retired358's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/172964/comments http://seekingalpha.com/article/156756-does-crude-s-price-reflect-reality?source=feed#comment-634854 634854
If one were to look at OPEC production capacity, one would quickly see that it is: 1) not verified (reporting agencies just accept what OPEC countries report); 2) is suspect (e.g., several years ago, the reported reserves of several OPEC countries suddenly doubled in the same year, and have not changed since, even with continuing production - highly unlikely in reality but probably done to get around self imposed production targets based upon reserves - so how can we believe reported spare capacity); and 3) likely to be much higher than reality (several countries - Nigeria, Venzuela to name but two - still have reported production capacities in excess of prior peak capacities when they are now only able to produce less than half of that peak capacity - so they obviously have no spare capacity).

Spare production capacity is defined as that capacity that can be brought on line within 30 days and sustained for at least 90 days. If one looks more closely at the data, the reported spare production capacity is highly suspect and certainly not something that I would base any conclusions upon. ]]> Tue, 18 Aug 2009 11:58:01 -0400
If one were to look at OPEC production capacity, one would quickly see that it is: 1) not verified (reporting agencies just accept what OPEC countries report); 2) is suspect (e.g., several years ago, the reported reserves of several OPEC countries suddenly doubled in the same year, and have not changed since, even with continuing production - highly unlikely in reality but probably done to get around self imposed production targets based upon reserves - so how can we believe reported spare capacity); and 3) likely to be much higher than reality (several countries - Nigeria, Venzuela to name but two - still have reported production capacities in excess of prior peak capacities when they are now only able to produce less than half of that peak capacity - so they obviously have no spare capacity).

Spare production capacity is defined as that capacity that can be brought on line within 30 days and sustained for at least 90 days. If one looks more closely at the data, the reported spare production capacity is highly suspect and certainly not something that I would base any conclusions upon. ]]> http://seekingalpha.com/article/153231-crude-oil-demand-and-the-quick-recovery-hoax?source=feed#comment-614927 614927
Those renewables (wind and ethanol) being expanded are due to the result of gov. subsidies - and the unintended consequences are often ignored. Ethanol is not very efficient (from corn) and it is socially and morally wrong to starve people elsewhere to make fuel from food. Wind is installed (that is where the subsidy is) but the cost of maintaining is sometimes greater than the elect. value generated (notice how many older fields have many non-working turbines).]]> Tue, 04 Aug 2009 13:04:57 -0400
Those renewables (wind and ethanol) being expanded are due to the result of gov. subsidies - and the unintended consequences are often ignored. Ethanol is not very efficient (from corn) and it is socially and morally wrong to starve people elsewhere to make fuel from food. Wind is installed (that is where the subsidy is) but the cost of maintaining is sometimes greater than the elect. value generated (notice how many older fields have many non-working turbines).]]> http://seekingalpha.com/article/153231-crude-oil-demand-and-the-quick-recovery-hoax?source=feed#comment-613986 613986
I am not sure that the recession/depression, or whatever the world is digging out of, was caused by the 2008 energy spike. The energy spike reduced demand and did not help the situation but the "hole" was caused by the subprime mortgages and "speculation" in the related insurance swaps/derivatives.]]> Mon, 03 Aug 2009 23:18:45 -0400
I am not sure that the recession/depression, or whatever the world is digging out of, was caused by the 2008 energy spike. The energy spike reduced demand and did not help the situation but the "hole" was caused by the subprime mortgages and "speculation" in the related insurance swaps/derivatives.]]> http://seekingalpha.com/article/153231-crude-oil-demand-and-the-quick-recovery-hoax?source=feed#comment-612825 612825
1) You really believe it? You have not convinced me with your "factual support"

2) You are trying to incite others against the industry?

3) You are trying to sell your services?]]> Mon, 03 Aug 2009 11:02:16 -0400
1) You really believe it? You have not convinced me with your "factual support"

2) You are trying to incite others against the industry?

3) You are trying to sell your services?]]> http://seekingalpha.com/article/153231-crude-oil-demand-and-the-quick-recovery-hoax?source=feed#comment-612810 612810
As others have pointed out, just to maintain current production levels requires that the industry find and produce an additional 4-5% of current production each and every year - just to replace natural field declines. If one looks at the data on new finds, one will see that the average size of fields discovered is decreasing and the production cost is increasing (harder to find and necessary to go deeper and/or colder). And, ultimately, the cost of crude oil will be the cost of the most expensive bbl produced to meet demand.

With respect to demand, it is difficult to assume that the people in India and China will not want to increase their standard of living (which requires energy). Even if their energy usage increases to just 1/4 that of Japan or Europe (over time) times the differences in population, demand will increase significantly.

I fully support unconventionals and renewables - they will be needed - but they cannot be developed fast enough or in sufficient quantities over the next decade to meet all of the increased demand. And, to the degree they are developed, their cost is much greater than that of producing crude oil and their price will then set the cost of energy.

So, I am placing my investments in crude oil over the next decade.]]> Mon, 03 Aug 2009 10:55:42 -0400
As others have pointed out, just to maintain current production levels requires that the industry find and produce an additional 4-5% of current production each and every year - just to replace natural field declines. If one looks at the data on new finds, one will see that the average size of fields discovered is decreasing and the production cost is increasing (harder to find and necessary to go deeper and/or colder). And, ultimately, the cost of crude oil will be the cost of the most expensive bbl produced to meet demand.

With respect to demand, it is difficult to assume that the people in India and China will not want to increase their standard of living (which requires energy). Even if their energy usage increases to just 1/4 that of Japan or Europe (over time) times the differences in population, demand will increase significantly.

I fully support unconventionals and renewables - they will be needed - but they cannot be developed fast enough or in sufficient quantities over the next decade to meet all of the increased demand. And, to the degree they are developed, their cost is much greater than that of producing crude oil and their price will then set the cost of energy.

So, I am placing my investments in crude oil over the next decade.]]> http://seekingalpha.com/article/119034-big-oil-dark-skies-ahead?source=feed#comment-378702 378702 Fri, 06 Feb 2009 15:07:09 -0500 http://seekingalpha.com/article/119034-big-oil-dark-skies-ahead?source=feed#comment-378696 378696
Without further info., not sure I can put much into this analysis.]]> Fri, 06 Feb 2009 15:03:26 -0500
Without further info., not sure I can put much into this analysis.]]> http://seekingalpha.com/article/111431-is-cheap-oil-compatible-with-growth?source=feed#comment-333172 333172
One needs to look at the consumption of the developing world (China, India, others are a tiny fraction of OEDC - Industrialized countries consumption). What is really scary about those numbers is that they are so small - and does anyone think they do not want to improve their standard of living?

Having spend years in the industry, I do not see where this supply will come from short term (next 20 years).

Crude prices will go up.

The US needs a comprehensive energy policy and congress is incapable of understanding or doing anything constructive in this area.]]> Thu, 18 Dec 2008 12:11:25 -0500
One needs to look at the consumption of the developing world (China, India, others are a tiny fraction of OEDC - Industrialized countries consumption). What is really scary about those numbers is that they are so small - and does anyone think they do not want to improve their standard of living?

Having spend years in the industry, I do not see where this supply will come from short term (next 20 years).

Crude prices will go up.

The US needs a comprehensive energy policy and congress is incapable of understanding or doing anything constructive in this area.]]> http://seekingalpha.com/article/111405-opec-cuts-oil-falls-something-s-not-sustainable?source=feed#comment-332997 332997
The time to act really is now when we have a chance - but, what is the solution?

Some would say tax petroleum products at a higher rate to force conservation. That is not an intelligent solution as it may help conservation but it will also worsen the financial/economic crisis and will just provide more of our money for the gov. to spend unwisely.

Some would say fund a massive research program - again, a waste of taxpayer money. There is plenty of company/private research and gov. funded research in the past has not been productive. And, there are plenty of potential processes available to commercialize now.

The real issue is the volatility in crude prices - which makes investing in newer processes/technology difficult when investments would be on the order of $20 billion for the equivalent of 300,000 bbls/day of products - the output of a large refinery.

Long term, our energy will need to come from solar or biofuels from algae (the only two sources large enough). Nuclear could work but there is currently no acceptance of that route by the public.

So, how do we bridge the gap (until solar or biofuels are viable)? Congress could easily pass a bill to set a floor price for all renewables, alternatives or unconventionals at say $65-70/bbl equivalent. That would allow companies to invest the large sums necessary and would ensure that the best processes were commercialized (rather than having the gov. mandate - via subsidies - solutions which are morally and socially unacceptable - including food to fuel).

]]> Thu, 18 Dec 2008 10:08:02 -0500
The time to act really is now when we have a chance - but, what is the solution?

Some would say tax petroleum products at a higher rate to force conservation. That is not an intelligent solution as it may help conservation but it will also worsen the financial/economic crisis and will just provide more of our money for the gov. to spend unwisely.

Some would say fund a massive research program - again, a waste of taxpayer money. There is plenty of company/private research and gov. funded research in the past has not been productive. And, there are plenty of potential processes available to commercialize now.

The real issue is the volatility in crude prices - which makes investing in newer processes/technology difficult when investments would be on the order of $20 billion for the equivalent of 300,000 bbls/day of products - the output of a large refinery.

Long term, our energy will need to come from solar or biofuels from algae (the only two sources large enough). Nuclear could work but there is currently no acceptance of that route by the public.

So, how do we bridge the gap (until solar or biofuels are viable)? Congress could easily pass a bill to set a floor price for all renewables, alternatives or unconventionals at say $65-70/bbl equivalent. That would allow companies to invest the large sums necessary and would ensure that the best processes were commercialized (rather than having the gov. mandate - via subsidies - solutions which are morally and socially unacceptable - including food to fuel).

]]> http://seekingalpha.com/article/107468-how-low-can-crude-oil-and-gas-go?source=feed#comment-313603 313603 Mon, 24 Nov 2008 10:18:30 -0500 http://seekingalpha.com/article/71150-an-energy-policy-that-makes-cents-and-sense?source=feed#comment-136525 136525
However, coal can be used and converted to fuel in an environmentally friendly way and the land returned to a better state than it was (reclaimed). We can develop energy in coastal areas without destroying them (it is happening elsewhere in the US).

You point is to limit these potential sources of fuel. So, I assume that you would rather pay $6-10 for a gallon of gasoline in the future and live in a world with a much lower standard of living. You cannot have it both ways.

]]> Fri, 04 Apr 2008 10:55:29 -0400
However, coal can be used and converted to fuel in an environmentally friendly way and the land returned to a better state than it was (reclaimed). We can develop energy in coastal areas without destroying them (it is happening elsewhere in the US).

You point is to limit these potential sources of fuel. So, I assume that you would rather pay $6-10 for a gallon of gasoline in the future and live in a world with a much lower standard of living. You cannot have it both ways.

]]> http://seekingalpha.com/article/71150-an-energy-policy-that-makes-cents-and-sense?source=feed#comment-136523 136523
Some additional thoughts:

We need to tap all available hydrocarbon sources. North America has some of the largest deposits of oil sands, coal and shale oil in the world.

There are processes available to convert these to fuel today at prices well below current crude prices.

The problem is the very large capital expenditures needed and the risk to these investments if crude prices were to fall.

The solution (not that I like gov. intervention but we have that already) is for Congress to pass a price support for all alternatives at say $60-65/B equivalent. This would allow the massive capital expenditures necessary to bring these (and other) alternative sources on-line.

And, it would cost the taxpayers nothing assuming crude prices remained above $65/B. Should crude fall to say $40/B, then, yes, taxpayers would support less than 20% of our energy needs at $65/B but the remaining 80% would be at $40/B for an average of $45/B. Would that not be better than the current price of $100/B?

And, if this policy were announced, crude prices would fall immediately - speculators would flee the futures market and crude producing countries would increase supplies to try to persuade companies not to invest in alternatives. They fear alternatives.

Seems like a win-win. ]]> Fri, 04 Apr 2008 10:49:59 -0400
Some additional thoughts:

We need to tap all available hydrocarbon sources. North America has some of the largest deposits of oil sands, coal and shale oil in the world.

There are processes available to convert these to fuel today at prices well below current crude prices.

The problem is the very large capital expenditures needed and the risk to these investments if crude prices were to fall.

The solution (not that I like gov. intervention but we have that already) is for Congress to pass a price support for all alternatives at say $60-65/B equivalent. This would allow the massive capital expenditures necessary to bring these (and other) alternative sources on-line.

And, it would cost the taxpayers nothing assuming crude prices remained above $65/B. Should crude fall to say $40/B, then, yes, taxpayers would support less than 20% of our energy needs at $65/B but the remaining 80% would be at $40/B for an average of $45/B. Would that not be better than the current price of $100/B?

And, if this policy were announced, crude prices would fall immediately - speculators would flee the futures market and crude producing countries would increase supplies to try to persuade companies not to invest in alternatives. They fear alternatives.

Seems like a win-win. ]]>