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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (1444)	10/22/2005 5:51:10 PM
From: Elroy Jetson	Read Replies (4) \| Respond to of 218435

As I've said in previous posts, over time we have needed to drill deeper and use crude which requires additional costly refining. On August 28, 1859 Drakes well struck oil at only 69 feet. Since then, its only become more costly, but economies of scale have resulted in lower inflation adjusted refined product prices, in spite of the increased costs. home.pacbell.net So in this sense, oil and gas have been "peaking" since 1859. There is no denying this. In the 1970s many oil companies, including Chevron, over-anticipated this change and made major investments in Geothermal, Solar, Wind Power, Shale Oil, Tar Sands and other alternate energies. It provided good experience and advanced the various technologies while yielding spectacular losses as oil prices plunged. At various price points, these technologies become economic and add to the total energy mix. This will be a gradual process. I am wholly confident that people who believe "the peak of oil production happened last year" and its all downhill -- into a future of economies crippled by a lack of oil -- is utter nonsense. Oil prices are high due to the Bush War in Iraq, which has interrupted oil supply and created heavy additional demand for refined products. Chevron and other oil companies expand their refining capacity and their sources of oil slowly as their market demand increases. The hurdle price for oil projects had risen from $18 in 1974 to $24 in 1981, and oil thought prices were going well over $100 per barrel. Today's $27.50 price will be slowly raised as needed to maintain enough oil supply. Oil companies aren't going to create a crash drilling program and build new refineries to alleviate the temporarily high prices caused by the war in Iraq. Reaching to produce new supplies of oil at $35 per barrel when market demand over the next twenty years can be fully supplied by others producing at $27 per barrel is the end of your company. Some people believe that moving manufacturing facilities from the industrialized world to China has doubled the need for oil since there are now twice as many factories needing energy. This concept is so obviously false that I won't even bother to comment on it. We are long over-due for a really bad recession and the consumer is horribly over-indebted, but this has nothing to do with "peak oil production", but it will give oil prices a horrible beating as demand shrinks. .

To: Seeker of Truth who wrote (1444)	10/22/2005 10:52:53 PM
From: elmatador	Respond to of 218435

"If there were so much oil left in the ground, how is it that the price is now $57 a barrel for Brent crude?" 1) Because the market is manipulated. 2) Because there are three big oil producers where exploration was blocked due to the US embargoes: Libya, Iraq and Iran. 3) Price of gasoline reflects government taxes and not the cost of the crude. Want to have cheap gasoline? Just drop the taxes. 4) If people 'bought' Y2K they can easily buy the idea that oil has peaked.