|Quoting 2175301 (Reply 3):|
None of the base economics have changed for the US or the $ Dollar.
Unemployment is going up, consumption is going down, ergo, demand is going down. If demand in the US is going down, demand for oil in India and China is going down.
REmember prices were historically very low in the Great Depression because nobody had any money to buy anything. Inflation was running very high before the sharp deep recession in the early 80s. I'll say one thing for depressions and recessions. They sure kill high commodity prices. Happens every time.
|Quoting GuitrThree (Reply 4):|
Russia needs high priced oil to finance its own government. If oil hits the $80 range watch out. If it hits the $60 range you can count on it. Something will be done by Russia, be it another Georgia type invasion or pipeline interruption, they will do all they can to inflate the price. Yet another reason we need to start drilling YESTERDAY.
yeah they will but if there is no demand there is no demand. Plus let us say we drill for all the oil we've got tomorrow. Which I am frankly not terribly opposed to. What do you think would happen to the price of oil? How is oil priced? How do the traders in New York and Dubai price their futures contracts? Just curious if the drill now people know how the oil business is actually run. What would happen initially is... NOT MUCH! because it would take a decade to have the oil on the market. Futures contracts are not ten years in the future. More like six months to one year. (I think there might be two-year contracts will have to look it up)
Ok then what happens. Well the oil is added to the GLOBAL market. It is impossible to segregate US from foreign oil unless you want a Soviet style command economy. Gulf and Shell and Exxon/Mobil are GLOBAL players. They'll sell that oil to China as easily as they'l sell to you and there isn't a damn thing anybody can do about it. SO whatever the price of oils is when that comes on line will go down by how much? Let's say 10%, although I doubt any change from normal fluctuations can be noticed. Well what will happen? Can anyone take a guess? Beuller? Beuller?
Consumption will rise
, people who conserved might not as much. People who looked to shale oil or oil that is hard to extract won't bother. So consumption rises, demand rises, and hen what happens, well oil goes back to where it was.
To wit. The "Drill now" as a solution thesis suffers from at least three flaws.
1) Oil ain't coming for a decade
2) You can't separate out different country's oil
3) Lowering price will increase demand.
You'd think, because a lot of the drill now people are conservatives, they might want to read a book on basic economics. You know crakc open some Milton Freidman, Friedrich von Hayek.
|Quoting GuitrThree (Reply 6):|
We have reserves that will last for years and years. Why do you insist on being held hostage to every country that hates us?
Where are these reserves? We have reserves, but the comment makes it sound like we're a North American Saudi Arabia. We have reserves, but we don't have bounteous reserves for years and years. Much of the reserves we have are suspected and not proven.
We are held hostage by foreign oil because we consume a lot and they are too willing to sell to us. Exploiting the MAXIMUM of our domestic oil will be a mere blip. The equivalent of ordering super-sized big mac and super-sized fries -- and a Diet Coke.
this is also not factoring in the differences in oil quality, difficulties in getting to the oil, costs to refine the oil. Saudi and Iraqi oil is much easier to refine than Mexican or Venezuelan oil. The Oil Sands of Alberta is exceedingly difficult, polluting and energy intensive, and the break even point is where oil is as high as it is here.
Much of Mexico and the Gulf of Mexico as well as Venezuela suffer from salt and water intrusion which contaminates the oil and makes it harder to refine. An oil well is considered tapped out when, by some estimates, there is still 50% of the original oil left. It is just too diffuse in the rock or contaminated by oil. Fact of life. Better technology will get more of it, especially if prices rise, the extra costs will be worth it, but nobody is going to get 100%.
Believe it or not there is oil in PA and New York, the origin of the global petroleum industry (They don't call it Penn-zoil) for nothing, but the easy oil has been extracted long ago. Any oil left would cost far more than what you would get. I would assume if oil got high enough you can begin to try to recover that oil.
Went to school to be a Geologist, and while not practicing, (and not majoring in petroleum geology, but rather coastal geology) I frankly know a lot about this subject for a layperson. I am sure a lot knwo more than me but frankly most of the people in this thread - don't.
Now class, in addition to Friedman and Hayek, I want you to read The Prize, by Daniel yergin, and Guide to Petroleum Geology, Exploration, Drilling and Production
by Hyne and Hyne.
Also Elements of Petroleum Geology
and Petroleum Geoscience
Plus you need to know some stratigraphy and structural geology so you might want to get,
Principles of Stratigraphy
(really the best intro to Strat text)
Now anybody want to know how barrier islands form or what an orogeny is? How about why Long Island beaches are blood-red after a nor'easter? Come ON
I may be ugly. I may be an American. But don't call me an ugly American.