Lufthansa
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Oil Is Going To Skyrocket

Wed Apr 12, 2006 2:27 pm

We'll folks,

It seems that the President of the Islamic Republic of Iran is dead set on developing a nuclear bomb.

They have just announced that they have successfully enriched Uranium, and that they are determined to work on the heavy water plant, which could potentially be used to produced plutonium.

So what does this mean for aviation? Simple, Oil prices are going to sky rocket as futures and options traders panic due to the simple fact that Iran is the world's 4th largest producer of oil, and any disruption to supply is going to have a major impact on the face of the planet.

Just yesterday, we heard Qantas claim that it was planning more reforms yet and we'd hear about them over the next few months, and the driving forces for this was largely higher oil prices. And now this... seems like it is even higher than people expected. So, this is going to have a global impact on all major airlines, and yet another shock to the system is definately going to lead to a reduced demand.

Cathay pacific earlier stated this year that it was rapidly running out of options to combat this problem, because if it raised prices any higher, it would significantly impact on its long haul demand. We all know the situation at the US majors all too well (maybe one of them will fall? maybe more than 1?) and it seems that some fundimental changes are going to have to be made, yet again!

So folks, what do you see happening? It looks almost certain that Iran will continue its program, and even if this doesn't result in a war, the threat of military action (and the potential threat iran poses) will almost certainly force the west to do something. War or no war, the threat posed to supply will drive oil prices higher.

So what can be done?
- fewer frequencies with larger aircraft (think 1 747 flight instead of 2 767 flights)
- eliminate RJ's with fewer frequency mainline jets
- replace A320 and 737 flights with fewer 767 and A330 flights
- the introduction of A380 services this year will help on some routes.

... this will help ease the price pressure due to the lower CASM of larger aircraft but the problem may see oil go to levels we have never yet experienced. Meaning that the CASM, even on the larger most efficient options like the 773, 744 and soon to be A380 are still going to have to be priced at a level that will cause significant reductions in demand.

So lets speculate? Forced mergers (im thinking SIA-QF, one single LH group, possible consolidation of DL/NW/AF/KL long haul etc? ) Because if you think last year was turbulent, think again, this year may be worse. So folks, what do u all think?

[Edited 2006-04-12 07:43:21]
 
FlightShadow
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 2:36 pm

Quoting Lufthansa (Thread starter):
So folks, what do u all think?

I know it's kinda bland...but when reading this, the only thing that pops into my head is "we're all screwed"

However, I remember reading a few months back that some guy had potentially found a huge oil supply in the Colorado/Utah (do they call it the "great basin"? trying to remember 4th grade...) area that would supply oil for many years to come. Haven't heard anything further about this though...which is kinda troubling  boggled 
"When the tide goes out, you can tell who was skinnydipping."
 
LH492
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 2:53 pm

Maybe it is time to develop a new engine which uses for example hydrogen as fuel.
A few weeks back, I read an interview about this issue and there, some experts were asked about that very topic and they said that ther won´t be a new kind of engine within the next 15 years due to high developement costs.
If we don´t have 15 more years then maybe they should develope the new engine regardless the costs. I think if oil prises keep climbing the way they do now, a new developement won´t be much more expensive for the industrie than flying around with this extremely expensive stuff called oil.
But the main problem IMO is that new developements in aviation need a lot of time and therefore many airlines will get into serious trouble before something new will be available.
I hope this matter gets more attention in the future and maybe their is a sollution for this.

Cheers,
Philipp
Carpe Diem, Seize The Day
 
seanp11
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 2:54 pm

Quoting LH492 (Reply 2):
Maybe it is time to develop a new engine which uses for example hydrogen as fuel.

But where are we going to get the energy to make the hydrogen? This problem stems deeper than it looks.
 
LH492
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 3:09 pm

Quoting Seanp11 (Reply 3):
But where are we going to get the energy to make the hydrogen? This problem stems deeper than it looks.

Yes, I am aware of that, I used this as an example but I know that there are many problems linked to that.
It is very tough to find an alternative fuel for airplanes but in the end we will be forced to find a sollution otherwise aviation will face a terrible time.
BTW Seanp11, I know that my reply sounds a little harsh but it is not meant that way, I just don´t know how to express my self a different way  Big grin

cheers,
Philipp
Carpe Diem, Seize The Day
 
ANother
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 4:12 pm

Quoting Lufthansa (Thread starter):
So lets speculate? Forced mergers (im thinking SIA-QF, one single LH group, possible consolidation of DL/NW/AF/KL long haul etc? ) Because if you think last year was turbulent, think again, this year may be worse. So folks, what do u all think?

IMHO my greatgrandchildren won't see a change to the archaic ownership and control rules which govern our industry. Sad , but true.
 
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lindy field
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 4:29 pm

I think the outlook is particularly grim for airlines in the United States. The last five years have been absolutely terrible for the legacy carriers in the US, even though the economy has been growing and load factors have been quite good. What happens when the economy slows down and passenger numbers decrease? I suspect that a deep recession is coming in the US. The housing market is cooling off, interest rates are rising, energy prices are going up - this will ultimately have an impact on consumer spending. An oil shock will just hasten the inevitable. When this happens, passenger numbers will decrease and I suspect that the some of the US legacy carriers, already weakened, will go belly-up.
 
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Zkpilot
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 4:52 pm

I'm just curious and will pose this question to anyone who might care to answer if it is even viable... Years ago people used to travel in Airships and that all but stopped with the Hindenburg tragedy... Ok so that was hydrogen. Now blimps etc use helium which is much safer...
What are the lifting properties of helium? Would it be viable to design aircraft (or modify aircraft) to have empty voids (ie in the roof of B747, A380, B777 etc and other unused areas in the holds etc) filled with helium? Would this not allow the aircraft to a) use less power and fuel on takeoff, b) use less power maintaining altitude during the cruise as its lift is supplemented by the helium without any extra drag.? Eg on a 747 with unused spaces filled with helium, if that could provide 30,000kg (66,000lbs) of lift, would that not over say a 12 hour flight save approx 20-40,000kg of fuel (less fuel needed to carry fuel, less fuel needed for lift, less drag, better payload) ?
It would be safe, completely reusable (would be permanently in the a/c), and I don't think it would cost much to implement...
just wondering what everyone else thinks and how viable would it be?  Smile
56 types. 38 countries. 24 airlines.
 
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sebolino
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:36 pm

Quoting Seanp11 (Reply 3):
But where are we going to get the energy to make the hydrogen? This problem stems deeper than it looks.

All the energy available on earth comes from the sun, from a way or another, except nuclear, which comes from earlier times.

So instead of using oil, made out of animals and vegetables grown with solar energy, we will just use 1) nuclear power for countries which allow it 2) Solar energy in other forms (i.e. wind, photoelectric power, vegetable oil).

Edit: I forgot Tidal energy which comes partly from the moon, and possibly other sources ...

[Edited 2006-04-12 11:40:16]
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:44 pm

Quoting Seanp11 (Reply 3):
But where are we going to get the energy to make the hydrogen? This problem stems deeper than it looks.

Hydrogen power is 50 years off, or more. I'm always amazed by how many people think hydrogen is going to replace fossil fuels. The technology just ain't there, and never will be.

Quoting ANother (Reply 5):
IMHO my greatgrandchildren won't see a change to the archaic ownership and control rules which govern our industry. Sad , but true.

Your grandchildren will never fly, babes. Never mind ownership rules, planes will only be useful post-oil as places to live in.

Quoting Sebolino (Reply 8):
we will just use 1) nuclear power for countries which allow it 2) Solar energy in other forms (i.e. wind, photoelectric power, vegetable oil).

Absolutely wrong. How are you going to get nuclear material out of the ground in Australia and ship it to France without lots of fossil fuel? See also: You can't make a wind turbine using wind power.
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dispatchguy
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:46 pm

Quoting FlightShadow (Reply 1):
However, I remember reading a few months back that some guy had potentially found a huge oil supply in the Colorado/Utah (do they call it the "great basin"? trying to remember 4th grade...) area that would supply oil for many years to come. Haven't heard anything further about this though...which is kinda troubling

I hadnt heard that; which doesnt mean anything in an of itself; however, I would be willing to bet that it'll be 20+ years before they are able to extract the first "production" drop of oil due to the environmentalist groups will come to the defense of some banana slug, or something like it.

Look at ANWAR...
Nobody screws you better than an airline job!
 
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sebolino
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:48 pm

Quoting Cedarjet (Reply 9):
Absolutely wrong. How are you going to get nuclear material out of the ground in Australia and ship it to France without lots of fossil fuel? See also: You can't make a wind turbine using wind power.

I don't get your point.
What is "absolutely wrong" ?

Nuclear power is used, wind power is used, photoelectric power is used, bio-fuel is already used.

You can't make a wind turbine using wind power

This sentence is a real mistery ...
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:57 pm

What I'm saying is, all the much-vaunted "alternatives" are entirely reliant upon fossil fuels (I already explained how this applies to nuclear power - mining and transporting nuclear fuel can't be achieved unless you have access to cheap oil). I think "You can't make a wind turbine using wind power" is entirely self-explanatory - to mine the metal, turn it into a set of giant blades, transport them hundreds or thousands of miles, stick them in the ground, all takes tonnes of energy, the likes of which cannot be generated by wind power. Therefore, while a wind turbine will generate some electricity after it is in situ, it takes something of a higher order of magnitude to build and install it in the first place, ie, oil.

[Edited 2006-04-12 11:59:35]
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ARGinLON
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:58 pm

Quoting Lufthansa (Thread starter):
It seems that the President of the Islamic Republic of Iran is dead set on developing a nuclear bomb.

A bomb???? He never said that!! I watched BBC news last night and they never mentioned that... What do you watch? FOX news?  Smile
 
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ClassicLover
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 6:59 pm

Quoting Cedarjet (Reply 9):
Hydrogen power is 50 years off, or more. I'm always amazed by how many people think hydrogen is going to replace fossil fuels. The technology just ain't there, and never will be.

50 years off or more / then you say never will be. Which is it?

Quoting Cedarjet (Reply 9):
Your grandchildren will never fly, babes. Never mind ownership rules, planes will only be useful post-oil as places to live in.

I am sure you were one of those in times before flight who said man will never fly  Smile

You presume that the human race won't adapt like it always has in the past. Interesting.

Quoting Cedarjet (Reply 9):
Absolutely wrong. How are you going to get nuclear material out of the ground in Australia and ship it to France without lots of fossil fuel? See also: You can't make a wind turbine using wind power.

Well shipping it to France is easy, you stick it into a sailing boat.  Smile ...
I do quite enjoy a spot of flying - more so when it's not in Economy!
 
art
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 7:13 pm

Quoting Lufthansa (Thread starter):
So what can be done?
- fewer frequencies with larger aircraft (think 1 747 flight instead of 2 767 flights)
- eliminate RJ's with fewer frequency mainline jets
- replace A320 and 737 flights with fewer 767 and A330 flights
- the introduction of A380 services this year will help on some routes

Sensible solution: use more fuel efficient aircraft (usually larger aircraft at a lower frequency). The current US domestic model seems to show that high frequency + high fuel prices = high losses

Quoting LH492 (Reply 2):
Maybe it is time to develop a new engine which uses for example hydrogen as fuel.

I think the interim solution is to re-work the way we produce energy and to use existing hydrocarbons more appropriately. For example, the calorific content/weight characteristics of fuel are not critical to generating electricity. It does not matter so much if you have to move 2x tons of fuel from A to B to generate electricity (eg coal) instead of x tons of fuel with a higher calorific value (eg crude oil based fuel) whereas the weight of fuel needed to get an aircraft from A to B is critical.

On that tack, I don't think it is so clever to encourage oil producing countries to burn oil to produce electricity. I include Iran.

[Edited 2006-04-12 12:16:51]
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 7:20 pm

Quoting ClassicLover (Reply 14):
50 years off or more / then you say never will be. Which is it?

I personally think never. There's no way it'll be a substitute for oil, it won't arrive in time (ie in the next decade). If we had started getting ready for a post-oil world after the 73 oil shocks then we would be in much better shape. But for Reagan it was morning in America again, and off we went, burning our way through the non-renewable resource that sustains all of us in every way you can think of. People say Clinton will be remembered well, and for a while I believed it, but now I realise how badly he missed the last chance we had for a sustainable life for all of us. Now we are out of time, and W and his oil cronies will keep it thus.

Quoting ClassicLover (Reply 14):
I am sure you were one of those in times before flight who said man will never fly. You presume that the human race won't adapt like it always has in the past. Interesting.

Hey come on, man knew how to fly for centuries, we just didn't have the propulsion. The same applies to the future as it does to the past - without jet fuel, a 787 is just a big paperweight. I'm not saying we'll forget the technology, and of course people will be able to go hang-gliding (in between farming 18 hours a day) etc, and maybe there will be a few ethanol-powered planes. People just have no idea how much bang for buck oil gives us, and how there really isn't anything else available to us that is in the same ballpark (also, oil just comes straight out of the ground, you don't have to grow crops or refridgerate it to -200 deg C like ethanol or hydrogen). Right now, in a cheap-oil world, it's like we all have hundreds of slaves working for us, for free. At our present rate of consumption, all the oil in the world will be gone by 2037. However demand is rising fast so actually the end would come sooner, but for the fact that most of what's left isn't that easy to get so the cost of extraction and refinery will be much higher than what we've used so far.

Let me put it this way: the use of oil by humans, when charted on a graph, looks like the Washington Monument. Scary though our immediate future is, I guarantee you will search the web in vain for anything that contradicts my bleak forecast. We really are in a lot of trouble, and it's like an open secret that is freely available to anyone who wants to know.

(And forget the Canadian oil sands! It isn't even oil! It might keep the US military on it's feet for an extra couple of years but if you think some bitumen thousands of feet under the Canadian wilderness is going to make it possible for us all to drive cars and get food delivered from other continents to our local supermarkets, you will wait in vain.)
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Joni
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 7:59 pm

Could permanently high oil prices undercut the growth pattern that's existed in air travel over the past decades? Remember how air travel was been predicted to double over the next few decades, which was supposed to create demand for all those A380s, sonic cruisers and B787s.

Personally I'm one of the people who think that a nuclear-armed (or, capable of building nuclear weapons) Iran might be a good thing, or at least not such a disaster people think.

Think of it, if you were Iran and you were surrounded by

1) a nuclear-armed pakistan
2) a nuclear-armed Israel that is very hostile toward you
3) US ground troops in 2 neighbouring countries (Afganistan and Iraq) with an unpredictable and hostile regime in Washington.

what would you feel like, security-wise? Add to the mix that your country is one of the richest in the world, then it somehow feels obvious that they would (and should) explore their options. If then had either a nuclear deterrent or an ability to produce one if need arose, it could increase stability in the region as they wouldn't feel so threatened.

N.B. a similar effect could also be gained if Israel verifiably were to dismantle its own arsenal.

If Iran felt secure, there would be no risk of a new Gulf War and oil could flow freely. However you can't help but get the feeling that there are clouds gathering in the horizon for air travel, since not only is oil demand going to be high in the future as production will begin to decline, but also environmental factors will limit how much can be burned at all.
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 8:07 pm

Quoting Joni (Reply 17):
If Iran felt secure, there would be no risk of a new Gulf War and oil could flow freely.

Iran's security is not the issue. While I'm sure the US and the West's hyprocritical one-rule-for-Israel-and-another-rule-for-everyone-else undermines security and stability everywhere, and if I was Iran I would be scrambling as fast as I could to get my hands on The Bomb (as you say, a hostile and heavily nuked-up Israel, US forces on both sides ie Iraq and Afganistan), the real problem is that we are running out of oil.

(As funk heroes Tower Of Power told us back in the 70s, on their track There's Only So Much Oil In The Ground: "I can't cut loose / Without that juice.")
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ANother
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:02 pm

Quoting Cedarjet (Reply 18):
Iran's security is not the issue.

No? I would have thought that was key. As long as the so-called 'nuclear powers' hang onto their weapons, others will want to join the club. As I pointed out in another thread - America does not attack countries that have nuclear weapons. If Iran has them they think they are secure.
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:18 pm

Quoting ANother (Reply 19):
As long as the so-called 'nuclear powers' hang onto their weapons, others will want to join the club. As I pointed out in another thread - America does not attack countries that have nuclear weapons. If Iran has them they think they are secure.

Of course you're right, Iran's security is important and that's why they want The Bomb. But in terms of oil prices, Iran's security isn't an issue, the issue is how little oil is left. Iran can blow up Israel or instead convert to free market capitalist democracy, or any shade inbetween, but it won't change the fact that we'll be all out of oil in about 30 years, and the price of the stuff will have risen long before then to the level that will kill aviation, private motoring, any business with a supply chain of more than a few miles, maybe even the whole concept of the nation-state (which didn't exist before oil after all). No more oil, no more America, no more Iran, no more Israel, etc.
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cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:19 pm

No more Bomb either, by the way.
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sebolino
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:26 pm

Quoting Cedarjet (Reply 12):
Therefore, while a wind turbine will generate some electricity after it is in situ, it takes something of a higher order of magnitude to build and install it in the first place, ie, oil.

Sorry, but all your theory is flawed.
Basically, you're saying that it's impossible to produce energy without the help of oil. And you're saying then that it was impossible to dig the first derrick to have oil, and then we have no oil.

Magnificient demonstration !!!


Seriously, you're wrong.

We can use electric engines or alcohol engines instead of gasoline engines, saying the opposite denotes a bias in favour of oil. And then the system is auto-feeded with "green" electricity + bio-gas.
In Brasil, agricultural planes fly with alcohol already.
 
yak42
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:37 pm

Even without the impetus of rocketing oil prices, the US is primed for massive recession. Economists are predicting that the Bush governments economic planning is inept and totally unsustainable. The massive budget deficit and huge consumer debt through mortgages and other initially cheap credit becoming more expensive to service will become unsustainable within the near future as China and Japan will become more reluctant to keep lending and interest rate hikes will cause widespread defaults. A US economic implosion will cause recession for all its major trading partners and beyond, thus the demand for oil will fall significantly making it less of an issue for the near future.
 
lehpron
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:41 pm

Geothermal to produce electricity for free apart from operating and maintainability costs. Use the electricity to perform a hydrolysis on a large lake river or ocean front to produce hydrogen gas. Go from there. But there is an infrastructural issue, which means loads of R&D, which may take decades to establish an equilibrium with the demands of the world - we better start now.

At least this way we don't use fossil fuel, nuclear, solar, or wind energy. I don't know too much about tidal energy to comment.
The meaning of life is curiosity; we were put on this planet to explore opportunities.
 
Lumberton
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 9:57 pm

This is a good thread on which to plug Dr. Alex Kuhlman's article on "Peak Oil", right here on a.net. Here's the link.
http://www.airliners.net/articles/read.main?id=81

IMO, a fair and spot on analysis, if rather grim.  Sad
"When all is said and done, more will be said than done".
 
Stealthz
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 10:30 pm

Quoting LH492 (Reply 2):
Maybe it is time to develop a new engine which uses for example hydrogen as fuel.

That part is a no brainer, a modern gas turbine engine can run on almost anything flammable that can be injected into the combustion chamber.. ranging frm Hydrogen to powdered coal! Ok, some modifications may be required because they are not optimised for such a range but the engines are not the problem.
1/ Where do you get the Hydrogen, it does not exist in a free state anywhere within 93million miles of the nearest fuel depot.
2/ It is a remarkably inefficient fuel, an A380 would be able to transport 100, perhaps 200 people a couple of thousand miles because most of the A/C volume would be fuel tank....interesting concept, the Southwest of the latter 21st century have replaced their workhorse B737-3G with A380-H so they can continue to fly between IAH-DFW & LAX-LAS etc in an attempt to compete with the new Amtrak MagLevs(Ambient temp superconductors makng long distance MagLev trains practical)

Quoting Zkpilot (Reply 7):
What are the lifting properties of helium? Would it be viable to design aircraft (or modify aircraft) to have empty voids (ie in the roof of B747, A380, B777 etc and other unused areas in the holds etc) filled with helium?

Not even worth considering.. the lifting power of Helium.. would hardly affect the weight & balance calcs of a conventional airliner let alone contribute much to it's operating economics.
Perhaps we could convert the airliner system to a somewhat slower and more stately helium based airship concept... nuh!! Where do you get the Helium? it is a trace element in the atmosphere but extremely difficult to extract in useful quantities, there are small natural deposits found only, I believe in (uh oh!!) the USA but it is still not plentiful enough to take over the "lifting" duties of the worlds air transport
If your camera sends text messages, that could explain why your photos are rubbish!
 
bmacleod
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 10:32 pm

Quoting Lufthansa (Thread starter):
It seems that the President of the Islamic Republic of Iran is dead set on developing a nuclear bomb.

Surprising being European you would share the Bush Administration's view on this. Are you really from Switzerland?

Quoting Lufthansa (Thread starter):
- eliminate RJ's with fewer frequency mainline jets
- replace A320 and 737 flights with fewer 767 and A330 flights

So bigger is better is that it?  confused 

Why have carriers such as UA, AC, DL and NW switched to smaller jets on many short-haul and transborder routes?
"What good are wings without the courage to fly?" - Atticus
 
cedarjet
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 10:35 pm

Quoting Bmacleod (Reply 27):
Why have carriers such as UA, AC, DL and NW switched to smaller jets on many short-haul and transborder routes?

Probably fleet decisions made without factoring in the future cost of oil. There's no way a pair of MD80s is more efficient than a single 767. Ditto an A380 instead of a pair of A330s. So yes, bigger is better.
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Joni
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 10:38 pm

Iran's security isn't a factor in the basic question of are we going to run out of oil, but it can be a factor in is oil going to cost USD50 per barrel or USD100 per barrel over the next decade.

Incidentally, Venezuela apparently has gigantic reserves (more than Saudi Arabia) of very heavy oil, which is profitable to extract only if prices are above USD30-40 per barrel - so prices are unlikely to remain at USD100/bl for many decades. Also Canada has large deposits of tar sands that could be processed into oil, and coal can also be transformed into oil if the price is USD50 or so. Another point is, however, that we can't burn all those reserves without destroying the climate entirely.

The EU is mandating that around 5% of transportation fossil fuels will have to be replaced with biofuels within the next few years. Bio-diesel could also be burned in jet engines, making mineral oils a moot point in the long run. (biofuels capture from the atmosphere as much CO2 as they release into it when burned, so they're "carbon-neutral" and effectovely liquid solar power.).
 
Tan Flyr
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RE: Oil Is Going To Skyrocket

Wed Apr 12, 2006 11:06 pm

Quoting Yak42 (Reply 23):
Even without the impetus of rocketing oil prices, the US is primed for massive recession. Economists are predicting that the Bush governments economic planning is inept and totally unsustainable. The massive budget deficit and huge consumer debt through mortgages and other initially cheap credit becoming more expensive to service will become unsustainable within the near future as China and Japan will become more reluctant to keep lending and interest rate hikes will cause widespread defaults. A US economic implosion will cause recession for all its major trading partners and beyond, thus the demand for oil will fall significantly making it less of an issue for the near future.

I do not agree with your guess of the American economy.

While you do make some points about consumer debt, etc., I doubt we are headed to a "massive recession". I would subscribe we are due for a market correction but the US economy is much more resiliant than most realize.Your last point about demand and price is correct though.

Some replys back one of you noted about oil "in the Great Basin"..you are refering to "Oil Shales". Oil impregnated in rock. Sorta like the the tar sands in Canada. The sands/ rock or whatever have to be processed to get the crude/ tar out and prepared for transport to refineries. Hundreds af years worth of petroleum are locked up in these deposits.

What we face is more of a political crisis and and the results of it. There are so many aspects, but political unrest in Nigeria, the situation in the Middle East, and the agenda of Hugo Chavez are contributing to a "premium" put on the price of oil by traders.Until those are solved the "premium" will stay in the market.

Add that to the lack of resolve by our own politicos to use what we have in North America as well as a lack of refining capacity..and you have the mess we are in.

An economic slowdown will occur, and the natural result of that will be a decline in demand for oil products..thus the price will drop. Simple economics in the short term. But a better policy to use the available sources in North America would help significantly. Until that backbone appears, and those policies take place the oil/ transportation and all other business are in for a tough time.

Just my 2 cents this morning!
 
Mason
Posts: 636
Joined: Sat Jun 12, 1999 12:01 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 1:21 am

The oil in Colorado and Utah is called shale oil, and is very expensive to purify and refine. At least at this point, the cost of processing it would exceed the market value of the product. In other words, the technology doesn't exist to turn this into a profit. That said, it is an issue, and different oil compaines are working on developing a solution.
 
seanp11
Posts: 281
Joined: Tue Jan 10, 2006 6:16 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 1:24 am

Quoting Mason (Reply 31):
The oil in Colorado and Utah is called shale oil, and is very expensive to purify and refine. At least at this point, the cost of processing it would exceed the market value of the product. In other words, the technology doesn't exist to turn this into a profit. That said, it is an issue, and different oil compaines are working on developing a solution.

The best way one can look at oil shales/sands is that it is the biological matter that makes oil, but hasn't cooked long enough beneath the earth's surface to become oil. The only way we can make it into oil is by putting more energy into it, which currently mostly comes from other fossil fuels (oil/natural gas/coal), so its not helping much.
 
nycflyer
Posts: 1288
Joined: Fri Jan 14, 2005 1:23 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 1:28 am

what about sugar-based ethanol, which the Brazilians have successfully mixed into their gasoline? can anything similar be done for jet fuel? there must be some alternative to oil that can be incorporated, but I am no engineer so I have no idea
 
Crosscountry
Posts: 123
Joined: Sat Nov 12, 2005 8:04 pm

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 1:32 am

I think we're all getting a bit to worried about this Iran stuff
Its being stoked up by a media desperate to inspire panic to build ratings (see bird flu in the UK) and a neo-conservative regime in the US hell bent on propping up its failing domestic policy by rattling sabers in foreign lands.
If you want anyone to blame for rising oil prices blame George Bush, China, or US consumers, who really should start driving smaller cars!!!
 
seanp11
Posts: 281
Joined: Tue Jan 10, 2006 6:16 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 1:40 am

Quoting NYCFlyer (Reply 33):
what about sugar-based ethanol, which the Brazilians have successfully mixed into their gasoline? can anything similar be done for jet fuel? there must be some alternative to oil that can be incorporated, but I am no engineer so I have no idea

I believe they are working on biofuels for jets. I think one of the biggest problems they are having is making them gel at the same temps as jet-a, because something like biodiesel will gel at much higher temperatures than jet-a, and when you're in -70 degrees F conditions, a fuel that gels at 40 degrees F is not much use.
 
F9Animal
Posts: 3652
Joined: Thu Dec 16, 2004 7:13 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:05 am

And the war continues. Guess we will see Iran as the next "Evil doers".

This world is seriously F*c*ed!
I Am A Different Animal!!
 
N730AS
Posts: 121
Joined: Mon Apr 05, 2004 5:17 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:27 am

As someone mentioned earlier, exploration in ANWR (Alaska National Wildlife Refuge) may bring us a good supply of oil for some time (some estimate that there could be a continuous supply of oil coming out of the ground for up to 30 years).

As an Alaskan think that we should be able to explore and drill up there...I for one would welcome lowered gas prices!
N730AS (s/n 22577) 737-290C Registered Jun-29-1981
 
Lumberton
Posts: 4176
Joined: Fri Jul 29, 2005 7:34 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:27 am

I referenced Dr. Kuhlman's article in Reply #25. Here is a quote from the article on the worst case scenario.

Quote:
Long Term:
In a worst-case scenario, the long-term future for aviation is disastrous. As oil prices continue to rise, the world economy will be confronted with a major shock that will stunt economic growth and increase inflation. The chief economist of Morgan Stanley recently predicted that we have a 90 percent chance of facing “economic Armageddon.” During the transition period to a post oil era, there may be massive disruptions to transportation as the global decline of oil deepens. There will be social unrest and a strong reduction of business and government activity and very serious unemployment. Eventually, a large proportion of the demand for air travel will be almost completely destroyed, with the risk of the aviation adventure going out of business, with the exception of perhaps a handful of airlines. Once again, air travel will be reserved for the rich and for government business and the world will become a larger place again.

What to do?
"When all is said and done, more will be said than done".
 
galapagapop
Posts: 861
Joined: Sat Feb 26, 2005 2:15 pm

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:42 am

Problem is the solution(s) are out there but try convincing the economies of the world of that. Not to mention the US. The US economy still benefits greatly from extremly lower fuel costs than the countries in Europe and even their brother Cananda, but yet people in the US are screaming bloody murder at Bush and his administration over oil costs and such (I hate the guy too, but not for anything like this), when the problem is them. If the economy weren't able to pay those kinds of costs SUV's would be gone and consuption would plummet and as a surplus builds the price comes down later on in an almost rollercoaster fashion. But purposely trying to make a huge case of lowering fuel costs for the simple reason "I used to pay less" is what will kill us in the end when oil runs out. Times have changed people with all their new gizmos and toys have seemed to of forgotten the 70's, fact is fuel will go up with consumption and smaller supplies. And now with the new lifestyles especially in the US with the popularity and use of SUV's in places like Southern California where 4x4 wheels have no advantage what-so-ever over a normal car. Although SUV use is everywhere as well, but tell me what the percentage of those SUV's will ever face conditions warranting their size and ability over just some careful driving and dare I say it, planning? What like 1% of all SUV's? Instead Americans imparticular prefer to be able to drive around at 70MPH in snow and rain while on their cell phone becuase remember according to them they are never "at fault". Hopefully these skyrocketing prices will fix a few feeding issues in the industry such as allowing for airlines to become as the Economist recently described "Zombie Companies" just being proped up and in the process lowering prices for all and just diluting the market with debt and losses. Hopefully someone will go down so capacity can drop and overall frequency consolidation can take place.
 
Oroka
Posts: 1077
Joined: Sat Dec 09, 2006 4:37 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:43 am

Time for an alternitive fuel source to keep those SUVs and big trucks running. Cause you know, those housewifes, and guys who work in an office need thier Ford F350s and H2s.

I love my little 3 cylinder that has been getting me about 50mpg for 15 years now, and my bike that burns only fat from my waist line.


Some types of transport need to use some sort of portable fuel, IE airplanes. The best way to keep prices of gas low is to use it less. Cars can run on alternitive fuels, railroads can be converted to electric systems.


Alot of people think the war in Iraq is about oil. So how many billions have been spent to control oil in another country? Right now it is estimated at about $270 BILLION! Now, how long would it take to develop an efficent alternative fuel if they put $1 Billion of that money into alternative fuel/engine development?
 
flydreamliner
Posts: 1928
Joined: Sat Jan 07, 2006 7:05 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:45 am

Quoting LH492 (Reply 2):
Maybe it is time to develop a new engine which uses for example hydrogen as fuel.

Good luck with that one...right now it takes more fossil fuel energy to create hydrogen fuel than burning it produces. That and hydrogen is beyond volatile.

Oil will get more expensive. We'll turn to alternatives. In the US, oil fired power generation is basically done, we've 250-300 years of coal, and we're burning it. That was helpful. Brazil is hugely reliant on their sugar produced ethanol fuel. The world isn't out of oil. Oil will stay expensive, and the big reason there is increased demand out of China. Here in north america, we're hard at work harnessing the oil sands. A little known fact is that nearly half of all the oil on Earth is held in the Alberta Canada and Colorado, US Oil sands and tar shales. Production from these newly exploited oil sources ramping up quickly, and will increase by factor of 5 in the next 10 years.

The other solution is natural fuels, alcohols made from plants, like corn, sugarbeat/sugarcane and grasses (Here in Minnesota, we make A TON of ethanol fuel, which cars can burn out of grasses and corn) Biodiesel is another good solution out there.

We can come up with new fuels for aircraft to burn. Human beings above all else are ingenuitive. When problems come up, we find solutions. The harder the problems, the better we are at getting solutions.

PS - Nuclear? Did you know we're closer to being out of our commercially viable Uranium ore than we are oil?
"Let the world change you, and you can change the world"
 
bmacleod
Posts: 2537
Joined: Sat Aug 25, 2001 3:10 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:45 am

Quoting Lumberton (Reply 38):
Once again, air travel will be reserved for the rich and for government business and the world will become a larger place again.

The Internet, new communication technology and other current inventions have prevented our world from becoming "large" again.
"What good are wings without the courage to fly?" - Atticus
 
Lumberton
Posts: 4176
Joined: Fri Jul 29, 2005 7:34 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 3:52 am

Quoting Bmacleod (Reply 42):

Remember, I'm quoting from an article written by someone else, so he should receive due credit for his ideas.

Dr. Kuhlman notes that any solution must be grounded in science. Hydrogen and bio-fuels aren't even close to solving the problem yet. It really is an excellent article and provides much food for thought.
"When all is said and done, more will be said than done".
 
N730AS
Posts: 121
Joined: Mon Apr 05, 2004 5:17 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:04 am

Look at the trend in Germany, everone drives a VW TDI...

I sure hope that this oil crisis does not spell the end of aviation as we know it today. It sure is nice to cross America is 5 hours...
N730AS (s/n 22577) 737-290C Registered Jun-29-1981
 
galapagapop
Posts: 861
Joined: Sat Feb 26, 2005 2:15 pm

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:08 am

Quoting N730AS (Reply 44):
Look at the trend in Germany, everone drives a VW TDI...

What I wouldn't do to get one of those, love diesel cars, always have.
 
Sydscott
Posts: 3081
Joined: Thu Oct 30, 2003 11:50 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:26 am

Quoting FlyDreamliner (Reply 41):
We can come up with new fuels for aircraft to burn. Human beings above all else are ingenuitive. When problems come up, we find solutions. The harder the problems, the better we are at getting solutions.

Humbug!! I haven't heard 1 person here ask the real question which is controlling this oil crisis which is, "at what point will I change my current driving and spending habits because of a high oil price??" We've got to $70 a barrell and relatively no change. Do we stop driving our cars so much at $75? How about $80, do we get take the bus to and from work rather than our car when it gets to that?? How about $85 etc etc etc. The current problem is that even with all these oil price increases there has been relatively no impact on the world economy. It will take another shock to drive through peoples heads the need to stop being so wasteful.

What is needed to solve this problem is not more bio-deisel, hydrogen, tar sands or anything else. What is needed BEFORE THESE alternatives become available is a fundamental shift in the way each and every one of us is wasting energy, buying gas guzzling cars we don't need, leaving lights, heaters and air-conditioners on when we don't need to. Otherwise all the alternative fuels will be wasted in exactly the same manner we are sqaundering our oil and then what are we going to do for energy??
 
tockeyhockey
Posts: 880
Joined: Fri Feb 04, 2005 10:57 pm

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:32 am

Quoting Cedarjet (Reply 16):
People just have no idea how much bang for buck oil gives us, and how there really isn't anything else available to us that is in the same ballpark (also, oil just comes straight out of the ground, you don't have to grow crops or refridgerate it to -200 deg C like ethanol or hydrogen).

recent research into switch grass suggests that it may soon be on a par with oil in terms of abundance and the "energy in/energy out" ratio. if we can develop a turbine that runs on ethanol, we shouldn't be too far away from a renewable propulsion source.

also, you seem to be insinuating that oil comes out of the ground as kerosene, gasoline, and deisel fuel. obviously, there is a lot of energy used in the creation of usable fuel. it's not as if oil is a "perfect" energy source.

i would suggest some further reading on the subject of switch grass:

http://bioenergy.ornl.gov/papers/misc/switgrs.html
 
kdeg00
Posts: 133
Joined: Thu Dec 09, 2004 5:41 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:32 am

Quoting Lufthansa (Thread starter):
It seems that the President of the Islamic Republic of Iran is dead set on developing a nuclear bomb.

They have just announced that they have successfully enriched Uranium, and that they are determined to work on the heavy water plant, which could potentially be used to produced plutonium.

The rhetoric is becoming a bit rediculous...Iran is enriching uranium, a necessary step in the production of fuel for nuclear power plants. Every country with nuclear power plants either enriches uranium or buys it from another producing country. If I were a middle-eastern government, I would not feel very comfortable about being able to secure a consistent supply of nuclear fuel from US, French or UK producers and would take steps to produce my own in order to avoid any potential embargo.

What is going to drive the price of oil throught the roof is the devisive effect of US and British foreign policy on oil producing nations. I would expect a cascade effect of lowered exports from middle eastern countries looking to protect their energy resources, continued minimal exports from Iraq and stockpileing by oil importers to be the driving force on prices, not because of an actual scarcity of the oil itself, but because profit margins can be increased and passed on to a public that falls for the story that there is a current "oil shortage".
 
pbottenb
Posts: 403
Joined: Sun Sep 11, 2005 9:29 am

RE: Oil Is Going To Skyrocket

Thu Apr 13, 2006 4:45 am

Quoting Dispatchguy (Reply 10):
Quoting FlightShadow (Reply 1):
However, I remember reading a few months back that some guy had potentially found a huge oil supply in the Colorado/Utah (do they call it the "great basin"? trying to remember 4th grade...) area that would supply oil for many years to come. Haven't heard anything further about this though...which is kinda troubling

I hadnt heard that; which doesnt mean anything in an of itself; however, I would be willing to bet that it'll be 20+ years before they are able to extract the first "production" drop of oil due to the environmentalist groups will come to the defense of some banana slug, or something like it.

Look at ANWAR...

The sky will not fall...If you look at the oil sands and shale deposits in the US, Canada and Venezuela there is plenty of hydrocarbon based energy to fuel the next 300 years...at a price. I believe that at a steady price of $50/barrel over time each country's reserves of hydrocarbons is almost equal to Saudi Arabia's oil reserves - the Oil Sands in Alberta are now starting to be mined....

http://www.energy.gov.ab.ca/89.asp

http://www.rockymountainnews.com/drm...cle/0,1299,DRMN_86_4051709,00.html

"While we were trying to do the math, O'Connor told us the answers. Upwards of a million barrels an acre, a billion barrels a square mile. And the oil shale formation in the Green River Basin, most of which is in Colorado, covers more than a thousand square miles - the largest fossil fuel deposits in the world.

Wow."
Im buying stock in Syncrude....

PB