THE US, THE UN AND IRAQ, ELEVENTH THREAD

okie wrote:

It will provide an immediate bump in lowering price pressure by the sheer fact that commodities future traders will consider the impact on future oil prices and supply.

Assertion. I think oil and commodities traders are well aware that it will take years, if not a decade, to even get the taps turned on up there, let alone begin pumping. It will provide very little if any short-term relief to gas prices and will add practically nothing to the world demand, which we aren't going to be able to keep up with no matter what.
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Cycloptichorn

Cycloptichorn wrote:

okie wrote:

It will provide an immediate bump in lowering price pressure by the sheer fact that commodities future traders will consider the impact on future oil prices and supply.

Assertion. I think oil and commodities traders are well aware that it will take years, if not a decade, to even get the taps turned on up there, let alone begin pumping. It will provide very little if any short-term relief to gas prices and will add practically nothing to the world demand, which we aren't going to be able to keep up with no matter what.
...
Cycloptichorn

Yes, it will take years to make America no longer dependent on foreign oil. I infer from your reasoning that you think that if our foreign oil independence cannot be achieved immediately or at least within a short term we ought not ever begin the effort to achieve that independence.

That thinking is self evidently stupid if not silly.

The cost of the next barrelAt the same time, oil companies - both state-owned and the multinationals - are forced to develop increasingly more complex and technically challenging projects in the absence of the "low hanging fruit" of easily accessible new conventional oil fields. As they take on such major construction projects, the oil companies are operating in a booming international infrastructure market, where engineering, labour and materials are in short supply and costs are rising dramatically.

As a result, projects that would be adding supply to the market are facing bottlenecks and cost overruns.

The IEA reports that OPEC's effective surplus capacity will hit two million barrels a day later this year, and could drop to as low as one million barrels by 2012. That's a dangerously low margin in an industry that faces frequent disruptions, ranging in the past from hurricanes in the Gulf of Mexico, to pipeline ruptures in Alaska, to strikes in Nigeria. A constant source of concern is the ever-present fear of geopolitical strife in the oil-rich Persian Gulf region.

So far this decade, OPEC's spare capacity has been closer to three million barrels a day, and averaged between 3.5 million and four million in the 1990s.

At the same time, non-OPEC sources of new supply have become increasingly costly to produce. In the Canadian oil sands, and Venezuela's extra-heavy oil belt, the break-even point for new oil supplies is approaching $65 a barrel.

Average finding and development costs for international oil companies have more than tripled since the beginning of the decade - from $6.08 a barrel to $19.09, according to a survey by PFC Energy, a Washington, D.C.-based consultancy.

"Oil companies are paying a lot more for service, across the board," PFC analyst David Kirsch said. "At the same time, you're seeing a tremendous backlog in the service company workloads. So even if you have the money for a new project to come on line, you have to wait."

The rising costs and production challenges are among the factors driving prices, Mr. Kirsch said, as speculators bet that markets will remain tight and that tomorrow's barrel of oil will cost more to produce than yesterday's did.

"It certainly is a significant element of what's driving prices," he said. "It's just much harder to produce this stuff and there is a recognition now that your marginal barrel - which is coming from places like the [Alberta] tar sands - is around $65 a barrel."

While prices have climbed well beyond levels that justify new investment, oil companies have been slow to respond.

In part, that's because OPEC's state-owned oil companies control a growing share of the market and are less interested in making multibillion-dollar investments that will drive down prices. In part, it's because international oil companies endured market crashes in both the 1980s and the 1990s and have been wary about whether the sharp price increases of the past three years will endure.

And in part, it's because the prospects simply are not as attractive as they once were. British-based BP PLC this month agreed to spend $1.2-billion (Canadian) to develop three parcels in the Beaufort Sea, where one well can cost more than $60-million, where ice conditions are hazardous and rapidly changing, and where there are no pipelines to move to market any oil or natural gas that it might find.

"People are looking at the oil companies and they're looking at huge profits and are forgetting the amount of investment the oil companies now need to do if they are going to be able to meet the world's energy demand," said Candida Scott, senior director for cost and technology at Cambridge Energy Research Associates.

ican711nm wrote:

Cycloptichorn wrote:

okie wrote:

It will provide an immediate bump in lowering price pressure by the sheer fact that commodities future traders will consider the impact on future oil prices and supply.

Assertion. I think oil and commodities traders are well aware that it will take years, if not a decade, to even get the taps turned on up there, let alone begin pumping. It will provide very little if any short-term relief to gas prices and will add practically nothing to the world demand, which we aren't going to be able to keep up with no matter what.
...
Cycloptichorn

Yes, it will take years to make America no longer dependent on foreign oil. I infer from your reasoning that you think that if our foreign oil independence cannot be achieved immediately or at least within a short term we ought not ever begin the effort to achieve that independence.

That thinking is self evidently stupid if not silly.

Oh, I think energy independence should be a top priority for America; but not through the pumping or burning of more fossil fuels, which is a stupid way to go in the future. As drilling in ANWR or off-shore will not help our energy independence for a long time to come - and is not a long-term solution at all - it is a short-sighted suggestion at best.

A combination of solar, wind, and nuclear power is much, much better. It not only helps create far more new jobs then oil, it is far less pollutive and problematic from an environmental standpoint.

Cycloptichorn

A combination of solar, wind, and nuclear power is much, much better. It not only helps create far more new jobs then oil, it is far less pollutive and problematic from an environmental standpoint.

Cycloptichorn

the question is still :

how much are we willing to pay for a gallon/liter of gasoline at the pump ?

hbg

Cycloptichorn wrote:

A combination of solar, wind, and nuclear power is much, much better. It not only helps create far more new jobs then oil, it is far less pollutive and problematic from an environmental standpoint.

Cycloptichorn

How many windmills, solar panels, and nuclear plants will it take to run all the trains, planes, ships, trucks, and cars in the U.S., cyclops, and how much will this cost the average consumer if this is all done within the next 25 years?



Cyclops, you truly do live in LaLa land.

I agree we need to develop nuclear, solar, and wind, but the facts show that we cannot get to Point B that you speak of from where we are now anytime soon. I have seen no intelligent expert ever predict it is possible or feasible anytime soon, cyclops.

I prefer to deal with realities of the energy mix, not some pie in the sky desire that you may have in your mind, but is simply a dream.

In recent years, this global shortage of drill-ships has created a critical bottleneck, frustrating energy company executives and constraining their ability to exploit known reserves or find new ones. Slow growth in oil supplies, at a time of soaring demand, has been a major factor in the spike of oil and gasoline prices.

Mr. Bush called on Congress Wednesday to end a longstanding federal ban on offshore drilling and open the Arctic National Wildlife Refuge for oil exploration, arguing that the steps were needed to lower gasoline prices and bolster national security. But even as oil trades at more than $135 a barrel -- up from $68 a year ago -- the world's existing drill-ships are booked solid for the next five years. Some oil companies have been forced to postpone exploration while waiting for a drilling rig, executives and analysts said.

And they are correct; we will need oil or some form of portable hydrocarbons to keep our country going for some time yet.
Cycloptichorn

I would add that, even if we open up 'offshore drilling' on our coasts, we don't have the resources to even tap those wells at this time.

Quote:

In recent years, this global shortage of drill-ships has created a critical bottleneck, frustrating energy company executives and constraining their ability to exploit known reserves or find new ones. Slow growth in oil supplies, at a time of soaring demand, has been a major factor in the spike of oil and gasoline prices.

Mr. Bush called on Congress Wednesday to end a longstanding federal ban on offshore drilling and open the Arctic National Wildlife Refuge for oil exploration, arguing that the steps were needed to lower gasoline prices and bolster national security. But even as oil trades at more than $135 a barrel -- up from $68 a year ago -- the world's existing drill-ships are booked solid for the next five years. Some oil companies have been forced to postpone exploration while waiting for a drilling rig, executives and analysts said.

http://www.nytimes.com/2008/06/19/business/19drillship.html?ref=science

It's little details like this that really eviscerate the position that McCain and Bush are currently taking.

Cycloptichorn

Cycloptichorn wrote:

And they are correct; we will need oil or some form of portable hydrocarbons to keep our country going for some time yet.
Cycloptichorn

Like maybe a hundred years or more.

Earth to Cyclops?

You are going to convert all the vehicles to solar, wind, and nuclear in short order, but we can't build a few more drillships, cyclops?

The no-bid contracts are unusual for the industry

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The concept that there is an easy solution to this problem through drilling more oil is simply false.

Cycloptichorn