But even an extra 10m bbls/day will hardly cope with expected Asian demand growth, even after the meltdown. Do you see no chance of conflict in the Caspian and Gulf between Asian and western interests, fighting over declining supplies?
On the price of Saudi oil: I didn't see the NYT article. In any case, I meant to say not that Saudi oil will cost $16 bbl (we're talking about future production here) but that it will cost $16,000 per bbl/day of new upstream investment, to bring it to market. That is not cheap historically. It puts the price of new Saudi on a par with some non-conventional sources:
"According to most publications, oil in Middle East is cheap: it was, but is it anymore?
Main indicator is the investment in developing a certain maximum capacity divided by that capacity $/b/d
-Orinoco heavy oil: development & upgrading plant: 1.5 G$ for 100 000b/d light oil:
15 000 $/b/d with a long maximum
-Deep water Gulf of Mexico: Mars field by Shell: O&GJ 1996: 1.2 G$ for 100 000b/d
12 000 $/b/d
-Athabasca tar sands: O&GJ 1996
Amoco Primrose: 0.4G$, 50 000b/d heavy oil: 8 000$/b/d,
Imperial Cold lake phases 9 to 12: 0.4G$ 45 000b/d in situ bitumen
9 000$/b/d
-OPEC -Ismail 1994: investment in the 1990s:
G$ increase capacity Mb/d
OPEC M.E 50 6.5 8 000 $/b/d
OPEC other 58 2.1 28 000 $/b/d
OPEC 108 8.6 13 000 $/b/d
in fact 65 to maintain old fields
-Al-Fathi 1994:
add capacity in 2000 by 10 Mb/d for 160 G$: 16 000 $/b/d "
(Upstream potential of the Middle East in the world context, J.H.Laherrère )
Mark
Dhlazare wrote:
>
> In a message dated 98-05-18 19:48:31 EDT, you write:
>
> <<
>
> Dhlazare wrote:
>
> > Is this serious? Or have you overdosed on "Mad Max" movies?
> >
>
> Hmmmm. Dan, if Mel Gibson hadn't existed he'd have been invented just to
> console
> you and Jordan for losing an argument. But like all global warming denialists
> and
> energy-entropy denialists, you respond to serious arguments with unconsidered
> jibes. Why is that?
>
> Mark
> >>
> Sorry, just an attempt at levity, didn't mean to be rude. But my point still
> stands -- nature is not going to impose a solution on human society by causing
> energy supplies to run out. Only humanity can impose a solution on humanity.
> Your scenarios about auto traffic grinding to a halt are much too apocalyptic.
> Much more likely, from my point of view, is that, due to excess gasoline
> supplies, we'll all wind up immobilized in some mega-traffic jam on some mega-
> LIE (Long Island Expressway to all you non-Americans), the gas fumes rising,
> the outside temperature hovering at 125 degrees F. due to global warming, and
> some Howard Stern-like shock-jock screaming at us over the car radio for not
> fulfilling our daily consumption quota at the local mall. Shelley thought
> hell resembled 19th-Century London. Brecht thought it resembled the L.A. of
> the 1940s. I think it resembles the Nassau County of the 1990s.
>
> By the way, according to today's NY Times, the price of Saudi Light is approx.
> $12.50 / barrel. This is the equivalent of $3.40 in 1973 dollars, which is
> pretty much where things stood on the eve of the first Arab oil embargo. Once
> again, I insist: the long-term trend in energy prices in a period of chronic
> over-production is downward.
>
> Dan Lazare