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2006-04-24 Home Front Economy

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Posted by 3dc 2006-04-24 17:02|| || Front Page|| [1 views since 2007-05-07] Top

#1 Flying out of Austin a few months back, I sat next to a senior geologist. He figured mother earth was still in the oil producing business. He also said there was plenty remaining, the challenge was getting at it.

Posted by Besoeker 2006-04-24 17:10|| 2006-04-24 17:10|| Front Page Top

#2 Nah, the problem is risk. The wellhead cost of oil in the major Middle East oilfields is $1.50/b and the industry worries that is the real floor price of oil. Developing oilfields that have much higher costs sets them up to lose enormous amounts of money, even though as the author points out the higher costs may be less than a third of the current price.

However, he is dead wrong about higher oil prices encouraging 'alternative fuels'. Higher prices will encourage production of oil from alternative sources. The reasons are the enormous inertia in how energy is consumed and basic economics.

Posted by phil_b">phil_b 2006-04-24 18:01|| http://autonomousoperation.blogspot.com/]">[http://autonomousoperation.blogspot.com/] 2006-04-24 18:01|| Front Page Top

#3 Oh no, phil_b, do you mean we won't move from the hydrocarbon to the carbohydrate economy next year?

Posted by Nimble Spemble 2006-04-24 18:23|| 2006-04-24 18:23|| Front Page Top

#4 We will get off the hydrocarbon economy around the same time Antartica becomes the only habitable continent.

Posted by phil_b">phil_b 2006-04-24 18:34|| http://autonomousoperation.blogspot.com/]">[http://autonomousoperation.blogspot.com/] 2006-04-24 18:34|| Front Page Top

#5 Time to establish the $10 bbl tariff for any price below $25 a barrel, let's have foreign suppliers start paying off our debts. God knows we've paid enough of theirs over the years.

Posted by Jaiter Glarong1019 2006-04-24 21:27|| 2006-04-24 21:27|| Front Page Top

#6 phil_b: Nah, the problem is risk. The wellhead cost of oil in the major Middle East oilfields is $1.50/b and the industry worries that is the real floor price of oil.

I agree. The ultimate problem with people who talk about alternatives to oil as an energy source is that there aren't any, cost-wise. Oil is the preferred energy source for several reasons - it is cheap to produce, packed with energy and easy to transport. Given its other characteristics, as long as oil is cheap to produce, it will remain the preferred energy source. The world doesn't have an addiction to oil - it has an addiction to cheap energy. And it's pointless for Americans to migrate to machinery that use more expensive (to produce and to buy) energy sources, because oil prices would simply fall to accomodate the drop in demand due to our self-imposed abstinence - benefitting our economic competitors at our expense. Think of these cockamamie schemes as an American subsidy to foreign oil consumers.

Let the market work its will - as oil prices spike, countries that use oil for power generation will switch to more economical sources, like nuclear or coal power. People will start switching over to more fuel-efficient cars. Living closer to work will come into vogue again, as monthly gasoline bills start approaching $400 a month. Bottom line is that it's silly to get too worried about gas prices - if they go up, we will simply use less of it. Life will go on. And not resemble anything like a scene out of Road Warrior.

Posted by Zhang Fei 2006-04-24 21:31|| http://timurileng.blogspot.com]">[http://timurileng.blogspot.com] 2006-04-24 21:31|| Front Page Top

#7 Exconnelt assessment Zhang Fei. I'm losing -0- sleep over it.

Posted by Besoeker 2006-04-24 21:34|| 2006-04-24 21:34|| Front Page Top

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