.marketwatch.com

DUBLIN, Ireland, Apr 03, 2006 (BUSINESS WIRE) -- Research and Markets ( http://www.researchandmarkets.com/reports/c35170) has announced the addition of China Energy Market Trends Report 2006 to their offering.
A new report details the current and future state of the energy industry in China. This report is for strategists and researchers seeking to identify market potential for their products and services in all sectors of the China energy industry. Give yourself the competitive edge with this soon-to-be published report.
China's economic trajectory has driven its expanding energy needs, and it is now the world's second largest energy consumer behind the United States. Accompanying this increasing energy demand has been a growing dependence on imported oil, and China is now the world's third largest oil importer. China will continue to be a major player in world energy markets, but increasing energy demands pose tremendous challenges.
China's present phase of economic and industrial development requires higher energy consumption per unit compared with developed nations. China's energy sector has enormous potential, especially the coal, petroleum and natural gas industries, yet China is currently a net importer of oil, and imports are expected to increase to more than 900 million barrels in 2006, against a total demand of 1.993 billion barrels per year. China is looking to expand its production of coal, natural gas, and renewable energy sources such as nuclear, solar and hydroelectric power to meet the enormous appetite for energy spawned by its massive industrial complex and consumer sectors.
It is estimated that in 2020, China will need 2.8 billion tons of coal and 600 million tons of crude oil, two and a half times more than in 2000. Given this scenario, China will need to import 250 million tons of petroleum, about 70%, from foreign sources. What's more, its carbon emissions will reach 1.94 billion tons, and China will likely overtake the US as the nation with the highest greenhouse gas emissions.Who wants to bet that China will never burn that much oil because there will not be that much to burn?

And I don't have an educational background in energy but have come to the same conclusions as you because anyone who spends a significant amount of time reading about oil and energy in general must arrive at the same conclusions. The only people who seem to disagree are the economists who don't understand finite resources because their science grew up in the Age Of Oil and therefore cannot compute a reality with less petroleum. For the last 100+ years it's been, "Short on copper? No worry, we'll use this new oil powered machinary to get more out of the ground. Short on water? No worry, we'll use oil to pump it to you from 1,500 miles away. Short on food? No worry, we'll use these oil based fertalizers and pesticides to increase yoru yields by 300%. Short on oil? No worry... oh... ummmmmmmm....."


Oil is still very cheap. That is why we have not curbed our consumption.

When the price of oil goes up, there are a lot of things that could very easily be done to drastically reduce our demand.

First off, simple things like keeping tires properly inflated to changing the air filter regularly would cause a huge reduction in national demand. Even though the amount per car is fairly minor, it adds up.

Secondly, diesel engines are far more efficient. Moving to diesel would reduce the need for oil by a considerable amount. Diesels tend to have about twice the fuel efficiency of gasoline engines, so switching engines would create a huge savings.

Additionally, most gasoline engines these days are quite capable of burning a high ethanol/gas mixture. In the case of reduced imports of oil, the mixture we put in our tanks can be greatly diluted with ethanol.

Bio-diesel plants are cropping up all over the place now (sorry, couldn’t resist the pun) so demand for oil can be dropped even more.

There are innumerable ways for us to reduce demand for oil. As price goes up, demand will fall. That is why most economists are not running around screaming about how the sky is falling – we understand that there is such a thing as elasticity of demand.

Oil is still very cheap. That is why we have not curbed our consumption.

When the price of oil goes up, there are a lot of things that could very easily be done to drastically reduce our demand.

First off, simple things like keeping tires properly inflated to changing the air filter regularly would cause a huge reduction in national demand. Even though the amount per can is fairly minor, it adds up.

Secondly, diesel engines are far more efficient. Moving to diesel would reduce the need for oil by a considerable amount. Diesels tend to have about twice the fuel efficiency of gasoline engines, so switching engines would create a huge savings.

Additionally, most gasoline engines these days are quite capable of burning a high ethanol/gas mixture. In the case of reduced imports of oil, the mixture we put in our tanks can be greatly diluted with ethanol.

Bio-diesel plants are cropping up all over the place now (sorry, couldn’t resist the pun) so demand for oil can be dropped even more.

There are innumerable ways for us to reduce demand for oil. As price goes up, demand will fall. That is why most economists are not running around screaming about how the sky is falling – we understand that there is such a thing as elasticity of demand.
What economists don't understand is that somewhere around 90 barrels of oil goes into the production of one car. There are 700,000,000 cars on the planet. 200,000,000 in the US. Who's gonna make all those cars and with what oil when world oil production is declining? Economists, well at least some economist, also don't understand that ethanol is a net energy loser. it takes more oil to grow, fertalize, harvest and transport the organic material than you get from the process. And yeah, I think we should all keep our tires, which, of course, are made out of oil at full pressure. Also, we shoudl maintain our roads, which, of course, are made out of oil.