jjhman

Pay Attention to Oil Decline Rates

Let's add Jeffery Brown's ELM model to the discussion: If exporting countries are depleting AT ALL and are experiencing increased petroleum use, because of increased wealth due to higher prices, their net exports will be dropping much faster than their production decline rate.

Approximately 20% of the world's production comes from only 14 super giant oil fields. Virtually all of those fields are over 25 years old, some over 50 years old. When those super giants are gone, and we are relying on fields like Tupi in 6,000 feet of water, there won't be any cheap oil. And industrial civilization doesn't just depend on oil, it depends on cheap oil.

Net Exports of Major Oil Exporters Likely to Fall

I have trouble with the idea that speculation is an important part of today's high oil prices. Every day someone takes delivery of 86 million barrels of oil. No one is going to pay more for that oil, on that day, than it is worth to them. Long term contracts mean nothing regarding the oil being delivered next week.

One more thing. There is a lot more behind the facts of peak oil than Matt Simmons looking at three years of flat production. The only question about peak oil is when, not if.

What Can Possibly Explain the Price of Oil?

Both Basbak and most of the posters here seem to miss the simple fact that the amount of oil on the planet is finite. I can't imagine where the idiot calling himself "paulk8756" gets his notions about the amount of oil that could be produced from domestic sources. Certainly no one in the oil industry or in the U.S. Department of Energy or the USGS thinks there is enough productive capacity left in the U.S. to meet a fraction of current, or projected, demand.

There is almost certainly some speculative fat in the current price of petroleum. But try to remember that Texas, the North Sea, Indonesia, Prudhoe Bay and Mexico's Cantarell field have are all in decline after having been managed with the most modern technologies and aggressive operational regimes. Oil fields are finite sources of the stuff and virtually all of the big fields have been found and developed.

So perhaps, just perhaps, the recent run up in oil prices is a result of the beginning of awareness of the finite nature and unique characteristics of petroleum.

But it sure ain't the fault of the hapless "Greens" who couldn't manipulate a congressman or presidential candidate if they had him (or her) locked up in the back of a Prius.