mattisawesome

Well boys,
I thought I would post about this since I currently work in the oilfield. I work in a market analysis role and have my ears to the ground on much of this stuff, like the price of oil and such.(Planning on transitioning to a pilot in the next few years.) It is looking like oil prices may have peaked and that demand may be leveling off. The introduction of alternate fuel, hybrid cars, the mortgage crisis, and the credit crunch in the US seems to be slowing demand. Oil supply is still tight but hopefully $100/bbl oil will not be something that sticks around for long. Many people are predicting $70-80/bbl oil, which is much better for the whole economy. Just thought I'd share some potentially good news.

rickair7777

I agree, Everything seen seems to indicate that $100 is not realistic given current supply vs. demand...this price spike was driven by speculation. $60-70 seems closer to the mark.

atpcliff

Hi!

I saw some analysts on TV last week, and they said, if you took ALL the speculation out of the price of oil now, it would settle down to about $80-$85/barrel.

The CEO of Shell said that, if things continue as they are, the world will run out of cheap, easy to access oil (like we have now) in 7 years, and it will be a MAJOR problem.

He said if countries and businesses work together starting NOW for conservation and alternative energy sources, it would be possible to avoid a major problem.

$10B per year for 10 years will get us the technology we need to wean us from oil. Let's start TODAY!!!

cliff
YIP

PS-It was $89 yesterday, and $92 today. It won't peak long-term until we quit using oil as an auto/truck fuel. I'm guessing it will peak at about $150/barrel, but $250 or more due to some major problem/situation wouldn't surprise me.

rickair7777

He's certainly in a position to be informed, but 7 years is way on the low side. You also have to look at his motive for making a statement like that...perhaps he's hoping to increase speculative interest to enhhance his options position?

But agree that agressive development of alternative fuels and energy sources would help ease the sting when the time comes.

waflyboy

Where did you get this from? What is the assumption on how that $100B is to be used?

I believe it will take much more investment than that to simply make the transition less painful as oil supplies become tighter.

What alternative fuels will we use to power trucks, trains, ships, and aircraft? How much will development of those technologies cost? How much will replacement of oil-era infrastructure cost? Does that $100B guarantee that science will make new discoveries, rendering oil obsolete?

mattisawesome

Many people are making dire predictions but there are many places we haven't drilled yet and many sources of oil that are still untapped. Canada has more oil than Saudi Arabia in the Oil Sands. ANWR has a ton of oil. There is alot of oil off of the east coast of Florida and don't even get me started about off shore California. There is tons of heavy oil in Colorado/Wyoming and Utah. There is also a ton of oil under the arctic shelf and the gulf is not nearly as tapped as it could be. While I respect the CEO of Shell, I find it interesting that he would ignore these many sources of oil. However, some of them, require laws being taken off the books. There are other things you guys may not know, for instance you can convert coal into gasoline/diesel/avgas/jet fuel. These plants require a high initial investment but once online can produce fuels at about $35-40/bbl. If we built some new refineries that would do alot to decrease the price but we haven't built a new refinery in 25 years. Also, if we could switch to nuclear power for electricity that would take a huge strain off of oil. I believe the free market could work if some of these restrictions were lifted and you would see many of these dire predictions start to level off. I am sorry but I wholeheartedly disagree that we are heading for a global crisis any time sooner than the next 30 years.

waflyboy

Matt,

Let's assume that the resources you've discussed can be exploited easily with reasonable investment.

Do you discount the effects of global climate change due to our exploitation of fossil fuels? What about the environmental impact of exploiting the Canadian oil sands and oil shale of Utah?

I believe we have a responsibility to preserve the environment. Don't you?

mattisawesome

waflyboy,
Couple of things....global climate change has been going on for hundreds of thousands of years. And I will preface by saying this...if man is responsible for changing the climate as much as Al Gore predicts then we absolutely should do something about it. I'm pretty open minded on this subject, but I think there are other reasons for us to get off of oil besides global warming: National security, our own economic health and our ability to continue to be a major economic power.

Let me briefly go into another point with out making this extremely political:

1. In reality I do not see enough evidence for making the case that man is reaking such havoc on the environment and the globe that we will destroy ourselves in the way many people think. I also think there is enough evidence to the contrary to say that we are not having much of an effect at all. There are ice core samples from the middle ages saying it was warmer then than it is now...how do you account for that? That implies that the earth cools and warms without our help.

2. I naturally tend to be skeptical about doomsday claims. The very fact that media, scientists and other influential environmentalists are now calling it "Global Climate Change" instead of global warming should throw up some red flags. I've read that weather balloon data has indicated only slightly warmer surface temperatures but that if global warming were as bad as climate models predict that the upper atmostphere would be warming as well. However, there is no indication that this warming is going on anywhere above the surface. Also it takes hundreds of years for oceans to cool and warm and the biggest emitter of carbon dioxide on Earth is oceans. When oceans warm they give off carbon dioxide and one thing that Al Gore doesn't show you is that carbon dioxide levels follow temperature and not the other way around. On many graphs there is as much as a 400 year lag between temperature and carbon dioxide levels.

3. My main point here is that we just don't know about climate change and many climatologists say that we don't have enough information to start making drastic economic decisions. There are also scientists saying that some of the antarctic ice melting could be due to underwater volcanoes. I've also heard that we've been on a cooling trend since 98 and that we need to get read for a global cooling. Scientists said 30 years ago(all though I realize they didn't have quite the technology we do now) that we were entering the next ice age.

4. I do think that we certainly have a responsibility to preserve the environment and asking me such a question is a bit silly. You don't know how tight regulations are in the oil and gas industry on surface pipe, and conductor pipe and what happens if you make a stupid mistake and you let oil or gas leak into the water table. This used to be a big problem but I can guarantee you that these things are not as bad as they once were. You and I, however, agree that we should do what we can as quickly as we can to get as much off of oil as we can. Unfortunately right now and for a very long time it will be part of how we power our world. I know this is redundant but I'm mainly saying that there is not enough data to support the drastic changes that would supposedly be required to "curb" global warming.

The Chow

For the most part I think we can start using water or at least the hydrogen part of water for our energy. But before that is viable and affordable we should do everything we can do use the resources we have at home. Not only do we have all the options that Matt stated, but we have capped oil wells in TX and OK from the '80s. They were capped because oil fell to $10 a barrel.

aerospacepilot

And how do we get H2 of earth? We have to use electricity to turn water in hydrogen. And where do we get the electricity from? No matter how you slice it, we need to use a renewable form of energy in our power grid, otherwise hydrogen is just a method of energy storage, not a form of energy.