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Guest Post: OPEC Has Lost The Power To Lower The Price of Oil

Tyler Durden's picture





 

Submitted by Chris Martenson contributing editor Gregor Macdonald

OPEC Has Lost The Power To Lower The Price of Oil

There’s been a lot of excitement in the past year over the rise of North American oil production and the promise of increased oil production across the whole of the Americas in the years to come. National security experts and other geo-political observers have waxed poetic at the thought of this emerging, hemispheric strength in energy supply.

What’s less discussed, however, is the negligible effect this supply swing is having on lowering the price of oil, due to the fact that, combined with OPEC production, aggregate global production remains mostly flat. 

But there’s another component to this new belief in the changing global landscape for oil: the dawning awareness that OPEC’s power has finally gone into decline. You can read the celebration of OPEC’s waning in power in practically every publication from Foreign Policy to various political blogs and op-eds. David Ignatius of the Washington Post wrapped up nearly all of the recent claims in a nice bundle in his May 4, 2012 piece, An Economic Boom Ahead?, when he quoted PFC Energy’s David West:

“This is the energy equivalent of the Berlin Wall coming down,” contends West. “Just as the trauma of the Cold War ended in Berlin, so the trauma of the 1973 oil embargo is ending now.” The geopolitical implications of this change are striking: “We will no longer rely on the Middle East, or compete with such nations as China or India for resources.”

(Source)

While it’s true that the Americas hold great promise to convert natural gas resources to higher production levels, that is not the case with oil. The celebration of a geo-political swing in energy power therefore misses a crucial point: No region -- from OPEC to Non-OPEC, from Africa to Russia -- has the single-handed ability to lower the price of oil now, because none can bring on new supply quickly enough for a long-enough sustained period of time.

And there is more to this story than meets the eye.

History of OPEC

For over 30 years, OPEC has produced less than half of the world’s oil. Indeed, as of today, OPEC produces only a little more than 40% of the world’s oil. But most of the world’s spare capacity has been held by Gulf State producers. Thus OPEC, primarily Saudi Arabia, has long been able to control the price of oil in not one, but two, directions. Historically this has meant that the concentration of oil pricing power resided with OPEC and its largest producer, Saudi Arabia.

But starting in 2005, global oil markets sensed that OPEC was only able to influence the price of oil in one direction: higher, by lowering output. OPEC’s ability to lower prices started to crack, break up, and generally fail as the first phase of oil’s repricing headed into 2008. Indeed, OPEC raised production several times in the 2004-2008 period, attempting to restrain oil prices as it moved to protect the global economy from an oil shock. However, the oil market, which was going through a fundamental transition at the time, as it reoriented itself towards insatiable, price-insensitive demand from Asia -- paid little attention.

Instead, supply disruptions at small producers and in small regions had a greater influence on oil price (pushing it higher) than OPEC's influence on attempting to push the price lower.

It’s actually not clear that OPEC has had any measurable influence on restraining oil prices for years. Summer hurricanes in the Gulf of Mexico, unrest and outages in the Niger Delta, and various strikes presented greater upward pressure on oil prices than upward OPEC supply changes.

The Mythology of OPEC

There is a trailing cultural myth, therefore, (which is nothing more than a hangover from 30 years ago), that OPEC can mount swift, price-killing upsurges of production. But as the below chart shows, OPEC production has made no progress in at all in the seven years since 2005, as oil began its price transition.

As oil rose above $50 in 2005, eventually reaching $90 in 2007, and then on to levels above $140 in 2008, OPEC production both rose and fell, but without any reliable correlation to price. In the aftermath of 2008, OPEC production has correlated better with the recovery in oil prices. But again, the rise in OPEC production has only come back towards the previous highs from last decade. Here is a recent news story rather breathlessly discussing the most recent OPEC production levels this year:

Acting to mitigate market nervousness amid Iran supply fears, OPEC on Thursday said it was pumping more oil than the market needs—at levels not seen since summer 2008—and expressed a cautiously optimistic note on demand. The cautious optimism, combined with a production boost sufficient to cover all of Iran's oil exports, is likely to further stabilize oil markets, where volatility by some measures has already smoothed in recent weeks. In its latest monthly market report, the Organization of Petroleum Exporting Countries said its crude production was 32.42 million barrels a day in March, up 317,000 barrels a day from the previous month.

Yes, but there’s a neglected point to make: these production levels are not special. Not meaningful. And are not newsworthy in any sense. Production at/above 32 million barrels a day? That level has been reached at least 4-5 times since 2005, with at best weak correlation to price changes.

Let's take a closer look at the global share of oil supply, divided in two between non-OPEC and OPEC production.

Non-OPEC vs. OPEC Oil Production 

There are several possible conclusions to draw from the above chart, which shows that non-OPEC provided nearly 58% of global crude oil supply in 2011, and OPEC provided 42%.

  1. Non-OPEC is the domain of private oil companies, and has managed to increase its market share over the past 30 years through competition and through the use of technology.
  2. OPEC’s market share has stagnated, possibly due to the predominance of state-run oil companies and the interference of political structures.
  3. Non-OPEC has the pricing power, due to its larger market share.
  4. Or perhaps OPEC still retains the pricing power, due to its greater quantity of spare capacity.

There’s an element of truth in each of these observations. 

Many also believe that both OPEC and non-OPEC could be producing a lot more oil. In the case of OPEC, many harbor the view that state-run producers and governments are sitting on massive, hidden spare capacity and retaining it as a cartel to manipulate oil prices higher. In the case of non-OPEC, many believe that environmentalists, regulations, and other limits placed by democratically-elected governments are suppressing a wall of supply that could come to market easily if only the oil is ‘set free.’

These views, however, are not only extreme but shaky. They are typical of the kind of grand claims that fit people’s worries and suspicions, rather than fitting any empirical data. The fact is that OPEC spare capacity has been under pressure for some time despite persistent belief to the contrary, with estimates running below 3 mbpd, or even below 2 mbpd. (For recent commentary on OPEC spare capacity, see A Model of Oil Prices by Chris Nelder). The case for hidden, held-back oil capacity in OPEC is weak, especially as domestic populations in the Gulf have dramatically increased the consumption of their own oil.

Meanwhile, non-OPEC large producers like Russia have significantly increased production this past decade. And regions like North America have been able to slow declines. Western oil companies -- which dominate non-OPEC production -- have scoured the globe looking to replace their reserves, but largely to no avail. This is why ExxonMobil and ConocoPhilips eventually gave up, capitulated, and bought natural gas assets instead. By doing so, they followed in the steps of Royal Dutch Shell, which had taken the natural gas pathway years earlier.

Therefore, a fact about non-OPEC production that was unknown even to the industry ten years ago is now very plain: There just isn’t a vast quantity of new oil that can come online easily and inexpensively outside of OPEC-controlled regions. Only Russia, the largest non-OPEC producer and now the largest single country producer in the world -- eclipsing even Saudi Arabia -- was able to significantly increase production.

A Window into Non-OPEC Supply: Russia

Two charts will tell us all we need to know about the limits facing non-OPEC crude oil production. First, let’s take a look at total non-OPEC production on an annual basis:

Just as with OPEC production, little if any progress has been made in the past seven years. This has been a complete surprise to most analysts, especially within the industry itself. Who would have thought that with a regime change in oil prices, non-OPEC could not sustainably increase production to much higher levels? Instead, non-OPEC production remains stuck around a ceiling, just like OPEC.

The Big Reveal comes, however, when we take a look at non-OPEC supply without Russia.

Without Russia, non-OPEC supply has actually lost about a million barrels a day of production in the last ten years. This speaks volumes to the quickly-rising costs of bringing on a new barrel of oil in non-OPEC regions, which we will discuss further in Part II of this report.

The Price of Oil When OPEC Is Powerless

Let’s imagine for a moment that OPEC could, if it chose to, pour an extra 3 mbpd of oil on the world market. And that by doing so, it could lower the price of WTIC oil to $90 or less. What would that accomplish? And for how long would such “lower” prices last?

In Part II: The Cruel Math of the Marginal Barrel, we explain that while fluctuations in economic activity can certainly raise and lower the price of oil, there are deeper structural reasons why OPEC -- even with its spare capacity -- can no longer sustainably “lower” the price of oil. Moreover, we will discuss how, paradoxically, any surge of supply from OPEC which did persuasively lower the price of oil could wind up having the opposite effect on price eventually thereafter.

Surprising? Yes, but not strange or unlikely, for reasons we will explain. Finally, we conclude that oil’s floor price -- outside of volatile 30-90 day periods -- is higher than ever before. This will make for a large surprise, should another acute phase of the financial crisis rock oil prices lower over a 2-3 month period.

Click here to access Part II of this report (free executive summary; paid enrollment required for full access).

 


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Tue, 05/22/2012 - 21:00 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Camel Shit!

Tue, 05/22/2012 - 21:25 | Link to Comment ACP
ACP's picture

That could probably be used as a fuel too.

Tue, 05/22/2012 - 23:55 | Link to Comment CrazyCooter
CrazyCooter's picture

The peak oil meme is nothing new ... I think most ZH regulars are familiar with the the poster ...

http://www.afterpeakoil.com/poster.htm

I have one of these in my office. Great conversation starter (the sheep don't ask).

Personally, I am closing in on 40. I got 30 years of this shit to survive. If you wonder how, make sure your community (1) produces food and (2) has hydro-power or an equivalent. This is thinking 10+ years down the road, but still ...

Oh, and common law and gun rights. Need those too.

Regards,

Cooter

Wed, 05/23/2012 - 08:43 | Link to Comment jayman21
jayman21's picture

I had to drop the www to see the poster.  Thanks for the link.

 

http://afterpeakoil.com/

Tue, 05/22/2012 - 21:01 | Link to Comment Rahm
Rahm's picture

Almost time to go long oil.  Going to soar soon!

Tue, 05/22/2012 - 21:02 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

btw, my latest stock pick is OAS, it will be $35 to $40 in a year for those that still invest, below 25 is a screaming buy and if it gets down to 22 back up the truck

Tue, 05/22/2012 - 21:25 | Link to Comment Marginal Call
Marginal Call's picture

Bakken is fools gold.  The depletion rates are killers.

Tue, 05/22/2012 - 21:37 | Link to Comment I am a Man I am...
I am a Man I am Forty's picture

there is depletion, but more than made up for in additional holes in the ground, i owned BEXP, and statoil disagrees with you, so does continental resources

Tue, 05/22/2012 - 22:35 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Terminology issues.  Depletion is not the right word.

Flow rate is the right term.  And yes, you drill frantically to undo the loss of flow rate from wells about 18 months old that have begun to reduce output.

And . . . clearly . . . a point is reached when the cumulative decline from all those frantically drilled wells that are 18 mos old overwhelms your ability to drill new holes.  Every well drilled begins its death at 18 months of age.  That contrasts with Ghawar that has wells producing for decades.

It won't be long.

Wed, 05/23/2012 - 00:01 | Link to Comment CrazyCooter
CrazyCooter's picture

Your point, and the point up thread, is very important for people to understand.

Fracking has MUCH less "area under the curve" than traditional wells, and at additional capital costs. In other words, you frack, rates shoot up, and fall back down pretty quick. In traditional wells, you drill, and the oil flows for a long time, then you pump, then you inject ... all at much lower capital cost over a much longer period of time.

Fracking in NatGas is broke dick; it won't work. It will simply burn down the forrest and what survives is still around (some will die, some will live).

Fracking in oil is different because oil prices are SO DAMN HIGH. Fracking for oil, as best I can tell, is a profitable business model. Lots more capital, but if prices stay up, the business model works.

Which is why oil prices are not going down any time soon. **

Regards,

Cooter

** Disclaimer: price projection assumes a stable money supply. In the event of a rapidly expanding money supply, you are fucked.

Wed, 05/23/2012 - 13:21 | Link to Comment DaveyJones
DaveyJones's picture

well said

Tue, 05/22/2012 - 21:42 | Link to Comment Canadian Dirtlump
Canadian Dirtlump's picture

as a bridge to alternative sources and a legit source of easy to get domestic oil it certainly has its place. certainly more than say... nothing..

 

every oil company i deal with here is pleased with their results and has a robust drilling program.

Tue, 05/22/2012 - 21:53 | Link to Comment Marginal Call
Marginal Call's picture

I can't argue with anything you say, it is a fine bridge.  I also get email teasers about the next Saudi Arabia from every asshole pump and dump operation in the country wanting to charge me $500 for a tip about a Bakken player. 

 

I just want people to have a realistic idea about what it is before they pin their hopes or their savings to it.

Tue, 05/22/2012 - 23:49 | Link to Comment Spastica Rex
Spastica Rex's picture

Realism is for pussies and poor people.

Tue, 05/22/2012 - 21:57 | Link to Comment Taint Boil
Taint Boil's picture

 

 

May be of interest to some

Bakken Oil Field Myth:
Link 1
Link 2
Link 3
Link 4
Link 5 Wikipedia

Edit: Older articles but still beware of the snake oil BS.... just trying to stir things up a bit .... where is Trav when ya need him

Tue, 05/22/2012 - 21:28 | Link to Comment jekyll island
jekyll island's picture

East West Petroleum.  Just signed contracts to frac oil wells in middle east, exporting the technology to Saudi Arabia.  Will do quite well in the next 18-24 months.  

Tue, 05/22/2012 - 21:05 | Link to Comment Hulk
Hulk's picture

I have only one question: Who is making all those fucking barrels ???

Tue, 05/22/2012 - 21:40 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Gulf Barrel Fitters

Local 911

Tue, 05/22/2012 - 21:40 | Link to Comment JackT
JackT's picture

BINGO! No one knows.

Tue, 05/22/2012 - 22:00 | Link to Comment Marginal Call
Marginal Call's picture

Joseph Hazelwood.

Tue, 05/22/2012 - 21:06 | Link to Comment sunaJ
sunaJ's picture

Oil makes the world go 'round until it doesn't.

Tue, 05/22/2012 - 21:07 | Link to Comment Caviar Emptor
Caviar Emptor's picture

But but I thought it was cool to drive a Hummer!

I ordered a mining truck with 18 foot wheels just to drive to Taco Bell 

Tue, 05/22/2012 - 21:11 | Link to Comment Surly Bear
Surly Bear's picture

I ordered a mining truck with 18 foot wheels just to drive to Taco Bell 

That's...awesome.

Tue, 05/22/2012 - 21:25 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Supersize me....

Tue, 05/22/2012 - 21:46 | Link to Comment Manthong
Manthong's picture

What, are you picking up dinner for Michael Moore?

Wed, 05/23/2012 - 02:23 | Link to Comment Seer
Seer's picture

No, it's for Newt "I can lower oil prices through the 'free market'" Gingrich.

Tue, 05/22/2012 - 21:57 | Link to Comment PrinceDraxx
PrinceDraxx's picture

Now if you could park closer than half a mile away you'd be doing it like a boss. lol

Tue, 05/22/2012 - 21:10 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Generally speaking, guys who write about oil scarcity do so for pay, or hope to be paid, and as such they will NOT take extreme positions.

They will not extrapolate what oil scarcity means for 7 billion people.

We do that here, and it doesn't involve price or trading.

Tue, 05/22/2012 - 21:11 | Link to Comment DeadFred
DeadFred's picture

FP=CFR

Tue, 05/22/2012 - 21:15 | Link to Comment spinone
spinone's picture

It means war.  Which is why we occupy the land between China and the middle east:  Afganistan.

Tue, 05/22/2012 - 22:35 | Link to Comment earleflorida
earleflorida's picture

the ISI control the afghan's

Tue, 05/22/2012 - 23:51 | Link to Comment Spastica Rex
Spastica Rex's picture

I thought we were trying to make life better for women.

Wed, 05/23/2012 - 07:17 | Link to Comment ThirdWorldDude
ThirdWorldDude's picture

Don't forget the emancipation of poppy fields.

Tue, 05/22/2012 - 21:37 | Link to Comment Errol
Errol's picture

Crash, you are right: folks who are selling something are just trying to sell advice on profiting from adversity in the short/medium term.

Then again, some of us who have been debating the consequences of "extrapolate what oil scarcity means for 7 billion people" for years now don't really want to discuss it any longer, either.  It is way too late for any meaningful intervention.  As John Michael Greer puts it, "...the word problem implies there is a solution.  What humanity has is not a problem, but a predicament."

I will mention that an engineer-president who has yet to be fully appreciated tried to warn America regarding the consequences of going all-in on fossil fuels.  The voters FLUNG him out of office.  Whatever happened to Americans who actually wanted to hear the truth?  It seems nobody wants a president who "cannot tell a lie".  How many Americans would vote for a guy whose campaign slogan is "Honest Abe"?  It appears that humanity bought and paid for what they're gonna get, good and hard.

Tue, 05/22/2012 - 22:00 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

Thank you.

Tue, 05/22/2012 - 22:26 | Link to Comment Ident 7777 economy
Ident 7777 economy's picture

 

 

Errol:

"I will mention that an engineer-president who has yet to be fully appreciated tried to ..."

 

Carter - FAIL. (GENIUS compared to obummer though)

 

'Alternative energy' started during his term has also FAILED.

 

Do you reccall the name of the 'index' started during his term? The "Misery Index"?

 

Begun for a reason ...

 

 

 

Wed, 05/23/2012 - 06:34 | Link to Comment malikai
malikai's picture

I don't know why anyone would junk this. It's true.

But I do miss the sweater talks.

Wed, 05/23/2012 - 09:27 | Link to Comment Flakmeister
Flakmeister's picture

Take away the North Sea and Prudhoe from Reagan and you would have had "Mourning in America"....

Tue, 05/22/2012 - 22:33 | Link to Comment DaveyJones
DaveyJones's picture

Well said Errol. We screwed this one up big time.

Tue, 05/22/2012 - 23:52 | Link to Comment Spastica Rex
Spastica Rex's picture

plus infinity

Wed, 05/23/2012 - 02:34 | Link to Comment AnAnonymous
AnAnonymous's picture

How many Americans would vote for a guy whose campaign slogan is "Honest Abe"? It appears that humanity bought and paid for what they're gonna get, good and hard.

________________________________________

So true. So true. Made me laugh. See how the jump from 'Americans' to humanity is made easy, even for a blatantly restrictive event like US of A political elections.
Hijacking humanity, so natural to US citizens.
Really.

No, humanity did not buy and pay for what they're going to get.

Humanity will get what US citizens force on them.
That is the point.

Wed, 05/23/2012 - 09:55 | Link to Comment Errol
Errol's picture

Mr Anonymous, I was conscious of my jump from Americans to humanity when I wrote it.  It appears that most of the rest of the world is very interested in attaining the American "lifestyle".

For example, how is the sale of cars in China trending?  How is Chinese oil consumption trending?

Wed, 05/23/2012 - 04:59 | Link to Comment Oh regional Indian
Oh regional Indian's picture

I have the solution. 

ori

Tue, 05/22/2012 - 21:10 | Link to Comment Joe The Plumber
Joe The Plumber's picture

Swing capacity is mostly a myth, but even if saudi could ramp up to 15 million barrels per day within a year it is heavy crude and the bottleneck is heavy crude refining capacity. There is no significant excess capacity that could absorb millions more barrels of heavy crude right now

We better hope that fraking applied to existing wells changes the depletion slope. I am cautiously optimistic we may enter another brief economic spurt from cheap energy over the next twenty years

Tue, 05/22/2012 - 21:24 | Link to Comment sangell
sangell's picture

Cheap energy has its own costs. If you drive the price of oil down you take out high cost production and new investment in hard to get oil. If it costs $75/barrel to produce Alberta tar sand oil any price below $75 shuts in that oil. Same with deep water oil. No one's going to drill for it if the price doesn't cover the cost of production.

Tue, 05/22/2012 - 22:04 | Link to Comment Yes_Questions
Yes_Questions's picture

 

 

The investment was outsourced, rather, appropriated vis-a-vis rifle, Soldier and drone.

Tue, 05/22/2012 - 22:17 | Link to Comment Joe The Plumber
Joe The Plumber's picture

Good point

Tue, 05/22/2012 - 22:42 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Price of the failed Repsol well north of Cuba -- $125 million.

Wed, 05/23/2012 - 16:47 | Link to Comment Flakmeister
Flakmeister's picture

It does not just get shut in... the oil patch is all about cashflow... Selling at below cost does destroy the ability to fund reserve replacement though....

Tue, 05/22/2012 - 21:27 | Link to Comment Marginal Call
Marginal Call's picture

It most certainly does affect depletion rates.  You turn it into a maximum resevoir contact well, and it's the equivilent of nuking hoover damn as far as flow rates go.

Tue, 05/22/2012 - 21:42 | Link to Comment Errol
Errol's picture

That's sure to be a winner: another short-term bump for current consumers, with the consequences passed on to your kids...

Tue, 05/22/2012 - 22:09 | Link to Comment Joe The Plumber
Joe The Plumber's picture

If it happens try to profit from it and pass the money on to your children

Wed, 05/23/2012 - 02:28 | Link to Comment Seer
Seer's picture

Isn't this what the banksters and pols are doing?

Fine, but be sure to advise your children to not flaunt it (learn humility) lest you wish for their heads to land on pikes.

Tue, 05/22/2012 - 21:15 | Link to Comment Haole
Haole's picture

Well maybe throwing five figures at Crescent Point and Inter Pipe today might prove to have been a worthwhile bet...

Tue, 05/22/2012 - 21:12 | Link to Comment wisefool
wisefool's picture

We hate them because they gave us too much oil.

Tue, 05/22/2012 - 21:13 | Link to Comment DaveyJones
DaveyJones's picture

...along with everyone else

Tue, 05/22/2012 - 21:23 | Link to Comment yabyum
yabyum's picture

I have been cornholed so many time betting on oil, I think I will just stack some silver.

Tue, 05/22/2012 - 21:30 | Link to Comment Marginal Call
Marginal Call's picture

It's a highly liquid, volitile market, that's too big for anybody to corner.  What more could you ask for?

Tue, 05/22/2012 - 21:56 | Link to Comment grid-b-gone
grid-b-gone's picture

Don't forget railroads as Peak Oil investments. Buffett hasn't lost his touch. It just takes decades sometimes to understand why his moves are so smart.

Railroads not only come with plenty of real estate and right-of-ways that are almost impossible to develop by an upstart (moat), their equipment-heavy business model is great if your country is overprinting their fiat currency. It's like owning gold with income cash flow. As for oil efficiency, one gallon moves 436 tons one mile.

Rising oil quickly transfers freight from 18-wheelers to railcars. Got a kid who needs a job for the next 30 years? Railroad freight sales rep.

Now tell me why Buffett is buying more newspapers in the internet age. That one I don't understand.

Tue, 05/22/2012 - 22:03 | Link to Comment PrinceDraxx
PrinceDraxx's picture

Didn't you hear? Congress is voting to make propaganda legal for the MSM again.

Tue, 05/22/2012 - 23:54 | Link to Comment Spastica Rex
Spastica Rex's picture

+1 for insight.

-1 for obscene avatar.

OK, +1 for obscene avatar.

Wed, 05/23/2012 - 00:03 | Link to Comment mjcOH1
mjcOH1's picture

Because even when everyone is in debt up to their eyeballs and can't afford Cinese electronics to browse the interwebs, they'll still have $0.25 to check the NBA action.  And think of the secondary demand for improvised winter clothing.

Wed, 05/23/2012 - 02:44 | Link to Comment Seer
Seer's picture

I was thinking railroads WAY before Buffett jumped in.  But I soon changed my belief that they'd magically take off when fuel prices jumped.  My reasoning?  If fuel is high then that'll mean that there will be LESS overall consumption of goods (more people will be using their income on energy), which will mean less need to transport, by ANY method.

I used to talk to a guy who worked for the railroad and had heard through him how things had slowed down.

Maybe things pick up, but to me there's better places to utilize capital (such as toward one's own business/life rather than toward someone else's [like Buffett's]).

Wed, 05/23/2012 - 09:32 | Link to Comment Flakmeister
Flakmeister's picture

One problem with the choo-choos is most of their revenue is from hauling coal.....

Tue, 05/22/2012 - 21:25 | Link to Comment grid-b-gone
grid-b-gone's picture

One gallon of oil = 300 man hours of work. Some say it's as much as 600 man hours. There may be substitutes, but there is no comparable substitute. 

Peak oil naysayers may try to ignore the issue and attempt to blow it off like critics are doing successfully with global warming. The difference is that oil has worldwide demand and a highly fluid market. When demand exceeds supply, the market discovers the imbalance quickly. 

Since 1982, the world has not discovered more oil than it has pumped.

Vast reserves of U.S. coal and Canadian tar sands are theoretical alternatives. The huge difference comes when we no longer drill for energy, but rather mine for it ... a whole notha level of effort.

The title of the article exactly sums up the changed game and makes it clear why Saudis consistently over-reported their reserves.   

Tue, 05/22/2012 - 21:43 | Link to Comment JackT
JackT's picture

Sorry Mr. Gore you lost me at "global warming" which by its own definition represents one of the biggest scams in trade ever proposed (re: carbon credits).

Tue, 05/22/2012 - 21:57 | Link to Comment Haole
Haole's picture

I agree  but he does have an interesting and cogent point regarding "mining" for oil however.

Tue, 05/22/2012 - 22:02 | Link to Comment Idiot Savant
Idiot Savant's picture

The fact that carbon credits are a scam doesn't necessarily equate to global warming being a myth. The same interests that deny peak oil also deny global warming.

 

Tue, 05/22/2012 - 22:07 | Link to Comment PrinceDraxx
PrinceDraxx's picture

Neither exist in a provable manner. So what is your point? Global warming has been disproved and at $150+ per barrel, you will drown in production.

Tue, 05/22/2012 - 22:30 | Link to Comment DaveyJones
DaveyJones's picture

"Disproved?" I missed that trial. Tell us why the ice cores while they show earth temperatures rise and fall over long periods of time now show temperatures rising at a speed never recorded. Then next explain that coincidental timing of this never before speed with the burning of fossil fuels, an event that has never before occured on this planet. Are you suggesting that mankind can not and has not effected his "environment?" Is a planet an environment? Do any of the things we send up to our atmosphere alter it in any way?

"Drowning in production at 150" So price is the only factor? Not the ability to extract or the rapidly increasing world demand? As someone pointed out above, what is the value for 300-600 man hours of work? Man hours that you can expel at speeds much faster than a human.

Idiot savant's point is a universal truth. Governments scam everything and tax it. The carbon tax proves nothing.      

Tue, 05/22/2012 - 22:33 | Link to Comment Mad Max
Mad Max's picture

Coals to Newcastle.

Wed, 05/23/2012 - 07:52 | Link to Comment francis_sawyer
francis_sawyer's picture

Tell me why all the other planets in the solar system are warming as well... I guess the Martians don't drive enough Priuses...

Wed, 05/23/2012 - 10:06 | Link to Comment Flakmeister
Flakmeister's picture

Um... please provide any reputable evidence for this...

So, you are telling us that we have to suspend belief in 150 years of experimentally verified radiative transfer theory to somehow make the predictable effect of an additional ~200 ppmv of C02 go away?

You are telling us that thermodynmaics, IR spectroscopy and a good chunk of quantum mechanics is wrong...

Wow, that is a healthy dose of D-K....

Tue, 05/22/2012 - 23:55 | Link to Comment Spastica Rex
Spastica Rex's picture

The whole world has to change if FF growth ends. God dies.

Wed, 05/23/2012 - 00:31 | Link to Comment mess nonster
mess nonster's picture

Could it be a coincidence? I mean, maybe we simply started an energy-intensive way of life either during, or even because of, a long term solar ramp-up in energy output. Hotter sun=hotter planet. Maybe it isn't us after all. But we'll never know- too many tobacco scientists had to find work for whoever would pay them to produce whatever science was wanted. Science=damn  lies and statistics. if you will believe a scientist, I bet you'll believe an economist, and if you will believe an economist, I have a bridge to sell you.

Wed, 05/23/2012 - 03:58 | Link to Comment Seer
Seer's picture

Because one person/some people have lied then that means that you too lie[d]?  Why not kill yourself if you believe that EVERYTHING is a conspiracy to lie?

"if you will believe a scientist, I bet you'll believe an economist"

SCIENCE is a PROCESS.  Someone who practices the scientific process is a scientist.  An economist in NO way practices science, does not engage in readily repeatable proofs.

Again, kill yourself because, well... science has explained gravity, and because everyone who practices science lies, well, that means that gravity is a lie!

People who argue that humans cannot have an affect on the planet just don't understand simple physics.  I burn firewood.  I go get it (mostly downed timber), chop it up, allow it to season, and then BURN it.  The "burn" produces HEAT.  That HEAT raises the air temperature within my house.  I could just as well be doing the same with oil and or coal (which also are used for home heating).  To state that one cannot affect one's environment through the rapid consumption of stored solar energy (wood, oil, coal etc.) is beyond stupid.

Wed, 05/23/2012 - 06:29 | Link to Comment Ace Ventura
Ace Ventura's picture

Stating that burning some wood to raise the temperature in a house is remotely significant as proof of anthropogenic global warming......isn't exactly a stroke of genius.

Wed, 05/23/2012 - 03:16 | Link to Comment Non Passaran
Non Passaran's picture

Wtf are you talking about? What rising temperatures? Where?
Global temps haven't risen since last century.
If you compare that trend with the trend of constantly growing co2 you will see that there is no big correlation. In other words yes, co2 does make the atmosphere slightly warmer but that's about it. It's not the cause of anything, it won't cause a catastrophe and in any case it's cheaper to work around it than against it.

Wed, 05/23/2012 - 11:08 | Link to Comment DaveyJones
DaveyJones's picture

"yes, co2 does make the atmosphere slightly warmer but that's about it. It's not the cause of anything"

I want you to repeat that three times

and you have a lot of reading to do

and you need new thermometers

 

  • State of the Climate | Global Analysis | April 2012   www.ncdc.noaa.govNESDISNCDCCached You +1'd this publicly. Undo

    May 15, 2012 – Unlike March 2012, where extremely cool and warm temperatures engulfed much ... The last time land-only worldwide temperatures were below average ... On April 6th, a new daily minimum temperature record was set when ...

  • Hot Summer of 2011 Rewrites Record Books | Climate Central   www.climatecentral.org/blogs/a-record-hot-summer-interactive-map/Cached You +1'd this publicly. Undo

    Sep 8, 2011 – More record warm temperatures were set this summer than during any other summer in the past decade. Use our interactive map to find out ...

  • Historic record warm weather brings summer to central and eastern ...   www.washingtonpost.com/...weather...record-warm-weather.../gIQA...  You +1'd this publicly. Undo

    Mar 15, 2012 – In the U.S., over the last 12 months [spanning February 2011 to January 2012], daily warm weather records outpaced cold weather records by a ...

  • Recent Climate Change - Temperature Changes | Science | Climate ...   epa.gov/climatechange/science/recenttc.htmlCached - Similar You +1'd this publicly. Undo

    These records indicate a near level trend in temperatures from 1880 to about 1910, ... During the first half of the last century, there was likely less human impact on ... by weather balloons warmed at a rate of 0.22°F per decade near the surface ...

  • Past decade's extreme weather is manmade, new study suggests ...   www.csmonitor.com/.../Past-decade-s-extreme-weather-is-manmade-...Cached You +1'd this publicly. Undo

    Mar 26, 2012 – Extreme rainfall and heatwaves over the past decade have been ... and record hot summers in Europe; a record number of tropical storms and ...

  • Claims of a Decade of Cooling RefutedBy Analysis Showing It ...   www.yaleclimatemediaforum.org/2009/08/warmest-by-fair-margin/Cached - Similar You +1'd this publicly. Undo 8 posts - 1 author - Aug 18, 2009

    The world has, in fact, continued to warm over the past decade in all five ... For both temperature records, eight of the 10 hottest years on record ...
     Get more discussion results

  • Past Decade Warmest on Record, NASA Data Shows - NYTimes.com   www.nytimes.com/2010/01/22/science/earth/22warming.htmlSimilar You +1'd this publicly. Undo

    Jan 21, 2010 – Past Decade Warmest on Record, NASA Data Shows ... Administration report on warmer temperatures in the past decade misidentified the ...

  • After the hottest decade on record, it's the hottest year on record ...   thinkprogress.org/.../hottest-decade-year-week-record-low-arctic-sea-...Cached You +1'd this publicly. Undo

    Jul 28, 2010 – The temperature increase of one degree Fahrenheit over the past 50 years ... And the 2010s will be the hottest decade on record and then the 2020s will be the .... Hot temperatures are climate, cold temperatures are weather.

  • Wed, 05/23/2012 - 12:40 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

     

     

    -1 for being a Warmist

     

    The most reliable indicator of boundary layer temperature are satellite mesurements and THEY do not show warming. (I note you have NO cite of that!)

     

    Compared to the repeatedly 'adjusted' surface temperature measurements (which CANNOT now be trusted).

     

    Oh? You didn't know that James Hansen of NASA GISS constantly 'adjusts' the temperature record?

     

    TALK ABOUT COOKING THE BOOKS!!!!!!

     

     

     

    Wed, 05/23/2012 - 13:58 | Link to Comment DaveyJones
    DaveyJones's picture

     

     

     

     boundary layer temperature is far from the last word:

     "The night-time boundary layer is very shallow and by its very existence is decoupled from the deeper atmosphere. Thus, the stable nocturnal boundary layer does not represent the heat content in a large part of the atmosphere. Because of non-linearities in the stable boundary layer in some parameter spaces, T min

     

     

     

     

    is highly sensitive to slight changes in cloud cover, greenhouse gases, and other radiative forcing. This is consistent with the observation studies such as [36] and theoretical studies of [37]. However, the analyses above indicate this sensitivity is reflective of a change in the turbulent state of the atmosphere and a redistribution of heat not a change in the heat content of the atmosphere. Because of the redistribution phenomena and the shallow layer affected, observed minimum temperatures are a very poor measure of the accumulation of heat in the deep atmosphere that is of major concern in greenhouse gas induced climate change.

     

    Climate models with their course resolution cannot accurately simulate the physics important to heat redistribution, their minimum temperatures are suspect. Surface maximum temperatures would seem to represent a more robust measure of the heat content of the atmosphere since daytime boundary layers connect the surface to a depth of one to two kilometres or more and are well mixed. Climate models more accurately simulate daytime mixing which, by its non-local nature, is not as dependent on grid resolution. Thus, daytime maximum temperatures should be much better for detecting and simulating this heat accumulation in the deep atmosphere. However, minimum temperatures may be accurately reflecting local climate change and may be important to societal impacts and to interactions with the cryosphere."

     

     

    http://iopscience.iop.org/1755-1315/13/1/012003/pdf/1755-1315_13_1_012003.pdf 

     

    Wed, 05/23/2012 - 14:15 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

     

     

     

    So, you are not going to contest the statement there have been

     

    (a) no temp changes observed by satellite and

    (b) the surface temp measurements are 'adjusted' (COOKDED) on a regular basis by NASA GISS (by James 'Coal Death Trains' Hansen's group)?

     

     

    (Models, BTW, don't mean shit in view of ACTUAL measured field observations/data.)

     

    While I have on one of you 'warmist' animals on the line, why are you sold over-sold on the idea of global warming?

     

    Your science is flawed, your 'scientists' lie, your scientists can't even do proper statistics (Michael Mann and the Hockey stick fiasco which was featured PROMINENTLY in a couple of the earlier IPCC reports) and analysis of data ... yet you persist ... WHY?

     

     

     

    Wed, 05/23/2012 - 14:25 | Link to Comment DaveyJones
    DaveyJones's picture

    just to bother you

    that's why all the ice cores and animal patterns and plants and temperature readings and thousands of other scientists do it too. 

    shit, you broke the conspiracy

    it was that fucking tucan, bird can't keep his mouth shut

     

    Wed, 05/23/2012 - 10:58 | Link to Comment Flakmeister
    Flakmeister's picture

    Let me guess, if you perform a simplified linear regression over the past 100 years without taking into account the solar and aerosol variations, thereby assuming all global temperature change is due to changing C02 (a logarithmic dependence no less) and the R^2 is lousy you have disproved global warming...

    You may be on to something, why don't you write a paper and submit it for peer review or call up the local community college for some feedback...

    Be sure to get back to us and let us know how it went... 'kay?

     

    Wed, 05/23/2012 - 12:38 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

    Sure. Be glad to. Been to RC lately? Place is dying ... the CAGW gig is up. ("Follow the money" -  AGW 'research' was a scam to achieve funding dollars for lay-about scientists with no real credentials ... unlike Richard Lindzen of MIT, a REAL physicist who doesn't buy into the 'hype or hysteria' by the AGW doomers)

    Wed, 05/23/2012 - 13:53 | Link to Comment Flakmeister
    Flakmeister's picture

    Great rebuttal there.... not...

    Lindzen is a shill, this is the same guy that took tobacco money...

    Plus he is all over the map with his failure to predict climate sensitivity to C02....

    Here is a sampling of his bullshit:

    http://www.skepticalscience.com/Lindzen_Illusions.htm

    Nice try though...

    Wed, 05/23/2012 - 14:07 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

     

    Flakmeister

    " Great rebuttal there.... not...

    Lindzen is a shill, this ..."

     

    Bzzzt!! Baseless, unsupportable ad hominem.

     

    You know, as I pointed out above, follow the moeny; the REAL shills are the shills touting this 'global warming' hoax based on flawed tree ring chronology who have sucked BILLIONS of tax-payer dollars from this gravy train.

     

    The field of global warming is tainted with shills and charlatans. The Climategate emails the last two years revealed that (and there remains MBytes behind a password in a 7ZIPPED file).

     

    Ever view the Harry.read file from the first Climategate e-mail dump?

     

    Astonishing that ANYTHING they have produced has had ANY validity to it  given their methods and coding practices let alone their 'handling' of critical data ...

     

    Course, you warmists, wedded to the CAGW theory can't even come to admit the validity of the e-mails, so corrupted is your value system and in danger of a 3rd degree case of cognitive dissonance you dare not read something contradictory to 'climate orthodoxy' ...

     

    .

    Wed, 05/23/2012 - 15:38 | Link to Comment Flakmeister
    Flakmeister's picture

    I see you are light on science, and long on bullshit...

    Calling Lindzen a shill is not an ad hominem, taking money from someone to represent their posiition is the very defination of shill.  Charging coal interests $2500 a day for your services at any point in your career brings your integerity AGW into question....

    Well, since you seem to be an expert could you explain what exactly the problem was with proxy data and why, to every one else in the world, except those denizens of WUWT and thier ilk, the so-called ClimateGate is closed deal? And moreover, why every investigation of it revealed no wrong doing?

    Maybe you should reserve some of your outrage for the Heartland Institute, now that they have been caught red-handed try to knowingly propagate false information....

     

    Wed, 05/23/2012 - 14:19 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

     

    What Flakmeister ?

     

    You're using the 'skeptical' garbage site that routinely modifies user comments and re-writes articles without any kind of notice whatsoever?

     

    You didn't know about that?

     

    The site is worthless at that rate ... and borders on downright fabrication of material at that rate too.

     

    Again: THIS IS A WORTHLESS SITE: http://www.skepticalscience.com

     

     

    Wed, 05/23/2012 - 15:25 | Link to Comment Flakmeister
    Flakmeister's picture

    Let me guess, you prefer WUWT or Pielke Sr...

    Here is an example of the integrity of  Pielke Sr...

    http://tamino.wordpress.com/2012/04/23/do-the-math/

    followed by...

    http://tamino.wordpress.com/2012/04/27/lets-do-the-math/

    Unlike Mann, the above two posts demonstrate how the "skeptics" operate and why their bull shit never makes it into respectable journals....

    PS Here is a comprehensive rebuttal of some earlier Lindzen work:

    http://www.realclimate.org/index.php/archives/2006/04/lindzen-point-by-point/

    But me thinks you could not even follow the discussion if you tried...

    Wed, 05/23/2012 - 14:15 | Link to Comment DaveyJones
    DaveyJones's picture

    If Lindzen is your ace in the hole, you might need a new deck

    http://thinkprogress.org/climate/2010/01/11/205326/science-lindzen-debunked-again-positive-negative-feedbacks-clouds-tropics/

    if AGW was the only entity and group of scientists and evidence and if their emails actually undermined the fundamental data, there would be a point in there somewhere.

    The issue is politicised on both sides. Duh. There is a shitload at stake here. Probably the biggest shit man has ever dumped. Like the tobacco inudustry, I'm sure oil (and governments) would never cook the books or hire whores either. That never happens does it. The truth comes from the cummulative information from a large number of individuals, plants, animals,daily experience and an infinite number of other pieces of data.....like anything else. 

    you can't pull one "real" scientist out of the hat and settle the issue 

     

    Wed, 05/23/2012 - 21:29 | Link to Comment Flakmeister
    Flakmeister's picture

    Very well said....

    Tue, 05/22/2012 - 22:31 | Link to Comment Mad Max
    Mad Max's picture

    Blah blah Cornucopian moron blah blah.

    Somehow I failed to drown in oil back in 2008, did I miss something?

    Tue, 05/22/2012 - 22:49 | Link to Comment deflator
    deflator's picture

    "Neither exist in a provable manner. So what is your point? Global warming has been disproved and at $150+ per barrel, you will drown in production."

    Drowning in production or drowning in demand destruction? I think it is fairly clear that the past 150 years of unprecedented economic growth predicated on growth in debt  and cheap oil is now running into flat to declining cheap oil production against parabolic debt production.

     What we are drowning in is debt--not cheap oil production.

    Tue, 05/22/2012 - 22:27 | Link to Comment Mad Max
    Mad Max's picture

    Mostly agree, but there is no meaningful difference between drilling for energy vs. mining... both are types of mining.  The difference is in EROEI.  Good coal can have very decent EROEI.  Slightly oily sand, not so much.  All the fossil fuels are being depleted, though it's showing up more dramatically in quality than in quantity, so far - the coal mined today would have been left in the ground as economically worthless 100 years ago.  The oil being produced most places is heavy sulfurous sludge that only the most advanced refineries can really use.  This is all OK, until it isn't.

    Wed, 05/23/2012 - 06:05 | Link to Comment ThirdWorldDude
    ThirdWorldDude's picture

    grid-b-gone

    "There may be substitutes, but there is no comparable substitute."

     

    Spoken like a true oilman...


    The substitutes are out there, but Big Oil and their appointed puppets are working around the clock to suppress the technology and the know-how.

    http://www.youtube.com/watch?v=_q5ahV_SN-M Perendev motor

    http://www.youtube.com/watch?v=Mk1aFV8TMg4 Kapanadze motor

    Tue, 05/22/2012 - 21:28 | Link to Comment disabledvet
    disabledvet's picture

    the only critical use for oil is in transportation. no one is arguing...nor is it presented here...that the use of gasoline has collapsed in the USA. Europe's loss in this regard already is staggering indeed. We have a problem of a GLUT of oil...not scarcity. The age of "scary oil" has been behind us for a decade...maybe more. The world has a problem with DEBT this time. that's EXTREMELY bearish for oil as "stay cations" and "hobby farms" and just plain barter are the order of the day.

    Tue, 05/22/2012 - 21:34 | Link to Comment Marginal Call
    Marginal Call's picture

    Cheap oil means expanding economies.  It's growth in a barrel.

     

    You've made the connection with stay cations and hobby farms, but couldn't quite finish the equation.  Energy = the economy. 

    Tue, 05/22/2012 - 22:29 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

     

     

    +1 cheap energy = prospering economy.

    Tue, 05/22/2012 - 22:46 | Link to Comment DaveyJones
    DaveyJones's picture

    enjoying your comments. Can't help but thinking a lot of modern economic theory and credit based systems are based on the false premise that expanion is infinite because the energy foundation is as well.  

    Tue, 05/22/2012 - 23:19 | Link to Comment forward ho
    forward ho's picture

    Disabledvet, first off God bless you for your sevice. however, your statement that oil is only critical for transportation is felonius at best. Our whole world runs on the by-products of petroleum. plastic, use much lately? how about wire insulation? fertilizer, gel caps, tires, I could fill the page with vital products which have a base in petroleum. Forget energy, the world runs on petro products. Take a wider veiw on the subject. Without oil byproducts this world will be back in 1800's. Green energy is a fools dream, it fails to take into account the other products vital to our survival, which find their way to us via oil. Remember the big picture, it's the devil in the details which will off us as a species. Carry on soldier.

    Tue, 05/22/2012 - 23:20 | Link to Comment forward ho
    forward ho's picture

    Disabledvet, first off God bless you for your sevice. however, your statement that oil is only critical for transportation is felonius at best. Our whole world runs on the by-products of petroleum. plastic, use much lately? how about wire insulation? fertilizer, gel caps, tires, I could fill the page with vital products which have a base in petroleum. Forget energy, the world runs on petro products. Take a wider veiw on the subject. Without oil byproducts this world will be back in 1800's. Green energy is a fools dream, it fails to take into account the other products vital to our survival, which find their way to us via oil. Remember the big picture, it's the devil in the details which will off us as a species. Carry on soldier.

    Wed, 05/23/2012 - 04:04 | Link to Comment Seer
    Seer's picture

    "the only critical use for oil is in transportation"

    A partial list of products made from Petroleum (144 of 6000 items)

    One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like:

    [refer to link] http://www.ranken-energy.com/Products%20from%20Petroleum.htm

    Wed, 05/23/2012 - 07:55 | Link to Comment francis_sawyer
    francis_sawyer's picture

    Is dildo on that list?

    Tue, 05/22/2012 - 21:35 | Link to Comment THECOMINGDEPRESSION
    THECOMINGDEPRESSION's picture

    The Religi-Turd is in such a mess over someone who put a bathing suit pic that he cancelled the comments on a post.! LOL! The guy has some major mental issues that gets in the way of his RANTING. His site is heading down the drain..

    Tue, 05/22/2012 - 21:40 | Link to Comment balz
    balz's picture

    Shut up loser. Turd's website is the best website around (with ZH) and would be even better without a loser like you trying to get on the nerves of a guy that is doing his best everyday.

    The only thing you do good in a day is shitting on others.

    So shut up.

    Tue, 05/22/2012 - 22:13 | Link to Comment Joe The Plumber
    Joe The Plumber's picture

    Last year the turd promised to shut his blog if his predictions didnt come true. He is still yapping his turd jaws, spewing turds everywhere, all over his turdy blog.

    I cant think of any more turd references. Somebody help me out here

    Wed, 05/23/2012 - 03:32 | Link to Comment Western
    Western's picture

    I noticed you're a nobody. Just sayin.

    Tue, 05/22/2012 - 21:33 | Link to Comment LawsofPhysics
    LawsofPhysics's picture

    Awesome, fucking bring it. My commodities portfolio is well positioned.

    Tue, 05/22/2012 - 21:52 | Link to Comment Caviar Emptor
    Caviar Emptor's picture

    Oil sands: shovel ready 

    Tue, 05/22/2012 - 22:03 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    In 10 years the USA AND China run out of oil. Most people don't realize but the USA singlehandly produces the most oil in the world yet we use it all and then some.  In t10 years the USA and China start to deplete the Middle East of every last drop twice as quick as they are forecasted to last (USA and China have a large holdings in the Middle East not just the Arabs).  If you think battery technology is not the single most important technology that needs to be developed you need a major head examination.  Not commodities (except for those that go into the input of battery technology) might do well. Once this happens plastics will need to also become a thing of the past. Coal can be converted to oil

    Tue, 05/22/2012 - 22:16 | Link to Comment Joe The Plumber
    Joe The Plumber's picture

    Greenland and our atlantic and pacific coasts

    Its whats for breakfast

    Greenlanders will be happy when we make them the 51st state

    Tue, 05/22/2012 - 22:30 | Link to Comment Ident 7777 economy
    Ident 7777 economy's picture

    -1 Don't even come close to agreeing.

    Tue, 05/22/2012 - 23:00 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    Stfu Noob (-10). Retarded Commodities Trader.

    Tue, 05/22/2012 - 22:49 | Link to Comment TradingTroll
    TradingTroll's picture

    "the USA singlehandly produces the most oil in the world"

     

    Uhm, its <9%

    http://en.wikipedia.org/wiki/List_of_countries_by_oil_production

     

    Tue, 05/22/2012 - 22:59 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    You are reading some Wikipeida Post Noobie.  I was not talking about in tota, I was talking about per Country. Your name is correct. Stfu Noob.

     

    Here's the real stats: (USA produces just less than Saudi Arabia per day)

     

    http://www.cnbc.com/id/47173863/The_World_s_Biggest_Oil_Producers?slide=10

    Wed, 05/23/2012 - 06:10 | Link to Comment dolly madison
    dolly madison's picture

    If you do the math on this page, it shows that the US would run out of it's proven reserves in 5 years if it kept pumping at that rate.  The page is 3 years old.

    Wed, 05/23/2012 - 09:48 | Link to Comment Flakmeister
    Flakmeister's picture

    And you don't know the the difference between oil, NGL, Refinery gains and the games that people play...In other words, your ignorance is showing....

    I would venture that you also think that kerogen is oil too..

    Thu, 05/24/2012 - 04:17 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    Funny.  I have worked for all of the largest oil companies in the world.  Please refrain from your tarded comments.

    Thu, 05/24/2012 - 10:05 | Link to Comment Flakmeister
    Flakmeister's picture

    Well you didn't learn much as a janitor I guess....

    PS One tell that you are full of shit is that a real oil person would never quote CNBC for production figures....

    Tue, 05/22/2012 - 22:21 | Link to Comment ITrustMyGut
    ITrustMyGut's picture

    for whatever its worth, Lindsay Williams has said.. that there is more than enough oil... Eagle Island, etc. But Elites withhold.. pump out OPEC.. collapse the faux "flight to saftey" of UST's.. leave the ME holding the bag.. then proceed to sell withheld US Oil to us.. at $150-200... Bretton Woods take down style...

     

    Used to believe in Peak Oil.. read Ruppert, etc. But I tend to believe in abiotic oil today... and that supply is monsterous. If anything, potable drinking water will be significantly more urgent....

    Tue, 05/22/2012 - 22:30 | Link to Comment CrashisOptimistic
    CrashisOptimistic's picture

    Analysis works better without the word believe.  If you have to believe or not believe something, you don't have enough data.

    When you have enough data, you move past believe.

    Tue, 05/22/2012 - 22:57 | Link to Comment MrPoopypants
    MrPoopypants's picture

    What means do you have to verify the data?  Who supplied that data?  Major oil companies, Arab dictatorships, US government agencies?  Are these historically trustworthy sources when it comes to sharing information?

    You can assign varying degrees of confidence, but you can never 'move past believe.'  The world is fundamentally uncertain.

    Wed, 05/23/2012 - 02:01 | Link to Comment CrashisOptimistic
    CrashisOptimistic's picture

    That's a valid point, but I'm not going to immerse in it generally.  Rather, specifically, JODI, EIA, IEA and BP track oil production.

    Their numbers don't agree.  They differ by hundreds of thousands of barrels per day.

    Don't do believe.  Wait for data.  Data on this matter would be all four organizations showing relentless decline.  All four already do show generally flat for almost 10 years.

    Tue, 05/22/2012 - 22:35 | Link to Comment Marginal Call
    Marginal Call's picture

    Y U no drink abiotic water?

     

    Tue, 05/22/2012 - 23:02 | Link to Comment Casey Stengel
    Casey Stengel's picture

    CHK is increasing production by 4000 barrels per week. Currently pumping over 55,000 barrels per day just on the Eagle Ford Shale in south Texas. I see new wells each week. 100,000 barrels per day by Dec.

    Tue, 05/22/2012 - 23:05 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    Water is definitely a bigger problem.  The buy paid 3 bucks for two weeks worth of gas and 3 bucks for a sip of beer. This is not a mistake

    Wed, 05/23/2012 - 04:12 | Link to Comment Seer
    Seer's picture

    Ha ha!

    Your fucking gut runs your life!  And in that gut is a bunch of bacteria, which, without, you would be dead.  Your bacteria are wanting you to "believe" that there's no shortage of oil (seeing as oil is responsible for helping produce roughly 1/3 of the world's protein, which your gut breaks down so you can stay warm and alive).  So, yes, I suppose that you "believe," just as my dog does when I wave a treat in front of it- it'll think nothing but good things would happen to it.

    Tue, 05/22/2012 - 22:25 | Link to Comment max2205
    max2205's picture

    Wtic up 100% over USO in 4 years. Well played sir!

    Tue, 05/22/2012 - 22:36 | Link to Comment Yes_Questions
    Yes_Questions's picture

     

     

    Me and My old F150

    says don't care bout no oil from sowdi

    Riceburner intersections don't scare me

    no' the new ones with Leaf from a tree

     

    Jus wanna get

    to the end of the road

    where the Leaf wrapped rice smolders

    and the truth get told

     

    There's enough gold

    There's enough gold

     

     

    Question the ode

     

    Tue, 05/22/2012 - 22:42 | Link to Comment tmosley
    tmosley's picture

    Of course they can't lower the price, it's rising due to the falling value of the dollar and all other fiat currencies!  It's still right around the 50 year average in terms of gold.

    Tue, 05/22/2012 - 23:12 | Link to Comment deflator
    deflator's picture

    The price of gold is more correlated to oil because oil is more of a master commodity than gold. It takes a great deal of energy to mine and refine gold let alone transport and store it.  While gold is certainly refreshing it's roots as a "money"(by those trying to escape the tyranny of relentless money printing), it is still considered and treated as a commodity by those that are currently in charge of, "money".

    Tue, 05/22/2012 - 23:23 | Link to Comment Haole
    Haole's picture

    Correct me if I'm wrong but the "price" of oil has actually declined markedly in relation to gold.

    Wed, 05/23/2012 - 02:58 | Link to Comment AnAnonymous
    AnAnonymous's picture

    That is hoarding effect.

    As long as gold is not used to buy oil and circulate as a currency, well, all exchanges are made through paper currency.

    Gold bugs are themselves a miracle of paper currency.

    But US citizens are so pampered by their own government state they never admit it.

    Wed, 05/23/2012 - 04:14 | Link to Comment Seer
    Seer's picture

    "Gold bugs are themselves a miracle of paper currency."

    And before there was paper currency there were no "gold bugs?"

    Tue, 05/22/2012 - 22:57 | Link to Comment Dr. Gonzo
    Dr. Gonzo's picture

    Just paid $2.85 to fill up my Honda Elite Scooter. Should last me for 2 weeks or so. Then I ordered a domestic 12 oz beer at a cheap Mexican restaurant on my way home. That cost me $3 plus tip and didn't even last me 10 minutes. 

    Tue, 05/22/2012 - 23:04 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    LOL. I stopped drinking years ago.

    Wed, 05/23/2012 - 00:40 | Link to Comment MayerRothschild
    MayerRothschild's picture

    You make it sound like I'm living large... Honda Fit $35 fill up.  6 pack of mircro-brew $6.99.

    Tue, 05/22/2012 - 23:06 | Link to Comment Tom Green Swedish
    Tom Green Swedish's picture

    Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold Oil Gold

     

    Braindead.

    Tue, 05/22/2012 - 23:37 | Link to Comment forward ho
    forward ho's picture

    Has it occured to any that by useing the oil from all other countrys, we shall, in the end be holding onto the last reserves? For the longest time i could not figure the reason for not using our own. Then it dawned, our current restrictions on exploration only ensures that after we have sucked the world dry, we will be happily floating on a sea of oil. kind of diabolicle, but from a long term stategic standpoint it make perfect sense. First use everyone elses, Then corner the market.

    Wed, 05/23/2012 - 04:34 | Link to Comment Seer
    Seer's picture

    One of the Forbes clan actually said so much back in the 70s.  Funny how one of the world's biggest proponents of capitalism was proposing something which would otherwise be seen as a socialist action: when some "socialist" today, like a Chavez, does this we're pretty quick to denounce.

    As far as this being a "we'll corner the market and get rich" agenda, hardly.  Who you going to sell to when everyone's broke?  2/3 of the world's population lives on $3/day or less and this statistic isn't getting any better.  Yeah, sure, TPTB want to ensure that they have "theirs;" and, I figure, they want this to command work as always, but at some point, when they cannot produce any growth and all the peoples get really uppity, the uprising will be too much and it'll be game over for TPTB.

    Tue, 05/22/2012 - 23:39 | Link to Comment jmac2013
    jmac2013's picture

    Do people in this thread still believe all the oil of the world is from dead dinosaurs, and that most of those dinosaurs happened to die in Saudi Arabia?  Just curious

    Wed, 05/23/2012 - 04:36 | Link to Comment Seer
    Seer's picture

    No, I think that most people here think that those who think we're living on a planet filled with creamy caramel are fucking nuts.

    Tue, 05/22/2012 - 23:43 | Link to Comment worbsid
    worbsid's picture

    I'm sure you all have seen the graph of time from 0 to 4000 years on the x-axis and quality of human life on the y-axis.  There is a tall spike rising from 1900 peaking about now and setting around 2100.  I am happy to be living now. I was born in the last big depression and I'll probably die in the next one.  All up, good timing.    

    Tue, 05/22/2012 - 23:45 | Link to Comment ZenStick
    ZenStick's picture

    Oil is so 1950s. On its way out. New proven tech coming on line. As cheap as 0.1cents per KWh, compared to oil at 10cents per KWh.

    http://www.blacklightpower.com/technology/ciht-cell/

    Wed, 05/23/2012 - 00:03 | Link to Comment worbsid
    worbsid's picture

    Thank you for the link ZenStick.  At rates like that, it may be too cheap to meter. 

    Wed, 05/23/2012 - 09:51 | Link to Comment Flakmeister
    Flakmeister's picture

    Didn't I hear that once about some other energy source?

    Tue, 05/22/2012 - 23:55 | Link to Comment worbsid
    worbsid's picture

    Another graph that you all have probably seen is the rather standard curve of world oil production derived from Hubbert's peak oil studies.  It seems the idea of horizontal drilling (called super straws) is producing oil faster from the same oil field that has been in production for years.  These super straws distort the peak curve to something more like a shark fin.  The up part of the curve is already established.  We are on the flat top part now.  The fall off is very steep. 

    Of course superstraws are not the only factor to the peak out curve distortion but it seems we are on a rather undulating flat top of production since 2005.  How long before the bottom fall out is still quite up for debate.  See "The Oil Drum" for more oil information.   

    Wed, 05/23/2012 - 04:40 | Link to Comment Seer
    Seer's picture

    Efficiency in extraction...  Strength through exhaustion!

    Do NOT follow this link or you will be banned from the site!