Peak Oil is a Myth, Part 2

OPEC has decided not to increase output at this time to lower prices.

OPEC officials have said they will not act on policy at this week’s heads of state summit in Riyadh, reserving discussion until they meet formally in Abu Dhabi on December 5.

“I would like to say to the Energy Secretary… that we don’t want to see any shortage in supply, that this question will be raised in our meeting in Abu Dhabi,” Badri told a news conference ahead of an OPEC heads of state summit in the Saudi capital.

“At this time, frankly, we don’t see that we should add more oil, but this is up to the ministers to decide.”

Badri said there was no reason for oil to reach $100, as it almost did last week, and continued to blame refinery bottlenecks, geopolitical issues and the weak U.S. dollar for oil’s ascent from below $70 a barrel in mid-August.

Despite what the peak oil theorists think, oil isn’t running out. You have OPEC fixing the price and supply. They’re making huge profits by keeping supplies tight and prices high. They can use oil as a political tool to get what they want from the major powers.

Price fixing, fears of war in Iran and bottlenecking is why we’re seeing these oil prices. Not vanishing oil supplies. Watch prices drop once the Iraq conflict becomes even more stable (as it has been) and war rhetoric with Iran simmers down. 

BUT BUT BUT.....Ron Paul told us we illegaly invaded Iraq to take their oil.....And Nancy Pelosi told us “her” Congress would lower oil prices…
RIIIIIIIGHT!

Warmest Regards,
jn

Posted by  on  11/14  at  11:28 AM

Oh, come on, JN...you know as well as I do…

Supply and demand have NOTHING to do with ANYTHING. It’s all Bush’s fault. Haven’t you been reading the papers?

Posted by Dave Marron  on  11/14  at  12:31 PM

I wrote a lengthy comment on yesterday’s “peak oil” entry but it evaporated while I was spellchecking it. When will I learn to write in Notepad and copy/paste over?
Anyway, here’s the short version.  “Peak oil” has long been considered a laughable joke among working petro-geologists.  I know because before I moved to the USA I spent all my years after high school working in the oil patch, the last few in exploration.  So, yeah, I know what I’m talking about.  It seems that every few years, when some reporter reads a Shell Oil annual report that notes they have “eight years of known reserves” they freak out.  This is simply because they have no clue how the system works.
Example: when you go to the store for groceries, do you buy a decade’s worth?  No?  Well, oil exploration is expensive, too.  Companies don’t do it until they have to, because, unlike governments, they can’t just print more money when they need it.  They have to work within a budget. So they decided what sort of buffer they want, size the budget, and try to keep that number of bbls in the bank.  And once every few years they roll a winner: Mexico stumbled onto a deposit in 2006 that almost doubled the size of its known reserves.  Brazil’s Tupi field more than doubled its known reserves: over half of which have been discovered in the past five years. (So a “peak oil” analysis of Brazil written 6 years ago would have been in error by 300%.  Hmm.)
And none of the peak oil hysterics ever take into account technology.  To them, better exploration and extraction techniques, financially viable use of oil shale and tar sands, improvements in refinery efficiency...all are simply ignored.
The truth of the matter is that people in the oil patch believe we’ll end up leaving trillions of barrels of “known reserves” in the ground when technology moves past the need for most of it in a couple decades. BP has already moved a big chunk of their exploration budget into alt energy, producing some of the most economical and efficient solar power panels in the world.  Word is Exxon is going to partner with Westinghouse to make next-gen pebble-bed nuclear reactors.
The peak oil hysterics look at this and scream that Big Oil Knows!  It’s going to run out!  Aieee!!  If they actually, y’know, asked, they’d find out the reason these moves are being made is because they expect to have too much oil, not too little.
But it’s futile to try to convince the tinfoil hat brigade of anything, isn’t it?

Posted by  on  11/14  at  04:46 PM

You are far too reasonable, Toren. If you were really emotional, you may have reached the peakers.

BTW,I heard the other day that EVIIIL Big Oil companies account for about 10% of oil production and ownership. The remaining 90% of producers and owners of oil reserves are COUNTRIES, most of which have massive stores of MONEY they have been raking in from EVIIIL oil.

Posted by  on  11/14  at  05:52 PM

There’s lots of alternative energy and energy saving inventions on here.

As Lomberg put it: “We didn’t leave the stone age behind for lack of rocks.”

There is insane qualities of resources on the Earth. It’s a planet!

If you look at our technology from the beginning to end of the 20th century, we came an incredibly long way. We will make all the stuff available today look as corny as 1900 technology does now, in half the time or less. Technology is accelerating at mind boggling speeds. We will be laughing about stuff like all these hysterias in 50 years. Just like we laugh about Y2K now.

Unless the AGW peeps manage to seriously screw up society with their anti-progress ways. Progressives indeed. Pfft.

Posted by  on  11/14  at  06:07 PM

I’m not so sure who to blame.  The prices are inflated relative to supply situation.  According to OPEC claims, it seems speculators have entered the scene and may be responsible for jacking up the price in the commodities market.  This did happen once before and OPEC did flood the market deliberately with oil and it wasn’t until they ran out of places to store it, did the price drop. 

Gasoline, OTOH, increases disproportionately higher than the price of oil, even though oil is roughly half the cost of making gas.  That situation deserves our ire more.

Posted by  on  11/17  at  06:36 AM

Speculators are definitely part of the problem.

Gasoline is also price way because of limited refineries and too many boutique fuels demanded by state laws. If we had one fuel standard for gasoline that would lower prices. So would building more refineries. But thanks to greens, that won’t happen anytime soon.

Posted by  on  11/17  at  08:01 AM

I blame Nixon for signing the agreement to create the E.P.A. AND the loss of proper history being taught in American schools.

The green shirt crowd is worse than the Hilter brown shirts.

Warmest Regards,
jn

Posted by  on  11/21  at  12:10 PM
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