Miles:
Hate to be gloomy, but given the geological realities and our insatiable demand for crude, we're fucked.
---- Doug:
Bet that's not true. ===================
This does seem to be what all discussions of oil pricing - whenever it climbs - get around to: either it's an indicator of peak production or we're simply witnessing the playing out of normal and temporary factors - ranging from possible 'gentlemen's agreements' to unwarranted market jitters to short-lived demand spikes.
There are credible, non-hysterical arguments on both sides. I've read essays by oil geologists who seem resigned to the rapid increase of demand and, at first static, then swiftly declining supply and counter-essays by equally well informed and experienced folks who say exactly the opposite (or push the peak date well into the future).
For a layman, it's exhausting.
At this point, I wouldn't be the least bit surprised if the peak theorists turn out to be uncomfortably right and the age of easy oil is done and done, or, alternatively, I live to be 85 and millions of people are still gassing up their vehicles without a care like it's 2005.
.d. ~~~~~
Leigh:
I've seen data saying it's all coming from one big pool of oil in Saudia Arabia and the rest of the known reserves are questionable (Simmons and Simmons), and I've heard reasurring words from others... with no data...
Jude Wanniski is an "offender" in that department.
I questioned him on that a while back in a Fw: from another list... and wasn't comforted:
[repost with permission] ----- Original Message ----- From: Jude Wanniski To: leighcmeyers at yahoo.com Sent: Saturday, February 05, 2005 9:00 AM Subject: Oil in Abundance
I've written about this for decades and have a chapter in my book, "The Way the World Works," that covers most of the ground. You can get it at Amazon. Chapter 13. China, for example, has not yet been explored for liquid petroleum and natural gas. Nor has the rest of Asia or Africa or Latin America. The Middle Eastern oil countries don't drill more than one or two exploratory wells every year, because their reserves are so high. Go to my website and do a site search on "petroleum" and will find lots of stuff to counter conventional wisdom. JW <...>
As Mario Savio enunciated so forcefully: "That's the answer?"
The query:
----- Original Message ----- From: Leigh Meyers To: NEWSROOM-L at LISTS.NETSPACE.ORG Sent: Saturday, February 05, 2005 7:22 AM Subject: [NEWSROOM-L] Wanninski Interview: "Of course there's a conspiracy, and they advertise it!"
<...> I have one major misgiving with the information presented in the interview (PrisonPlanet):
Mr. Wanninski believes that there are vast, untapped, reservoirs of oil yet to be extracted, or found. I hope those reserves aren't as over- rated as the recently downgraded reserve estimates of a few major oil players.
Read the Simmons & Co International document in regard to Saudi Arabian oil deposits http://www.csis.org/energy/040224_transcript.pdf
Or the footnote on page eight of this BP document: http://tinyurl.com/3maa8
<...> The world's oil reserves-to-production ratio was 41 years in 2003, down around 6% from the peak of 43.7 years in 1989. Both proved reserves and production have increased since 1989: by 12.5% and 20% respectively. <...>
The reserves to production ratio is dropping even though the proven reserves and production are up.
I am not an economist... not even close, but that doesn't look good.
How long till demand outstrips supply?
Maybe I'm misinterpreting... Perhaps not.
Many years ago (over ten), Harpers Index proposed if 0.1% of the Chinese population bought and drove cars like Americans do, the world oil supply would last approximately five days.
BBC gave up some numbers a few months ago regarding car ownership and population projections for China which I extrapolated out at 30-60 years to fulfill that Harpers prophesy.
<...> BBC: 03 September 2004 China set for surge in car sales:
The number of cars on China's roads is set to rise sevenfold to 140 million by 2020, the government has forecast. The total number of cars will eventually peak at 250 million, or 150 cars for every 1,000 people, the Communication Ministry said. That compares with about 500 cars per 1,000 people in Western Europe, and close to 900 in the US. <...> http://news.bbc.co.uk/1/hi/business/3623470.stm ~~~
I can't imagine any combination of untapped or unexplored reserves that would add more than... 10 days (Leigh pulls a # out of thin air) to that supply.
How many Jeep Wranglers purchased and driven by the people who manufacture them (the Chinese) will it take to drive us *all* over the edge?
It also gave me pause to wonder whether *all* oil company reserve estimates are equally flawed due to measurement technique limitations, and production/economic reporting demands that are biased towards investment and stockholder interests.
(Would you want to be the CFO that had to explain that the product (oil) that your investors are depending on for profit is running out at a rapid rate?)
It would be ugly... 41 years, give or take. By then oil supplies and pricing would be based completely on the "conflict model"(sic) of economics...
Soldiering in the Middle East and Latin America will be a highly paid and well respected way to earn a living, as well as the bonuses to be made by spying on your neighbor for "electricity waste crimes", an executable offense.
Here's the attitude that will be in demand, assuming that "worst case" scenario: "You know, guys like that ain't got no manhood left anyway. So it's a hell of a lot of fun to shoot them." -- Lt. Gen. James Mattis USMC
L ===
----- Original Message ----- From: Jude Wanniski To: leighcmeyers at yahoo.com Sent: Saturday, February 05, 2005 9:00 AM Subject: Oil in Abundance
I've written about this for decades and have a chapter in my book, "The Way the World Works," that covers most of the ground. You can get it at Amazon. Chapter 13. China, for example, has not yet been explored for liquid petroleum and natural gas. Nor has the rest of Asia or Africa or Latin America. The Middle Eastern oil countries don't drill more than one or two exploratory wells every year, because their reserves are so high. Go to my website and do a site search on "petroleum" and will find lots of stuff to counter conventional wisdom. JW
========
----- Original Message ----- From: Leigh Meyers To: Jude Wanniski Sent: Saturday, February 05, 2005 10:58 AM Subject: Re: Oil in Abundance
Jude,
I will do that. But I must point out that part of my concern is of a
humanitarian, egalitarian, environmental and sociological nature.
It may not be sound economics, but, as Harvey Wheeler alluded to in his conservative treatise, Democracy in a Revolutionary Era...(Center for the Study of Democratic Institutions, Occasional Paper, Vol. III Number 3 (1968?),
...the concept of globalization that requires concentration of an industry in any particular region is destructive of that region, and was never his intent when he developed his globalization theories. He expected *de-centralization* of industry to be the "logical" outcome... not concentration. If we observe the effect of the computer manufacturing industry on Indonesia, the effect is easily visible after only ...20 years? If that long.
I'll look up the relevant citations if you like, but I'm pretty sure my paraphrase gets the "drift" of it.
This is a problem in countries that are involved in the extraction of raw materials for use by the industrialized nations, as well as the nations that manufacture the products consumed mostly by the first world.
I think damage mitigation for the countries on the "receiving end"of the globalized economy is imperative, and a model that would imply unhindered development and export of a nation's natural resources is fraught with untold danger... for the exporting country's economy, as well as socio-culturally.
Nations, and their wealth, are measured in more than money exchange rates and trade deficit balances.
Have you had time to look at what the "true-cost" economists are doing? www.truecosteconomics.org (Adbusters magazine)
There is an underlying, egalitarian philosophy to it that I find quite attractive, but as I stated in my posting... I am not an economist, and therefore, must leave the judgments regarding practicality and veracity to others.
Leigh
P.S. may I repost this conversation to the group? ===
----- Original Message ----- From: Jude Wanniski To: Leigh Meyers Sent: Saturday, February 05, 2005 12:15 PM Subject: Re: Oil in Abundance
Go ahead and post away.... I find much in your commentary that I can relate to. JW
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