Quote :

"THE world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational. The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, M de Margerie said in an interview with The Times. Forecasters, such as the International Energy Agency (IEA), have failed to consider the speed at which new resources can be brought into production, he believes. * Click here to find out more! “Numbers like 120 million barrels per day will never be reached, never,” he said. "

http://business.timesonline.co.uk/article/0,,13130-2124287,00.html

Ok LoneSnark et. al, let's hear how you're smarter than this guy and somehow know more than he does.

[Edited on April 8, 2006 at 4:07 PM. Reason : .]

4/8/2006 4:07:48 PM

Hmm. I actually never considered acceleration of use vs production speed.

4/8/2006 4:15:18 PM

PANIC!!!

4/8/2006 4:26:39 PM

it's already been painfully evident that the oil companies' drive for profits has left us with not nearly enough refineries.

and their refusal to build more will leave us in a huge lurch by the time demand surpasses capacity, which is already happening and is going to happen to a disastrous level sooner rather than later.

we need to be throwing millions more into any and all alternative fuel techs.

[Edited on April 8, 2006 at 4:29 PM. Reason : *]

4/8/2006 4:29:11 PM

it has been that way for years

we have to build new refineries

if we did that the price would drop

as it is now, there is no buffer since we are at something like 99.5% of capacity

[Edited on April 8, 2006 at 4:30 PM. Reason : yea, all the same stuff]

4/8/2006 4:29:54 PM

BUILD MORE REFINERIES!!!!!! THAT WILL SOLVE ALL OF THE PROBLEMS WITH OIL SUPPLY!!

4/8/2006 4:37:57 PM

well i read the thread title as companies not being able to satisfy the refined oil thirst of the world

but whatever

4/8/2006 4:46:44 PM

Building more refineries is only a short term patch.

Also, oil companies know that the amount of oil left to be drilled is limited, and building more refineries will allow them to turn more oil into usable fuel but the increased availability will result in lower prices at the pump, and lower profits due to a combination of supply/demand and the costs associated with building and maintaining new refineries.

Maintaining status quo will allow them to sell fuel at a higher profit for a longer time. They have no financial incentive whatsoever to build more refineries or to switch to alternative fuels at this point in time.

4/8/2006 4:51:53 PM

^ding

4/8/2006 5:05:28 PM

Quote :

"DirtyGreek: Ok LoneSnark et. al, let's hear how you're smarter than this guy and somehow know more than he does."

You environmentalists are so cute

When easily accessible/drillable oil runs out (not likely to happen in our lifetimes), the market price of oil will climb enough to make it cost-effective for getting oil through other means, like the thoroughly environmentally-unfriendly process of extracting oil from Canadian tar sands.

Do as many "OMG we're all gonna die!!1" studies as you want, oil will be around for a couple more centuries at worst...

4/8/2006 5:27:54 PM

isnt that guy french?
i think i made my point

4/8/2006 6:02:09 PM

^^
Well, I'm an environmentalists and I'm not putting all my money into oil derivatives anytime soon. I guess this is the ultimate trump card for the peak oilers--why are they not invested heavily into future markets?

Still, one hopes technology comes and saves Alberta from being scraped to bedrock and NW Colorado from becoming a superfund site.

4/8/2006 6:19:45 PM

Simple, that guy is French and betting against the human race's ability to drill for oil. He doesn't seem to doubt that the oil is there, just that we can't get to it fast enough (he can't say the oil isn't there because Saudi Arabia is still pumping oil at an average of $1.50 per barrel and selling it for $60).

This sounds fishy for one large reason: As of right now, we aren't trying that hard to get at it. The US normally spends less than 2% of its GDP acquiring all the oil it needs (domestic and imported, in 2005 it was up to 2.6%). If dollars equate to effort, then we were working over twice as hard in 1980 to get the oil we wanted (4.7% of GDP).

A second reason it sounds fishy is that it assumes oil consumption must rise in the future regardless of circumstances. For starters, it doesn't fit historically because between 1973 and 1983 U.S oil consumption declined by 13 percent. So, while oil consumption is obviously increasing right now it doesn't follow that after mankind realizes high oil prices are here to stay we will not reverse that trend.

Third, the projections of the IEA most likely is taking a low point reading at the bottom of the 2002 recession and a high-point reading after a full recovery, and extrapolating into the future. I suspect as the recovery solidifies oil demand growth will slow (as unemployment drops more people drive to work, but it can't drop forever).

Fourth, they are assuming there will be no recessions between now and 2030;

Fifth, chinese growth will remain above 10% until 2030, nevermind the unstable banking system or diminishing rates of return;

So, pick apart all these reasons. But you must remember the ultimate reason, oil consumption cannot exceed oil production, by definition. If we want more than we have, the price goes higher. Over the next 20 years, people will maximize their own utility functions by reducing oil consumption.

4/8/2006 7:00:14 PM

Quote :

"Christophe de Margerie... French"

i stopped reading after that. i dont need any further proof that he is wrong.

4/8/2006 8:45:27 PM

4/9/2006 12:49:55 AM

Year:___US Population:__US Oil Consumption:___GDP:
1973____211,908,788_____6.3 Billion/yr_______$4.3 trillion
1983____233,791,994_____5.7 Billion/yr_______$5.4 trillion


OMG! What happened! There were more of us, we were living more comfortably, and yet consumed less resources! Your petri-dish analogy doesn't fit the human race at all!

A more accurate description of the Human Race would be if the bacteria all got jobs operating farms which turn the bacteria waste back into sugar using photosynthesis and CO2 from the air. After awhile, some bacteria built schools and factories, learned how to excape the dish by turning the dish-plastic into tools and vehicles. Yes, there is a finite quantity of dish, but they don't need it because they can now harvest resources from anywhere, thanks to the freedom of their individuals to truck and trade.

[Edited on April 9, 2006 at 1:30 AM. Reason : petri-tale]

4/9/2006 1:24:02 AM

Are you seriously looking at the population of the US and claiming less world oil consumption?

4/9/2006 9:31:00 AM

ok first of all, its a FRENCH man saying that something isn't possible. duh. why is this news?

second of all,

Quote :

"They have no financial incentive whatsoever to build more refineries or to switch to alternative fuels at this point in time."

they have a very huge incentive to keep oil prices just below the cost that will make alternative energy sources financially appealing. Once another energy ball gets rolling, its pretty much the end of the road for oil.

4/9/2006 9:48:30 AM

^^ Uh, no, I'm looking at the US population and claiming less US oil consumption. why?

If you would prefer, I could state it this way:
Year:___World Population:__World Oil Consumption:___GDP:
1973____3.93 billion________21.0 Billion/yr_______?
1983____4.69 billion________18.2 Billion/yr_______?

Again, OMG! What happened! There were far more of us, we were living more comfortably, and yet consumed less resources! Your petri-dish analogy doesn't fit the human race at all!
(I used just the U.S. earlier because statistics were easier to come by; these statistics I had to calculate myself from disperate graphs)

4/9/2006 10:40:32 AM

lonesnark, you seriously just took us population and us gdp and tried to extrapolate it to the entire world. you must really be interested in only the people of the us and not care about anyone else

4/9/2006 10:41:29 AM

^ What's that? I used World Population, and World Oil Consumption, I just couldn't find GWP so I left it blank (if anyone could find per-capita GWP for me that would be swell )

I am merely seeking the truth, whatever that may be. And the truth is, mankind has demonstrated numerous times the ability to do more with less.

4/9/2006 10:47:21 AM

neither the gdp nor the gwp is any indication of how comfortable the world is

there are 800 million chronically hungry people, and many many millions in poverty, war, and under dictatatorial control

4/9/2006 10:57:16 AM

you can thank the french and continental europeans with their stupid-ass aid w/ no strings policies for that

4/9/2006 10:59:46 AM

If you would prefer, I could state it this way:
Year:___World Population:__World Oil Consumption:___GDP:
1973____3.93 billion________21.0 Billion/yr_______?
1983____4.69 billion________18.2 Billion/yr_______?
2002____6.21 billion________28.5 Billion/yr_______?

2002 data sources:
http://www.eia.doe.gov/oiaf/ieo/oil.html
http://www.unfpa.org/swp/2002/english/indicators/pdf/pdf2.pdf

the 2002-2005 data (which I can't find) would be very interesting as the recent extreme upswing in oil consumption by India and China occurred during this time.

4/9/2006 11:20:50 AM

Quote :

"neither the gdp nor the gwp is any indication of how comfortable the world is there are 800 million chronically hungry people, and many many millions in poverty, war, and under dictatatorial control"

Wow, just wow. You ask me to prove that world oil demand need not always rise and I do so, and all I can get out of you is something completely irrelevant to the discussion.

Are you arguing mankind was much worse off in 1983 compared to 1973? If so, demonstrate that some how. Was a greater percentage of people going hungry in 1983 compared to 1973? If so, then you must demonstrate that was because oil consumption had fallen.

Since it appears you have nothing to add of relevance, I declare victory over your French nut-job, as you requested I do. Prop's to me, crow to you.

4/9/2006 11:36:01 AM

ok here is a random fact i learned in 11th grade environmental science ap, might help put things in perspective

if the world just all the sudden said "we are only gonna get oil from alaska", there is a 6 month supply in alaska that could meet the worlds daily requirements as they stand, and i took that class in 2001-2002

sorry i just like random ass facts like that

4/9/2006 12:53:14 PM

Basic fucking economics. Prices go up because we can't refine it fast enough, corporations build more refineries/become more efficient at refining and voila, supply = demand at equlibrium price and you can shut the fuck up. People have been clammoring about this shit forever and it isn't going to happen. Its basic economics.

4/9/2006 2:22:23 PM

Quote :

"I guess this is the ultimate trump card for the peak oilers--why are they not invested heavily into future markets? "

I'm pretty sure Gold will still be around in the future, but I'm not invested in its futures.

Its because I have better investment alternatives NOW than oil futures or gold futures, not because I'm not confident in their continued existence.

4/9/2006 2:25:21 PM

^ You misunderstand. If you believe oil is going to become scarce in the future then you must believe the price is going to rise in the future then you must believe the current price is too low. As such, if you believe oil is going to be selling for $100 in 2007, then buying it for $60 right now is a no brainer: it would be a 66% return on your investment in only one year!

Show me another investment that offers such returns and I'll eat my hat.

4/9/2006 3:08:11 PM

do hybrids make the price go up or down

i had a friend say up, his reasoning being that with less cars taking gas, the oil companies are gonna raise the price to keep the profits the same

i figured it would make gas lower because the supply would go up

[Edited on April 9, 2006 at 3:14 PM. Reason : .]

4/9/2006 3:13:58 PM

because like the other differences between us, lonesnark, I don't try to capitalize on the problems of others.

4/9/2006 3:32:08 PM

What I want to know is, if gas prices are so high due mainly to corporate greed, then why doesn't a seperate oil company step in, to act as competition? I suppose the immediate argument would be "because the current oil companies are so big that they'll make sure to squish any competition," but that could only work for so long if people boycott the current oil providers/distributors and go to the new competition (presumably because they would willingly sell (much) cheaper gas).

^^I would figure that gas prices would go down also, but maybe your friend has a point. Unless someone can come up with a good explanation of why that would be wrong.

4/9/2006 3:44:35 PM

^^ This is why you are just a troll, but I figure you are good fodder for other readers of TSB.

I'm sure I've said this before on this board, but just in case:
If you believe firmly that oil is going to be scarce in the future, by not capitalising on that information you are harming society.

Two possible outcomes given a firm belief in future oil scarcity:
#1 you pool whatever resources you have available to purchase oil futures, maturing in the time you forsee scarcity. This act will bid up the expected future price of oil (more buyers drive up prices), which will in-turn bid up the present price of oil (people with oil storage available will meet your demand for oil futures by selling futures and meeting them by buying oil today and storing it). Higher oil prices today drive up the price of gasoline. People see this and buy more fuel efficient cars, switch to electric heating, invest in more efficient production processes, etc. One year later, you were right, oil is scarce, but thanks to your buying a year before you are now filthy rich and, at the same time, others are better off because they had a year to adjust their lives around more expensive oil. As a result, less oil is being used, so the price spike is smaller and shorter, dramatically reducing the human hardship generated.

#2 you do nothing. The futures market of oil remains low, so the present price remains low, gas prices are low and both people and businesses make long term plans expecting cheap oil. A year later, they were wrong and you were right, more people are stuck driving around in SUVs, businesses are still using oil when they should have switched to alternatives. As a result, the price spike is even higher and longer than it would have been under #1 above. Businesses, which must make long term plans and cannot adjust their whole production chain in less than a year, must instead close, laying off their workers.

So, who is being self-serving by doing nothing when you know something must be done?

Quote :

"i had a friend say up, his reasoning being that with less cars taking gas, the oil companies are gonna raise the price to keep the profits the same"

Well, since oil companies don't get to choose their profits, your friend must be wrong. If he was right, then I have no idea why the oil companies chose to slash oil prices to less than $10 a barrel back in 1998. I guess maybe they felt generous. What do you think?

[Edited on April 9, 2006 at 4:50 PM. Reason : .,.]

4/9/2006 4:43:22 PM

hahah yeah, i'm a troll

4/9/2006 4:47:42 PM

Quote :

"slash oil prices to less than $10 a barrel back in 1998"

what could be done to get something like this to happen again?

4/9/2006 4:53:58 PM

Projections for oil supplies and production capacity would have to be revised upwards (ie huge oil fields are discovered and big oil pledges to build more refineries) and projections for demand would have to go down (ie US turns back to nuclear power or China and India go into a major recession).


Simple supply and demand, dude.

4/9/2006 7:13:28 PM

we will never, ever, ever, ever run out of oil.

economics people, economics.

4/9/2006 10:55:19 PM

^and movement is an illusion

4/9/2006 11:13:43 PM

Quote :

" we will never, ever, ever, ever run out of oil. economics people, economics."

using economics i would say that if oil had an unlimited supply it would be sold for zero, since its not i can only assume it has a limited supply(feel free to debate how limited). nice try though.

4/10/2006 1:42:37 AM

what he means is that there will always be at least some oil in the earth somewhere, but it will not be worth it to get to it since cheaper alternatives will present themselves when the cost of oil soars due to the limited availability.

4/10/2006 3:11:36 AM

Quote :

"what he means is that there will always be at least some oil in the earth somewhere, but it will not be worth it to get to it since cheaper alternatives will present themselves when the cost of oil soars due to the limited availability."

i think everyone likely understands this. the issue isn't that we'll "run out" of oil, it's that it will become too expensive to get what we need before alternatives become widely available. of course we'll never burn the very very very last drum of oil. jesus.

4/10/2006 7:27:28 AM

Quote :

"what could be done to get something like this to happen again?"

I'm not so sure that it ever will. If you sold oil for $10/barrel and later found that everyone was willing to pay $70/barrel what would it take for you to lower the price back to $10/barrel?

4/10/2006 7:48:29 AM

i never said oil had an unlimited supply, i'm saying that when oil meets a certain point, we will start to substitute. when they make it worth our while (economically speaking), to switch to corn gas or whatever the hell they come up with, everyone will do it.

4/10/2006 8:33:30 AM

man i remember watching orielly and it was 2000

and he was interviewing some dude that said in 5 years fuel cells would be widely available and that they were cheap

well 2005 came and i still see no fuel cells in 2006

4/10/2006 8:46:13 AM

I'm glad oil prices have skyrocketed. It only adds to the fire for alternative fuel sources. A typical american, and we're all guilty of this, see's soemthing they need that doesn't cost much (gas in this instance) for somethign we can afford and not think too much of. We might bitch but it doesn't really hut our pocket book. ($20-$40 per month isn't that much). But when it starts hitting $60-$200 more per month we notice. This is what's happening. The common american is becoming concerned, not just environmentalists etc. Now the government is being pressured and HUGE new opportunities come about for technology.

Bio Diesel has come further in the past 5 years that before.

Hydrogen Fuel is being used in almost every major city in test cars, Raleigh included.

Mazda is releasing the first hydrogen fuel driven sports car (RX-8) (http://rotarynews.com/node/view/468)

Even the GubMent of GWB is providing funding. It's of course a profit venture but it's defended by stating that they no longer want to depend on foreign nations for fuel sources.

Sure in 40 years oil might be a scarce resource but USA won't be stuck with it. I think in 20 years, or less, we will have new fuel resources for our vehicles that will burn cleaner fuels. The problem is that current cars cannot be easily converted except to biodiesel and that's not an acceptable option for normal consumers.

Biodiesel stinks worse than diesel.

4/10/2006 8:59:05 AM

I hate this argument:

"I love the high prices. It forces people to start to look at alternatives. It makes the government look into developing new technologies and the high gas prices make potential new technologies more economical."

1) Meanwhile the middle class become the poor class.
2) You pretend like people can't research alternatives when the gas prices are low.
3) It costs about $0.10/mile to operate a vehicle right now. If the price has to go even higher to make any new energy source more attractive that would tell me that the new fuel would still clock in close to $0.10/mile. If it didn't people would still be using gas because it would be cheaper.

4/10/2006 9:13:03 AM

Quote :

"I'm not so sure that it ever will. If you sold oil for $10/barrel and later found that everyone was willing to pay $70/barrel what would it take for you to lower the price back to $10/barrel?"

Just a few years before it had been selling for $40 a barrel.

The fact is, you take what people will pay. If no one is willing to pay you more than $10, then that is all you get. Conversely, if no one is willing to sell it for less than $70, you pay that or walk away.

I don't know if the current price is really "way too high", as it obviously was during the 80s and early 90s. But if it is, then $10 oil (or the equivalent) may be no more than 10 years away.

4/10/2006 9:20:28 AM