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Gasoline prices: the end of an era. - Page 16  

post #226 of 240
Quote:
Originally Posted by saint.panda
To give absolute figures, the world's known reserves in 2000 have increased to almost 1 trillion barrels while consumption has increased more gradually to a couple billion barrels a year. (Source Simon Julian et al. not sure which book exactly; EIA)


Oh man, I don't even know where to begin. The #s are many times lies. Reserve figures are virtually impossible to verify and they tend to go up for no good reason other than political motives, _esp._ amongst OPEC members. Evidence of Enron'esque fudging has been going since the late 80s.

Quote:
Originally Posted by saint.panda
Since known oil reserves have the tendency to grow with time and due to people getting better at exploiting oil (location, extraction, transportation, storage, etc.), oil shouldn't run out too soon yet. Long before that, something cheaper, more efficient and more widely accepted will have hopefully and most likely replaced oil.
Long before? Several very well credentialled experts expect it to occur before the end of the decade, one, Matt Simmons (bio) believes as early as Q4. That is peak production and/or demand outstripping production capacity - which _is_ the issue. Saying 'running out' confuscates things.

And I agree with you in principle. The problem is one of scale and time.

First and foremost take a look at the Hirsch report. It was commisioned by the DOE and released earlier this year.

http://www.projectcensored.org/newsf..._Proj_Cens.pdf

Dr. Hirsch's bio

Then move on over to

www.peakoil.com


For those who don't wish to wade through the full Hirsch report this is a cut and paste from the conclusion section


XI. SUMMARY AND CONCLUDING REMARKS
Our analysis leads to the following conclusions and final thoughts.

1. World Oil Peaking is Going to Happen
World production of conventional oil will reach a maximum and decline
thereafter. That maximum is called the peak. A number of competent
forecasters project peaking within a decade; others contend it will occur
later. Prediction of the peaking is extremely difficult because of geological
complexities, measurement problems, pricing variations, demand elasticity,
and political influences. Peaking will happen, but the timing is uncertain.

2. Oil Peaking Could Cost the U.S. Economy Dearly
Over the past century the development of the U.S. economy and lifestyle
has been fundamentally shaped by the availability of abundant, low-cost oil.
Oil scarcity and several-fold oil price increases due to world oil production
peaking could have dramatic impacts. The decade after the onset of world
oil peaking may resemble the period after the 1973-74 oil embargo, and the
economic loss to the United States could be measured on a trillion-dollar
scale. Aggressive, appropriately timed fuel efficiency and substitute fuel
production could provide substantial mitigation.

3. Oil Peaking Presents a Unique Challenge
The world has never faced a problem like this. Without massive mitigation
more than a decade before the fact, the problem will be pervasive and will
not be temporary. Previous energy transitions (wood to coal and coal to oil)
were gradual and evolutionary; oil peaking will be abrupt and revolutionary.

4. The Problem is Liquid Fuels
Under business-as-usual conditions, world oil demand will continue
to grow, increasing approximately two percent per year for the next few
decades. This growth will be driven primarily by the transportation sector.
The economic and physical lifetimes of existing transportation equipment
are measured on decade time-scales. Since turnover rates are low, rapid
changeover in transportation end-use equipment is inherently impossible.
Oil peaking represents a liquid fuels problem, not an “energy crisis” in the
sense that term has been used. Motor vehicles, aircraft, trains, and ships
simply have no ready alternative to liquid fuels. Non-hydrocarbon-based
energy sources, such as solar, wind, photovoltaics, nuclear power,
geothermal, fusion, etc. produce electricity, not liquid fuels, so their
widespread use in transportation is at best decades away. Accordingly,
mitigation of declining world oil production must be narrowly focused.

5. Mitigation Efforts Will Require Substantial Time
Mitigation will require an intense effort over decades. This inescapable
conclusion is based on the time required to replace vast numbers of liquid
fuel consuming vehicles and the time required to build a substantial number
of substitute fuel production facilities. Our scenarios analysis shows:
• Waiting until world oil production peaks before taking crash program
action would leave the world with a significant liquid fuel deficit for more
than two decades.
• Initiating a mitigation crash program 10 years before world oil peaking
helps considerably but still leaves a liquid fuels shortfall roughly a decade
after the time that oil would have peaked.
• Initiating a mitigation crash program 20 years before peaking appears to
offer the possibility of avoiding a world liquid fuels shortfall for the forecast
period.
The obvious conclusion from this analysis is that with adequate, timely
mitigation, the economic costs to the world can be minimized. If mitigation
were to be too little, too late, world supply/demand balance will be achieved
through massive demand destruction (shortages), which would translate to
significant economic hardship.
There will be no quick fixes. Even crash programs will require more than a
decade to yield substantial relief.

6. Both Supply and Demand Will Require Attention
Sustained high oil prices will stimulate some level of forced demand
reduction. Stricter end-use efficiency requirements can further reduce
embedded demand, but substantial, world-scale change will require a
decade or more. Production of large amounts of substitute liquid fuels can
and must be provided. A number of commercial or near-commercial
substitute fuel production technologies are currently available, so the
production of large amounts of substitute liquid fuels is technically and
economically feasible, albeit time-consuming and expensive.

7. It Is a Matter of Risk Management
The peaking of world conventional oil production presents a classic risk
management problem:

• Mitigation efforts initiated earlier than required may turn out
to be premature, if peaking is long delayed.
• On the other hand, if peaking is imminent, failure to initiate
timely mitigation could be extremely damaging.
Prudent risk management requires the planning and implementation of
mitigation well before peaking. Early mitigation will almost certainly be less
expensive and less damaging to the world’s economies than delayed
mitigation.

8. Government Intervention Will be Required
Intervention by governments will be required, because the economic and
social implications of oil peaking would otherwise be chaotic. The
experiences of the 1970s and 1980s offer important lessons and guidance
as to government actions that might be more or less desirable. But the
process will not be easy. Expediency may require major changes to
existing administrative and regulatory procedures such as lengthy
environmental reviews and lengthy public involvement.

9. Economic Upheaval is Not Inevitable
Without mitigation, the peaking of world oil production will almost certainly
cause major economic upheaval. However, given enough lead-time, the
problems are soluble with existing technologies. New technologies are
certain to help but on a longer time scale. Appropriately executed risk
management could dramatically minimize the damages that might otherwise
occur.

10. More Information is Needed
The most effective action to combat the peaking of world oil production
requires better understanding of a number of issues. Is it possible to have
relatively clear signals as to when peaking might occur? It would be
desirable to have potential mitigation actions better defined with respect to
cost, potential capacity, timing, etc. Various risks and possible benefits of
possible mitigation actions need to be examined. (See Appendix V for a list
of possible follow-on studies).
post #227 of 240
The scary point that I was trying to make is that leaders of certain countries may become intent on bringing western democracies to their knees; i.e., this goal may become more important to them than gaining additional economic wealth for themselves. This could occur if any middle eastern oil producer aligns themselves with Bin Laden's cause, and this could actually happen to several absolute monarchies, that are clearly despotic, and that could readily be overthrown. If the Saudi monarchy is overthrown, or if Venezuela's Chavez, or all sorts of other oil producers turn against us because of religious or cultural fervor, or political motivations, they could readily cut off their oil exports to western democracies. But, such oil producers would still be able to sell their oil to emerging economic giants such as China and India. So, they would still retain very large markets for their oil. IMHO, the position of our economy (and therefore our economic stability, and consequently our national security) are quite precarious in the current climate of cultural and religious zealotry.

Quote:
Originally Posted by TWIFOSP
If they were to do that, they would cut off their own economic growth.

Oil prices go up -> People can't afford to spend money on goods including imports -> oil prices go up more -> companies cut back on jobs to afford transportation costs -> people get layed off -> employement rates suffer -> economic depression -> no one can afford oil -> oil producing countries have no other real exports -> they have their own economic depression -> we all lose.

It's fairly simple, most oil producing countries rely on oil as their #1 export that accounts for the real majority of their GNP. If they cripple our economy (or Europes or Chinas), their own economy will crash harder than ours ever will.
post #228 of 240
Quote:
Originally Posted by mikeg
The scary point that I was trying to make is that leaders of certain countries may become intent on bringing western democracies to their knees; i.e., this goal may become more important to them than gaining additional economic wealth for themselves
I think you are being paranoid about the "motives" of the rest of the world. Everyone knows that Asia is the economy to invest in. The eyes are not upon USA anymore.

Western democracy (any democracy for that matter) is strictly directed inwards from a global point of view. As long as WE are going ok - that is all that matters.


Quote:
they could readily cut off their oil exports to western democracies. But, such oil producers would still be able to sell their oil to emerging economic giants such as China and India
As long as USA is the biggest consumer - they will not indulge in such wild fantasies. India and China are nowhere close to being consumers on the scale of USA.


Quote:
IMHO, the position of our economy (and therefore our economic stability, and consequently our national security) are quite precarious in the current climate of cultural and religious zealotry.
Sure - but this is more "Their Advantage" than "Your Loss" because geographically - USA never had the oil in the first place

Point being - as we grow out of dependency on oil and focus on R&D for workable alternative solutions - we cease to be their primary consumers.

Ideally - USA should consume the same as India and China. This will give us a chance to break free should the need arise.

Moving OIL DEPENDENT industries overseas is also a good move in the current economic situation. Companies that rely on petroleum products and byproducts for manufacturing - can move manufacturing overseas. Setting up industries IN places like Iraq etc. will improve their local economy and bilateral relations between the countries.

The solutions are not easy - but sitting back and worrying about possible conflagarations over oil is the least productive thing anyone can do or even speculate upon.
post #229 of 240
Here is an idea that I don't think was mentioned before. The United States has sufficient coal deposits to satisfy our needs for several hundred years, and coal can often serve as a substitute for oil. Coal can be reprocessed to a combustible gas for distribution through existing natural gas pipelines. Coal derived gas can also be used to power cars, in place of gasoline. I also believe that hydrocarbon liquids, that resemble petroleum oil, can be obtained by reprocessing coal. Therefore, such coal derivatives can probably be used to make plastics, and many other products that are now made from petroleum oil. I believe that cost has been the main obtacle to using coal for all of these purposes; i.e., use of petroleum oil was cheaper than using coal. But, with the current dramatic increases in the price of petroleum oil, it's just possible that reprocessing coal may be becoming cost effective. And, by substituting domestically mined coal for imported petroleum oil, we may enhance our national security by eliminating our dependance on importing oil from politically unstable countries.
post #230 of 240
gs - Calling me "paranoid" is a bit strong (except, of course, when it comes to headphones). Perhaps terms such as fearful, apprehensive, or concerned are more accurate. Please notice that I wasn't speaking about the entire world not exporting oil to us. I referred solely to middle eastern oil producing countries, the bulk of whose populations are sympathetic to Bin Laden, and whose rulers are despotic absolute monarchs. IMO such countries are politically unstable, and it's quite possible that, if they turn fundamentalist, their oil exports to western democracies may cease. As for the US being the biggest oil consumer, from what I've been reading, China is rapidly catching up. And, with China and India having populations of 1.2 billion each, and with their economies booming, I think that they will offer oil producers a very large market, which could free such oil exporters from their dependance on exporting oil to us. And, South American nations such as Chile and others are also rapidly increasing their use of oil. So, my point that oil producers could exert national power through the selective marketing of their oil, doesn't seem unreasonable. Also, notice that in a previously posted news article about Chaves, he is quoted as saying that he isn't afraid to hurt his country's economy by stopping oil exports to the United States. Such a threat by an oil producing country's leader, IMO hints at what can happen.
post #231 of 240
I called you paranoid because I see in your words the same "paranoia" that grips many people in the west.

Quote:
Originally Posted by mikeg
I referred solely to middle eastern oil producing countries, the bulk of whose populations are sympathetic to Bin Laden
Are you sure about this? Where are the facts? Statistics? Popularity Polls?
Nobody wants Bin Laden on their hands. He is bad for business...

Quote:
and whose rulers are despotic absolute monarchs
That is their way of life, their culture...the only way they can keep things in order. Trying to introduce democracy in a culture tuned to monarchy since the early ages is MADNESS and IRRESPONSIBLE unless the "consequences" are evaluated first. It is like trying to tame a wild animal - you can isolate it and put it behind a cage - it will bite if you step into the cage.

Democracy is a "CHOICE" made by the people - not something that can be enforced upon them. Cultures that adopted democracy made the choice, withstood the resistance to change and brought about the change. Maybe the Arab culture will also do so in due course of time.

Quote:
As for the US being the biggest oil consumer, from what I've been reading, China is rapidly catching up. And, with China and India having populations of 1.2 billion each, and with their economies booming, I think that they will offer oil producers a very large market
The average Indian takes the bus/walks to his place of work. Most Chinese LIVE at the place of work. Recreational "driving" is unheard of in most places like India. I would have driven, in my 5 years of driving in India, what I have driven in 1 year, in USA. And I come from a forward, well to do family with more vehicles than any other family in the city.

Quote:
my point that oil producers could exert their national power through the selective marketing of their oil, doesn't seem unreasonable.
No it is not unreasonable - this is just our disadvantage. I fully expect them to exercise this option should the need arise. It will be headlines soon - Saudi imposes oil sanctions upon USA and it's allies.

What can we do about it? WW-III is a certainty and the central point WILL be oil reserves in the middle east.

Quote:
Such a threat by an oil producing country's leader, IMO hints what can happen.

From his point of view - stupid move unless he has 200% guarantee that the middle east will also adopt a similar stance. He will be crushed by an internal rebellion if his policy results in more money for the middle east - and less money for his own people.


It is just a matter of time and oil

gs
post #232 of 240
gs - Thanks for your clarifications. BTW, I got the Koss ESP/950 back, fully repaired. No more distortion, but the sound is rather limited. More soon. One more thing. What do you think of my posting #229, regarding coal?
post #233 of 240
Quote:
Originally Posted by mikeg
and coal can often serve as a substitute for oil
Difficult for several reasons:

1] Efficiency : How much coal do you need to produce sufficient gas to get a car from one place to another? Compare this with the amount of gasoline needed for the same task

2] Safety : It is easier to handle a liquid like gasoline as opposed to a gas like LPG*/NG

3] By-Products : Coal processing inevitably results in additional pollution by way of Carbon Particles (ash, soot...etc.). Gasoline IS the cleaner fuel. Of course LPG and NG will be cleaner but you cannot discount the pollution caused during the processing stages.

4] Transportation - pipelines for gasoline = bad idea. Easier to manage liquids that are non-compressible as opposed to compressible and inflammable gases.

5] Timeline - we arent prepared to handle Coal. India is, China is...they still rely HEAVILY on coal for their energy. I worked at a electric plant that used coal as fuel. Ive also worked in Nuclear power plants.


I think the future lies in the atom. Regulated use of fissile material to power cars, buses, schools...this is the only way I can see. Solar isnt enough, water...again impractical.


*LPG - Yes it is Liquefied but only under pressure. How can it be transported over pipelines while maintaining the "safer" liquid state is the question. Possible over short distances...but over miles and miles of pipelines?
post #234 of 240
Guru - Thanks for your comments regarding the use of coal. The fact that we have a limitless supply of the stuff, and because oil prices keep increasing, I think that coal derivatives will eventually replace oil for many purposes.
post #235 of 240
Quote:
Originally Posted by mikeg
The fact that we have a limitless supply of the stuff
Coal + Wet wood chips (apple/cedar etc.) + Steak ready for grilling

YUM!

So easy to forget the world's problems...We need to head back into caves and start hunting mammoths...
post #236 of 240
Does anyone know how the development on hydrogen fuel storage is coming along?

Mod edit: Response to earlier political comments has been deleted.
post #237 of 240
Quote:
Originally Posted by gsferrari
WHAT use is a truck that can do 160mph when the maximum speed limit is only 65? How about a truck that is efficiently designed to reach a top speed of 80 mph? Suitable gearing, reduced engine size without sacrificing torque (gearing), improved fuel efficiency (vastly). This will also prevent speeding on the interstates, de-regulated law enforcement vehicles will have an easier job capturing runaways.
Heh, here in Europe we have a "voluntary" governed max speed for cars of 250Kmh - 155Mph, which is generally adhered to by the main manufs - excepting their top-of-the range cars of course..."sports car" manufs ignore this entirely
And we have a "voluntary" governed max speed for bikes of 300Kmh - 186Mph
However, we live in an age where a fairly normal "family" saloon/hatchback/estate car can reach 140Mph...what kind of family needs that? The Andretti family?
Up until about 15 years ago it was widely believed that safety would never sell cars - people wanted glamour, excitement, image. That has changed profoundly now, with safety near or at the top of many peoples (especially families) priorities...and the perception of SUVs is that they are safe unless you are in a small car about to be t-boned by one, so we ALL better buy SUVs, hence the arms race.
Maybe carin' sharin' economy is just an image-transformation away?
post #238 of 240
http://news.bbc.co.uk/2/hi/business/4165350.stm

"Goldman Sachs expects that a barrel of US light crude will still cost close to $60 at the end of the decade.

While Merrill's [Lynch] global energy team also raised its forecasts for long-term US crude prices by 40%, it sees a more manageable price of $42 a barrel by 2009. "
post #239 of 240

New York Times Article: Breaking Point

Nice little article in the NY Times on the oil depletion issue...

http://www.nytimes.com/2005/08/21/ma...l?pagewanted=1
post #240 of 240
Thanks for that link! Great, really informative article. The part that really hit home for me was this:

''The kingdom and Ghawar field are not the problem. That misses the whole point. The problem is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You're leaping by two million to three million a year, and if you have to cover declines, that's another four to five million.'' In other words, if demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional six to eight million barrels a day -- at least two million new barrels a day to meet the rising demand and at least four million to compensate for the declining production of existing fields. ''That's like a whole new Saudi Arabia every couple of years,'' Husseini said. ''It can't be done indefinitely. It's not sustainable.''
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