Why Natural Gas Vehicles Won't Decrease Oil Dependence, Part I [View article]
Dude,
Reserve estimates are the flimsiest things on the Planet. I just looked as the US Geological Survey's estimate of a half trillion barrels of oil in the tar sands of Venezuela.
The USGS reserve estimates were based on technical feasilibity. There was no calculation of whether the tar sand reserves were sufficiently profitable to be exploited.
How do we know these natural gas reserves are worth pumping?
It was technically feasible to send men to the Moon. It wasn't profitable to send men to the Moon ...
Endless Oil: Peak Production vs. Oil Price [View article]
There are not going to be multiple peaks. Look at oil fields or oil producing countries. Multiple peaks rarely occur even in the case of big discoveries.
US oil production peaked in 1971. Prudhoe Bay went online in the early 80s as the biggest US oil field.
It did not revive US production.
Face the facts, the vast bulk of the world's oil was discovered in the late 40s, and the 50s and 60s.
Most of the proven reserve growth is not due to technology. It is due to underestimating reserves. Proven reserve estimates do not forecast cumulative oil production very well. Probable + proven reserves do.
And the irony of peak oil is that occurs just after rapid increases in oil production. So peak oil occurs when prices are very low such as the first half of this decade (we are in still in the first decade of the new millenium).
Now we have experienced five years of essentially flat oil production and rising prices.
I think we are just about to enter the downward slope.
Endless Oil: Peak Production vs. Oil Price [View article]
The role of technological innovation in squeezing more oil out of the ground is real, but exaggerated in importance.
One reason oil fields end up producing more oil than the proven reserve estimates indicate is because these estimates are very conservative.
Essentially what happens over time is the reserve estimates get revised not due to new technology so much as moving reserves from the probable category to the proven category.
UK is the classic example. The UK government make a great forecast of cumulative oil production back in the 70s using probable + proven reserves.
But the energy analysts used proven reserves and when the oil production exceeded what they expected, they attributed the differential to the 'March of Technology'.
Technology maybe explains 25% of the differential, the rest was using an overly conservative definition of reserves.
Why Natural Gas Vehicles Won't Decrease Oil Dependence, Part I [View article]
Reserve estimates are the flimsiest things on the Planet. I just looked as the US Geological Survey's estimate of a half trillion barrels of oil in the tar sands of Venezuela.
The USGS reserve estimates were based on technical feasilibity. There was no calculation of whether the tar sand reserves were sufficiently profitable to be exploited.
How do we know these natural gas reserves are worth pumping?
It was technically feasible to send men to the Moon. It wasn't profitable to send men to the Moon ...
Why Natural Gas Vehicles Won't Decrease Oil Dependence, Part I [View article]
Such calculations ignore the shape of the natural gas field production curve.
Endless Oil: Peak Production vs. Oil Price [View article]
I took a look at these reserves. No where does this agency says that 500 billion barrels is economically recoverable.
It is 'technically feasible' - big difference.
Endless Oil: Peak Production vs. Oil Price [View article]
The facts are not on your side. Seventy of the world's giant oil fields are decline. According to the IEA, the decline is 6.7% per annum.
Most of the huge oil fields were discovererd in the late 40s, 50s, and 60s. The bulk of world reserves.
Endless Oil: Peak Production vs. Oil Price [View article]
US oil production peaked in 1971. Prudhoe Bay went online in the early 80s as the biggest US oil field.
It did not revive US production.
Face the facts, the vast bulk of the world's oil was discovered in the late 40s, and the 50s and 60s.
Most of the proven reserve growth is not due to technology. It is due to underestimating reserves. Proven reserve estimates do not forecast cumulative oil production very well. Probable + proven reserves do.
And the irony of peak oil is that occurs just after rapid increases in oil production. So peak oil occurs when prices are very low such as the first half of this decade (we are in still in the first decade of the new millenium).
Now we have experienced five years of essentially flat oil production and rising prices.
I think we are just about to enter the downward slope.
Endless Oil: Peak Production vs. Oil Price [View article]
You are not providing hard arguments. It's just fluffy rhetoric.
Many oil companies now agree that peak oil will happen soon.
Total gives the date as 2020.
Petrobras gives the date as 2010.
Seventy percent of the world's giant fields are in decline. According to the ultra-conservative IEA, the decline rate is 6% a year.
There is no way you or anyone in the industry is going to find enough affordable oil given the declines.
Oil discovery peaked in the 1950s and 1960s.
It's too late ....
Endless Oil: Peak Production vs. Oil Price [View article]
Not everyone believes the US Geological Survey does a good job of estimating reserves.
The cost of the unconventional oil wil be very high. That's part of the Peak Oil position.
You may be squeeze oil out of tar sands and shale, but what's the price?
Probably in the $80 to $150 range.
It might make you a rich man, but I am not sure the world can afford.
Endless Oil: Peak Production vs. Oil Price [View article]
One reason oil fields end up producing more oil than the proven reserve estimates indicate is because these estimates are very conservative.
Essentially what happens over time is the reserve estimates get revised not due to new technology so much as moving reserves from the probable category to the proven category.
UK is the classic example. The UK government make a great forecast of cumulative oil production back in the 70s using probable + proven reserves.
But the energy analysts used proven reserves and when the oil production exceeded what they expected, they attributed the differential to the 'March of Technology'.
Technology maybe explains 25% of the differential, the rest was using an overly conservative definition of reserves.
Taleb vs. Treasuries [View article]
There are notable examples of countries taking on massive debt with no rise in yields. Japan is the classic example.
It is very likely given weak economic growth and very low inflation that Treasury yields will remain very low.
One of the easiest ways to make money is to sell puts on long term Treasuries and buy them back at substantially lower prices.
The inflation expectations are being constantly dashed ...
The Necessary Evil of High U.S. Debt [View article]
You Alphaseeking commentators are so unsophisticated that it boogles the imagination.
I still remember what a German tourist said about America, "It looks like Eastern Germany."
Your country (and mine) looks like a dump because you are too selfish to pay the necessary taxes.
The Necessary Evil of High U.S. Debt [View article]
Cost of servicing US government debt is extremely low.
Do you simply look at big numbers and get scared?
That's not how you do financial analysis.
Taleb: Short U.S. Government Bonds [View article]
Endless Oil: Peak Production vs. Oil Price [View article]
A Complete Guide to the Market Wreckage that Occurred While You Were Sleeping [View article]
Trying to time bottoms is a fool's game.
Average down ... average down ...
I think oil is very cheap at these levels. I think VT is getting very interesting.
Crude Oil Price Shocks and Market Fundamentals [View article]
Natural gas is not a golden bullet. It's very unlikely you can ramp up natural gas production quickly enough to make a dent on oil prices.
Even the overoptimistic International Energy Agency has noted that 70% of the world's giant fields are declining at an average rate of 7% a year.
So oil supply could very well shift to the left.