October 21, 2006
DIG THAT LAST SENTENCE:
Geologist: Earth has lots and lots of oil (20 Oct 2006, UPI)
A University of Washington economic geologist says there is lots of crude oil left for human use.
Eric Cheney said Friday in a news release that changing economics, technological advances and efforts such as recycling and substitution make the world's mineral resources virtually infinite.
For instance, oil deposits unreachable 40 years ago can be tapped using improved technology, and oil once too costly to extract from tar sands, organic matter or coal is now worth manufacturing. Though some resources might be costlier now, they still are needed.
"The most common question I get is, 'When are we going to run out of oil?' The correct response is, 'Never,'" said Cheney. "It might be a heck of a lot more expensive than it is now, but there will always be some oil available at a price, perhaps $10 to $100 a gallon."
Cheney also said that gasoline prices today, adjusted for inflation, are about what they were in the early part of the last century. Current prices seem inordinately high, he said, because crude oil was at an extremely low price, $10 a barrel, eight years ago and now fetches around $58 a barrel.Nothing has happened in the last eight years to warrant a significant increase in the price of oil. The current price of $58 dollars a gallon, errr... BARREL is due entirely to speculation and irrational pessimism. Posted by Pepys at October 21, 2006 1:48 PM
$58 dollars a gallon? Heh.
Should oil be taken off the market?
Posted by: andrew at October 21, 2006 2:24 PMdue entirely to speculation and irrational pessimism.
ENTIRELY?
Sorry, no.
Throw in political turmoil in the Niger Delta and Iraq, the wreck in Venezuela because of Chavez's politicization of PDVSA (once a highly technocratic, capable organization), Mexico's steadfast refusal to liberalize its oil industry, and the rapid maturation of the North Sea, and right there you have quite a few reasons why the price of oil isn't simply based on irrational overreaction or speculation. There's some of that, yes, but there are also real price drivers at work that this post discounts too heavily.
Posted by: kevin whited at October 21, 2006 2:40 PMWell folks, if you'll look to the right of the boat, you'll see a fantastic example of the North American Irrational Pessimist. Notice him puffing up and spreading that magnificent plumage... They put on quite the show, don't they?
Posted by: Pepys at October 21, 2006 2:48 PM"there will always be some oil available at a price, perhaps $10 to $100 a gallon" That is what the Arabs want, but that will never happen. By that time, our houses will be warmed up by the sun. Our cars will be re-charged in our garages. It doesn't matter how much oil is still in the ground, if it is not cheap, we'll not use it.
Posted by: ic at October 21, 2006 2:50 PMEric Cheney? Good Lord, man, connect the dots! His middle name is probably "Halliburton"!
P.S. I question the timing.
Posted by: Annoying Old Guy at October 21, 2006 4:43 PMkevin:
actually, if it were liberalized there'd be a danger of shortages. As long as its the only way for all those unliberal regimes to fund their states we'll always have too much available.
Posted by: oj at October 21, 2006 5:03 PMThere was a logic to the price spike, as long as enough people A.) Saw the non-stop coverage of Hurricanes Katrina and Rita last year and their effect of Gulf oil exploration and costal refiniing and pipeline facilities, and B.) Believed all the tripe that this was caused by Global Warming, and that it was a trend that would only increase in the future, meaning that each subesquent hurricane season would be worse than the one that came before it.
Believing that oil had nowhere to go but into triple digit a barrel territory is like all those stock buyers and experts in the tech boom of the late 1990s who believed that the new economy has completely eliminated the boom/bust cycle, and the market would continue on a stright line up into five-digit Dow territory. If you buy the hype and believe the worst fears (usually with a Republican in the White House) or the more euphoric secnarioes (usually with a Democrat in the White House), you're going to get burned.
Posted by: John at October 22, 2006 4:02 PMYesterday I spent almost the whole day with Microsoft technical support techs in New Delhi. One of them with far less knowledge than I, after several hours (I ran the batteries on two phones) was chatting while we waited for yet another unnecessary and time wasting strategy, confided that New Delhi had become much colder due to Global Warming.
Thinking he may have confused the words, colder with warmer, I asked if he really meant colder and he was able to give the colder is warmer and vice versa explanation verbatim.
Perhaps Microsoft could get some techs who understand that computers don't run on Kool-Aid.