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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 (54465)	9/4/2009 12:12:38 AM
From: Elroy Jetson	2 Recommendations Respond to of 218118

I think your comments are very close to the truth. We are slowing depleting oil reserves but we're not running out of energy. Since Drake found oil at a 69 foot depth in 1858 oil has been running out. Oil production at less than 100 foot depths peaked a very long time ago. In spite of "running out" he inflation adjusted price of oil declined steadily over time. Especially over the past 40 years, oil price has been greatly influenced by economic conditions. In a very real sense, high oil prices have been their own cure as they help lead to an economic recession. We continue to find oil, such as recent finds offshore Brazil and the Gulf of Mexico. But the cost of this oil is somewhat higher. At current oil prices the costs of exploration and production will eat up most of the value of the oil extracted. So this does place a floor under "crude oil". Yet while this goes on in the world of oil, there has been tremendous increases in the amount of natural gas found and produced, leading natural gas prices to fall to levels not seen in decades. Inflation adjusted natural gas prices in North America are now possibly less expensive than at any time during your lifetime. I'd have to check. I've always found the commotion surrounding "peak oil" production sort of amusing. There are occasional short-term imbalances but I don't see a long term energy scarcity. .

To: Seeker of Truth who wrote (54465)	9/4/2009 1:58:41 AM
From: elmatador	Respond to of 218118

Price of oil derivatives (gasoline, Diesel, Avgas) have little to do with the price of oil itself. It is very distorted by subsidies, speculation and taxation.

To: Seeker of Truth who wrote (54465)	9/4/2009 2:24:24 AM
From: Maurice Winn	2 Recommendations Read Replies (1) \| Respond to of 218118

SoT, the long run equilibrium price of oil is more like $40 a barrel than $100. Above $40, there are all sorts of competitors and technologies which become economic. Look at the huge shift from SUVs for example. 2 tons of steel is not needed to move 70 kg of human. Insulation is as good to keep air warm as constantly heating it as fast as the heat escapes. Cyberspace can move information a lot easier than carrying a piece of paper can do. Photovoltaics, cellulose, coal, methane, ElM's beloved ethanol, and other energy sources all want their day in the sun and at some oil price they become competitive for each application. For years my job was to know about fuels and prices and advise BP on fuel technologies, research and development. Oil simply can't go to $200 a barrel other than in a short squeeze type situation, war, or other supply disruption. The long run marginal cost of production of energy is something like $40 a barrel in 2008 dollars [or maybe 2007 dollars = all that stimulus "quantitative easing" has messed things up]. The universe is made of energy, as you can see by studying the sun for a while. The question is just a matter of what it costs to get that cosmos of umpty peta quadrillion tons of energy from galaxies and everywhere into a form we like. It would be perfectly reasonable to relocate to the inside of a giant rotating sphere fueled by fusion reactions. Not actually launch whole humans - just DNA, or maybe just cyberspace, leaving wet chemistry back on Earth. Humans are just chimps writ large, probably destined to end our share of the evolutionary process as carbon bearing creatures on the surface of the planet which produced us. Some of us sooner than others. Mqurice