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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Wyätt Gwyön who wrote (41997)9/21/2005 1:47:35 PM
From: Elroy Jetson  Read Replies (1) of 110194
 
We have experienced Peak Oil of that sort for the past 150 years. Our current "shortage" is caused by not having enough upgraded refineries to handle the changing mix of crude oil, just like the 1976-1982 period.

a.) In order to find oil over the past 150 years, we had to explore and drill deeper -- at greater dollar and energy cost.

b.) Scarcity drove oil cost to the point where we used all of the hydrocarbons we refined, instead of throwing most of them into the nearest creek.

c.) Prior to the 1940s there was enough super-light sweet crude that refining was a simple distillation process In the 1940s, we were forced into using catalytic cracking to be able to use heavier crude oil types. As we move to even heavier crude types and sour crude, this has been replace by fluidic hydro-cracking, hydro-roasting, alkylation, and certain proprietary processes. All of this requires greater energy and dollar cost.

You see, Oil resources have been diminishing for a very long time.

Just like the 1976-1982 period, our current "shortage" is caused by not having enough upgraded refineries to handle the changing mix of crude oil. The "Windfall Profits Tax" during the Carter era induced oil companies to upgrade refineries to avoid the tax. Once upgraded, they could handle a far broader range of crude oil and crude oil prices plummeted.

As for BP. Chevron and BP have long enjoyed a close working relationship. Both have frosty relations with Exxon.
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